The vendor sought an order requiring the purchaser to replace a $64,000 letter of credit used as a security deposit under an Agreement of Purchase and Sale after the vendor had drawn down the existing letter of credit.
The purchaser argued that the obligation to maintain the security deposit ended once the contractual conditions for its return were satisfied, namely the issuance of final grading certificates and completion of the top coat of asphalt on the subdivision roads.
Interpreting the agreement as a whole, the court held that the obligation to issue or maintain letters of credit was not independent of the obligation to maintain the security deposit itself.
Once the security deposit obligation expired under the amended return provisions, there was no contractual basis to compel the purchaser to issue a new letter of credit.
The application was dismissed and costs were awarded to the purchaser.