Cabal v. Donnelly

This case presents the question whether an action by the purchasers of a new home (plaintiffs) against their builder-vendor (defendant) 1 under the implied warranty that the home was fit for habitation is an action on a contract — thereby entitling the prevailing party to attorney fees under their earnest money agreement — or an action in tort — with no attorney fees awarded. The trial court ruled the case was one “sounding” in tort. The Court of Appeals reversed. Cabal v. Donnelly, 78 Or App 56, 714 P2d 1071 (1986). We affirm the Court of Appeals.

Prior to the sale, the parties entered into…