Scenario

On April 1, Mr. Guiseppi called Ms. Jafari, the president of Precious, offering to sell Lots 27 and 28 for $5.5 million. On April 2, Ms. Jafari called Mr. Guiseppi to accept the offer, and later that day, the parties entered into a written contract. The completion date for the transaction (i.e., the day when Precious would pay for the properties and Guiseppi would transfer the legal title to the properties) was May 15.

Question

The signed contract contained a clause stating the following: This contract is subject to Precious obtaining satisfactory mortgage financing, on or before April 12, for an amount of at least $4.0 million at an interest rate not to exceed 3.0% per annum. On April 6, Ms. Jafari heard a rumour (from a credible source) that the Hillwood city council was seriously considering building a new subway system in South Hillwood. Therefore, real estate development would be much more profitable in South Hillwood, as opposed to North Hillwood. As a result, Precious abandoned any effort to find mortgage financing for Lots 27 and 28, and on April 12, Ms. Jafari called Mr. Guiseppi to tell him that Precious had not obtained mortgage financing for Lots 27 and 28, and therefore, the contract was terminated. Has Precious acted within the law in discharging this contract?