
    Argued and submitted September 14, 1983,
    affirmed in part; reversed in part; and remanded January 11, 1984
    MASON et ux, Respondents, v. WEGSCHEIDER et ux, Appellants.
    
    (130,180; CA A26906)
    674 P2d 84
    James J. Susee, Salem, argued the cause and filed the brief for appellants.
    Andrew P. Ositis, Salem, argued the cause and filed the brief for respondents.
    Before Gillette, Presiding Judge, and Warden and Young, Judges.
    
      PER CURIAM
   PER CURIAM

This is an action for specific performance of a land sale contract. Defendants counterclaimed for a declaration that the contract was null and void by reason of plaintiffs’ failure to perform certain duties under the contract. The trial court, after hearing all of the evidence, dismissed plaintiffs’ action without prejudice on the ground that they had failed to prove that they had reimbursed the defendants for certain costs. The counterclaim was dismissed with prejudice because of defendants’ failure to notify plaintiffs of their intention to declare a forfeiture of the contract. Defendants argue two assignments of error: (1) that their counterclaim should not have been dismissed, because there was a valid forfeiture and termination of the contract; and (2) the dismissal, pursuant to ORCP 54B(2), of plaintiffs’ action for specific performance should have been with prejudice.

We affirm the dismissal of defendants’ counterclaim. The record shows that the contract’s requirements for the assumption of the existing mortgage, as well as the 1975 balloon payment, were waived by defendants. Concerning plaintiffs’ action for specific performance, however, ORCP 54B(2) does not permit a trial court sua sponte to dismiss an action without prejudice, after both sides have presented their case. The action for specific performance should be dismissed with prejudice.

Affirm dismissal of counterclaim; reverse and remand to dismiss action for specific performance with prejudice.  