Week 4 discussion
DQ1 Dream House
In a contract dated June 15, 2006, Bobby agrees to build
your dream house on a lot you own near Naples, Florida. The contract price is
$500,000. The house is to be completed and ready for occupancy by March 1,
2007. Bobby is paid a progress payment of $100,000, for labor and materials, in
October, 2006. In November, 2006, a hurricane strikes the Naples area and
floods the work site. Bobby claims he had completed 50% of the job before the
hurricane struck. Thereafter, Bobby performs no further work and walks off the
job.
On January 1, 2007, you declare Bobby to be in breach of
contract and sign a contract with Sheila to complete the job for $350,000.
Was your contract with Bobby a unilateral or bilateral
contract; if unilateral, at what time did Bobby substantially undertake
performance?
What remedies and/or damages are available to you and to
Bobby?
Since Sheila’s cost to complete the house is more than half
the cost, who sees a loss from the hurricane?
DQ2 Nightmare House
After months of combing the real estate ads for a vacation
property, you find an ad for a lovely Victorian cottage in a scenic small town
about three hours away. After viewing the house, you decide it is the perfect
weekend place; and amazingly, the price is in your budget. In fact, you’re
amazed that the house is so affordable and has been on the market for a while.
You sign a real estate purchase contract to buy the house from the current
owners, who have lived there for over 20 years. You make the sale contingent
upon an inspection of the property by a licensed construction engineer. The
engineer inspects the house over the course of two days and gives the house a
clean bill of health. You proceed to closing, and buy the house.
After moving in, you learn for the first time from the
neighbors that many actively claim this house is possessed by poltergeists,
which the prior residents of the house had reportedly seen. In fact, the house
is listed in a national guide to haunted houses, and had previously been
included in a walking tour of the town as the haunted house. A newspaper
article once described it as a charming Victorian (with ghost). You now jump at
every creak and noise the house makes. You want the seller of the house to take
it back for failing to inform you that the house is haunted.
Do you have a good basis for rescinding the sale?
What duties will you claim were owed to you by the seller?
What responsibilities did you have as a buyer that may
affect your ability to recover?
What damages can you claim stem from the alleged failure to
disclose by the seller?
