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Business Law

The Winklers were interested in purchasing a home in the Valleyview Farms housing development.  They contracted the developer, Galehouse, and selected a lot that cost $57,000.  They asked the developer to show them plans for houses for which the construction costs would range from $1800,000 to 190,000, indicating that this was the price they would be willing to spend on construction only and wasn’t to include the lot price.  The developer gave them several books and plans to look at.

After the Winklers had several conversations with Galehouse, he drafted plans for a house and gave the Winklers a quote of $198,000 for the construction costs.  The lot price was not included.  After several weeks of negotiations, the parties agreed on a price of $291,000 for both the construction costs and the lot.

Galehouse prepared a written contract to reflect the agreement of the parties, but he forgot to include the lot price. The final contract read “price for $198,000.” The Winklers paid Galehouse $57,000, the lot price, as a down payment.  When the construction was completed, and the Winklers were finalizing their loan from the bank, the parties discovered the error in the contract.  The Winkler’s argued that the written contract indicated total costs of $198,000, and that is the total amount they should pay.  Galehouse sued to have the contract reformed to reflect the full agreed upon price of $291,000.  Should the contract be reformed?  Why or why not?  Fully explain your answer.

 

The Laths were the owners of a farm that they wished to sell.  Mitchell considered purchasing the land but found that a barn located across the road was objectionable.  Mitchell argued that the Laths orally agreed to remove the barn in consideration of her promise to purchase the property, which she agreed to do for $8,400 in a written contract.  The contract made no mention of the removal of the barn.  After Mitchell moved into her new home and made several improvements to the land, the Laths never removed the barn and expressly communicated that they had no intentions of removing the barn.  Mitchell sued the Laths for breach of contract.  In whose favor do you think the court ruled? What effect does the parol evidence rule have on admissibility of oral agreements regarding the promise to remove the barn? Fully explain your answer.

Shirley and Vince Ladner leased 10 acres of their land to J.D.  Pigg, who used the land for his cattle farm.  The Landers and Pigg created a 10-year contract, providing that rent be paid annually on August 1. Pigg excuted the lease with his first payment of cash in August 2000.  On August 1, 2001, Mrs. Pigg attempted to mail the check for the second rent payment but placed the wrong mailing address on the envelope.  Consequently, the check was returned to her residence.  Pigg then properly forwarded the check to the Ladners.  However, the Ladners did not receive the check until August 8, 2001, at which time they refused to accept the payment and returned the check to Pigg.  The Ladners claimed that the lease had been terminated by Pigg’s failure to submit payment in a timely manner, and this failure constituted a material breach of contract.  Is Pigg’s failure to tender payment on August 1 a material breach of the lease?  Why or why not.  Fully explain your answer.

 

 

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Question 2

Both the Winklers and Galehouse came to a mutual agreement that the total cost, involving the construction and the lot would amount to $291,000. Since both parties had agreed on this amount, then it ethically correct that the contract should be reformed. However, the challenge here is the fact there was no written document to show that both cases had……………..

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