Question: In a telephone conversation with a sales representative of a linen company, the manager of a hotel ordered $1,000 worth of sheets.

In a telephone conversation with a sales representative of a linen company, the manager of a hotel ordered $1,000 worth of sheets. Following the conversation, the manager wrote a memo to the file documenting the agreement, initialed it, and sent a copy to the sales representative.

One of the linen company’s competitors learned of this contract and contacted the hotel to tell them that the sheets were poorly manufactured and that they should stop buying from the linen company and buy everything from the competitor. The hotel then cancels the contract and starts buying from the competitor. The linen company’s sheets are not poorly manufactured.

The linen company can sue both the competitor and the hotel for losses suffered, one for a tort and one for breach of contract, but the linen company is not allowed to recover twice for the same harm.

1. What is the tort that the linen company can sue for and who is the defendant?
2. Who should they sue for the breach of contract claim?
3. What damages would be recoverable from each defendant so that it would not be recovering the same damages twice?
4. Does the Statute of Frauds create a defense to the lawsuit against the hotel? Why or why not?

Week 5 Reading & Resources

Textbook Readings:

• Government Regulation and the Legal Environment of Business: Chapter 8, Contracts
  Chapter 8 introduces students to basic contract law—that is, contract formation, impediments to formation, and defenses to enforcement.
• Business Law and the Legal Environment:

• • Chapter 10, Real Assent
    Chapter 10 of this text provides an overview of the concept of “assent” and the circumstances under which assent may be compromised, thus calling into question the validity of the contract.
  • Chapter 15, Discharge of Obligations
    Chapter 15 of this text discusses the various scenarios wherein a party's obligations under a contract are discharged.
  • Chapter 16, Remedies
    Chapter 16 of this text discusses more fully the remedies available to the parties in the event of a breach of contract.

Articles:

• Cornell Law School: Contract
  Review the definition and overview of contracts

On the way home from major dental surgery, Robert Nee stopped by his local car dealership. Because of the surgery, he was still groggy from the anesthesia. Mr. Nee's dentist had also given him some powerful pain medication to minimize the pain in the mouth and jaw for the twenty-four-hour period following the procedure.

While at the dealership, Mr. Nee negotiates with a salesperson for the purchase and sale of a well-equipped Jaguar. Mr. Nee mentions the surgery to the salesperson, but the salesperson does not notice anything out of the ordinary about this customer. The Jaguar Mr. Nee ultimately decided upon is a top-of-the-line vehicle and the cost is $97,000.00. Mr. Nee puts a $30,000.00 down payment on the car by personal check and finances the rest. The transaction is reflected in appropriate contract documents and invoices and complies with all federal, state, and local regulations regarding the sale of a vehicle. All documentation is signed by both parties. The next day, Mr. Nee receives a phone call from the dealership stating his new car is ready for pick up. Mr. Nee does not really remember purchasing the car, although he has always wanted a Jaguar and dreamed about buying one the night before.

• Is this contract valid, enforceable, void or voidable? Fully explain your answer, defining all legal terms referenced in the prompt.

Instructions:

Give a full answer. Consider the facts, including what is given and what can be presumed from the facts. Then apply the rules to the facts. Submit your answer as an attached file. Please review the Assignment Rubric before completing any assignment. Remember to include in-text citations and a reference page.

Facts

You and your family must relocate from California to Boston for employment reasons.  You scour the local suburbs for a home suitable to your needs and find the “perfect” home in a quaint town south of Boston.  You make an offer to purchase the property and before signing the purchase and sale agreement, you dutifully engage the services of a home inspector who inspects the home, during daylight hours, from stem to stern and pronounces it in near perfect condition.

Elated, you sign a purchase and sale agreement for the $550,000.00 home, and put down $55,000.00 as a deposit to bind the agreement. In the agreement, the seller graciously allows you access to property to take measurements for the purposes of your move.

Two weeks before you are to close on the property, you make arrangements to get into the home to take room measurements, window measurements, and the like. You arrive at the home when the current owners are away for the weekend. It is dark—around 9:30 p.m. on a Friday evening.  As you move from room to room, you get this eerie feeling that someone is watching you; but, every time you turn around, there is nothing there. Convinced you are just spooking yourself, you go down to the finished basement to measure the width of the door frames.  To your horror, sitting suspended in midair above a couch in front of the television, is the apparition of an elderly gentleman.  He looks down at you calmly and smiles. You shriek and bolt up the stairs two at a time, only to see an elegant looking woman dressed all in red coming down the stairs toward you.  You open your mouth to speak to her, but are stunned into silence as she literally passes right through you on the stairs!!!

It’s time to leave—and quickly. Running as fast as your legs will carry you, you make your way to the front entrance. As you leave, you take note of a third and final apparition—a sailor in a white powdered wig—who salutes you as you exit the home.

Frightened, frantic, and panicked, you immediately call the owner of the property and demand to be let out of the purchase and sale agreement with a full refund. When the owner asks why, you respond that the house is haunted and that fact should have been disclosed during the negotiations. The owner laughs and states, “Everyone in town knows the house is haunted.” He refuses to let you out of the deal.

You take the owner to court!! On what legal grounds might you argue you are entitled to rescind this contract, and will you be successful in your attempt? Would the situation be different if you did not discover the supernatural activity until after you moved in?