Business Law

LEGL 3000 – Business LawWoodbury School of Business
Utah Valley University
CASE STUDY PROJECT
Instructions:
The attached packet includes a contract fact scenario, and you have been provided a separate file
with a copy of a written contract and addenda related to the fact pattern.
Using the case study description and materials (REPC, etc.) provided, provide detailed responses to
the questions below.
You can work in groups on this project. Please only have ONE member of the group submit the
project on Canvas – make sure ALL group member names are listed on the assignment.
Please direct any questions to your professor.
Lest you think that this case study and its materials are so absurdly fictitious that there is no way that
this could happen in “real life,” this Case Study is based upon a case that went to all the way to the
Utah Supreme Court, with some fictitious elements added to test your knowledge and understanding
of additional concepts than were at issue in the original case. This kind of thing can and does happen.
Please note that there are discrepancies, inconsistencies and other problems in the case description
and other materials. This is intentional. Nearly all real cases have internal inconsistencies and other
factual problems. Your job is to decide whether those problems are material to the legal questions
raised and, if so, how they impact your decision-making. You may decide that if the facts are
resolved one way over another, then the legal conclusions may be different. In your answers, you
will want to explore and detail out these alternative possibilities.
In presenting your answers, you should be as thorough and detailed as possible, “showing your
work,” as it were, in how you arrived at your conclusions. Typically, the better answers from
students are at least two pages, typed, double-spaced per question.
It is highly recommended that you take a good draft of your submission for this project to the
Writing Lab for review and assistance well in advance of the due date. Students who do this
generally score much higher on their submitted project.
Case Study Questions:
1. Is there a contract between any of the parties? If there is a contract(s), describe and detail
how you arrived at that conclusion, and identify the parties to that contract and the
contract’s terms.
2. There were several purportedly contractual negotiations or transitions in the case
description. If you decided that some of those transactions do not qualify as a contract,
detail and describe why.
3. Identify any defenses to enforcement that any of the parties may have and against whom
they would be asserted, and whether those defenses would be successful and why.
4. Identify the available remedies that any party could request of a court, and whether a court is
able or likely to provide that remedy and why.
5. Describe how the concept of agency effected the parties’ legal positions in the case study.
Did the agents help or harm their clients? Why?
6. If you were the judge on this case and all the parties named in the case description were
party to the lawsuit, how would you resolve the case and why? Who would end up with the
property and on what terms? Who would get nothing and why?
Case Study Scenario:
Jon D’Man grew up in a small town in eastern Oregon. Jon played sports and was good enough
to earn a scholarship in baseball to his favorite university in Utah. Marsha Mello grew up in New York
City, as a Manhattenite. Although growing up in New York had its advantages, she longed to see the
wide open spaces of the western United States, and she applied to the same university in Utah that
Jon was attending. Marsha was a big fan of baseball and loved attending games to support her school.
She fell in love with the star player, Jon.
One fateful game Jon was sliding into third and caught a spike and tore the ligaments in his
knee and ankle. This accident ended his professional dreams at the young age of 17. Jon and Marsha
decided they would get married in four (4) years when they graduated. Jon had a settlement from his
injury and a good-paying, part-time job. Marsha had a large inheritance from her grandmother, to be
used only for educational related expenses. They decided to buy a home together even though Jon
was only 17 and Marsha was 21. But they wondered what they needed to do to buy a home.
Jon and Marsha were both accounting students and were taking a wonderful Business Law
class together from a wonderful professor-the same one you now have. They had a limited knowledge
of contracts, but they knew they should employ a Real Estate Agent to facilitate their purchase. They
called a local hot-shot realtor to help them find the perfect property to start their life together. After
much searching, they found a 3 bedroom 2 bath home on a nice cul-de-s8c in a quiet, newer
neighborhood on the outskirts of town.
They sat down with their Agent to fill out their offer to purchase on a Utah Real Estate
Purchase Contract (REPC). They discussed the home and its amenities. They loved the fact that the
home had an outdoor, portable hot tub under the stars. It could be easily moved under cover into the
carport in bad weather. They also loved the appliances that were in the kitchen. They particularly
loved the 6-burner, Maytag gas range. They decided to ask for them to be included in the purchase
price. The home was listed on the Multiple Listing Service (MLS) for which seemed to be a little high
for the neighborhood. Jon and Marsha decided to offer $207,000 with the seller paying 3% towards
closing costs and for title insurance and for property taxes and for needed repairs.
Jon signed the REPC on the line for the Buyer (see Page. 6). In paragraph 25 of the REPC,
Jon put the time for acceptance as 12 PM, 25 February 2011.
The REPC said on P.l that the BUYER had included a post-dated check for $5,000. The broker
marked the box “delivered” even though Marsha did not have her check book with her. She promised
the agent that she would bring it to him ASAP.
Buyer’s Broker delivered the REPC to Seller’s Broker, through a sales agent on the day after
the REPC was completed by Jon and Marsha.
Jon and Marsha had specifically marked the applicable boxes on page #1, Paragraph 1.2 for
the washer; the dryer; the frig; the water softener; and the security system. They also marked the
required boxes throughout the REPC.
NOTE #1 TO STUDENTS
You will want to read the REPC and the two addenda and ask questions as the different
sections of the REPC are covered in the related chapters of the text book.
Seller received the offer on the 21 February 2011.
Seller marked, I accept with the following conditions. Buyers’ will have one (2) day to accept
terms contained in Addendum #1.
See ADDENDUM #1:
Seller returned REPC with Addendum #1 to Buyer’s Broker.
Jon marked, I accept on Addendum #1 with the following conditions.
See ADDENDUM #2
Jon had his acceptance notarized the next day and gave it to his Broker, who gave it to the
Seller’s Broker. Seller’s Broker got busy and distracted, and he forgot to give it to the Seller until 10
AM. Broker reminded Seller that she only had until 12 AM to respond. Seller said that
was ok, because she would put it in the mail by 11 PM, and that would be the time of acceptance.
(She knew the mailbox rule) She mailed the acceptance at 10:15 PM. She immediately had seller’s
remorse and changed her mind. She called the Buyer at 12:30 AM and said on her answering machine,
“I reject your offer. The deal is off. I will not sell my home at any price.” The BUYERS had not yet
received SELLER’S acceptance.
Right after Buyers had mailed their last offer to Seller, but before seller had mailed an
acceptance (see addendum #2), UB Flash announced it was building just down the road from Seller’s
house. Because of this announcement, the value of the Seller’s house jumped $100 K. Marsha heard
about UB Flash’s plans and quickly called Seiler’s Broker on the phone and told him that she would
like to accepted seller’s offer on seller’s terms (see Addendum #1). She told Seller’s Broker she could
close by 15 April 2011. Seller’s Broker was way excited to make a sale. And without contacting seller,
Seller’s Broker told Buyer, “I accept your offer. You have just bought yourselves a house.” Marsha
said, “Fantastic. I’ve got all the money for the house in a trust.”
That same day, Buyer #2 who is an undisclosed agent for UB Flash, offers the Seiler over the
phone $300K cash with no conditions, as is, close in 10 days. Buyer #2 promises a $20,000 nonrefundable earnest money with the oral offer. Seller does not know of her Agents actions with Marsha;
therefore, she, the Seller, promises to sign the REPC as soon as buyer #2 mails it to her. She tells
buyer #2, “I accept with no reservations or conditions.”
Jon learns of seller’s intent to sell to Buyer #2 and sues to enforce his rights under his REPC.
REAL ESTATE PURCHASE CONTRACT
This is a legally binding Real Estate Purchase Contract (“REPC”). Utah law requires real estate licensees to use this form. Buyer and Seller,
however, may agree to alter or delete its provisions or to use a different form. If you desire legal or tax advice, consult your attorney or tax
advisor.
OFFER TO PURCHASE AND EARNEST MONEY DEPOSIT
On this ^O day of rtfP^
20 \l (“Offer Reference Date”) JOO £ M A^-^-HA
offers to purchase from ^^teJEKJ T* ~^>E¥XL—
(“Buyer”)
(“Seller”) the Property described below and
[ ] delivers to the Buyer’s Brokerage with this offer, or [ ] agrees to deliver no later than four (4) calendar days
after Acceptance (as defined in Section 23), Earnest Money in the amount of S’SQQO””
of PgR 3i£> \ f
(Date)
(Signature
ature above acknowledges receipt
receipt of Earnest Money)
1. PROPERTY:
i^ ^
a
^
OTHER PROVISIONS
IZ3A COL^E^AC LAkfe
also described as:
City of
(CJ^£V\
,County of UT
,State of Utah, Zipffifrft?*?
(the “Property”).
Any reference below to the term “Property” shall include the Property describedabove, togetherwith the Included Itemsand
water rights/water shares, if any, referenced in Sections 1.1,1.2 and 1.4.
1.1 Included Items. Unless excluded herein, this sale includes the following items if presently owned and in place
on the Property: plumbing, heating, air conditioning fixtures and equipment; ovens, ranges and hoods; cook tops;
dishwashers; ceiling fans; water heaters; light fixtures and bulbs; bathroom fixtures and bathroom mirrors; curtains,
draperies, rods, window blinds and shutters; window and door screens; storm doors and windows; awnings; satellite dishes;
affixed carpets; automatic garage door openers and accompanying transmitters; security system; fencing and any
landscaping.
1.2 Other Included Items. The following items that are presently owned and in place on the Property have been left
for the convenience ofthe parties and are also included in this sale (check applicable box): DO washers DC] dryers
M refrigerators Nq water softeners [\}inicrowave ovens [pother (specify) ^/^CU^IT/