1. A contract to buy a used truck for $30,000 provided for a down payment of $6000 and the buyer agreed
to pay the balance of $24,000 over 5 years with interest at 5%. After 6 months, the truck began to require major repairs and the buyer refused to pay any more money.
a. What remedy does the seller have?
b. What defences might the buyer raise?
c. What is a court liable to decide?
2. An agreement to sell land for $75,000 provided for a deposit of $5,000, subject to forfeiture if the buyer defaults in completing the purchase.
a. If the buyer changes his mind, can he get his deposit back? Discuss.
b. If the deposit was $70,000, would your answer be different. Why?
3. An elderly, illiterate widow, Evelyn Machnick, wished to sell her farm. She put an advertisement in the local paper. The ad was silent on price as she had no idea what the land was worth. Several real estate agents came to see her to suggest the farm value was around $125,000. She then went to see the only lawyer in town, (who incidentally also acted for town council and the real estate agents), to discuss her intended wish to sell. The lawyer was aware the town planned to expand its boundaries, which would greatly increase the value of the farm. The lawyer verbally offered to buy the farm for $125,000, which Mrs. Machnick verbally agreed to. The lawyer drew up the paperwork and had her sign, signifying her agreement. The Transfer was registered and the monies paid. When Mrs. Machnick called her nephew, a real estate lawyer in a nearby city, to seek advice on how to invest the money, he immediately saw the implications and sought to set the sale aside.
a. Discuss the issues liable to be raised by both parties.
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