Pat was very frustrated because she wanted to purchase a home but lacked the funds or credit to do so even though Pat was expecting shortly to receive a one-half million dollar final installment payment for some land she sold several years earlier. Dan knew that Pat was very interested in purchasing a home and approached Pat with a proposal to assist Pat in buying a home. Dan told Pat that he would help Pat with the financing. After finding the home she wanted to buy for $250,000, Dan and Pat orally agreed that Dan would purchase the home and “when you come up with the money, I (Dan) will sell it to you (Pat) for $250,000 plus a fair commission to be determined.”
Dan purchased the home identified by Pat and the following week Pat moved in and began living in the house. During the first six months after moving in, Pat installed new carpeting, window coverings and a patio cover at a cost of $8,000. Pat also mailed to Dan a check for $1,000 each month, with a note enclosed with each payment. In each note, Pat asked Dan, “tell me what a fair commission is .I want to finalize our deal.” Dan cashed the checks each month, but failed to respond to Pat’s notes.
Eleven months after moving into the home, Pat received the half-million dollar installment check. Pat immediately went to Dan with a check for $275,000 and asked Dan to convey the property to her according to their agreement. Dan refused to accept the check and ordered Pat to move out.
If Pat brings an action against Dan, what are the legal issues involved in this action and how should each be resolved? Discuss.
Able operated a 10 acre parcel of land. Able grew soybeans on 5 acres of the parcel and the remaining 5 acres were vacant. Able decided to plant soybeans on the vacant 5 acres, but he realized he would need an additional water source for the new crop. He entered into a contract with Baker whereby Baker was to dig a well on Able’s property. The written agreement stipulated that Able would pay Baker $3,000 upon completion of the well.
After digging for several days, Baker struck solid rock and was unable to dig any deeper with his present equipment. Baker had been digging wells in the area for over 10 years and had never experienced or heard of striking solid rock before reaching an adequate source of water. Baker telephoned Able and told him that in order to continue digging the well he would have to rent additional and more powerful equipment that would cost $1,000 and asked Able to pay that amount. Able told Baker that he needed the well completed and reluctantly agreed to pay the additional $1,000. Baker rented the additional equipment and finished the well two days later.
One week after the well was completed Able noticed a strong odor emanating from the well. Able called Baker to complain about the odor, but Baker had no explanation as to why there was an odor. After checking with some neighboring property owners, Able discovered that the odor was common in the area and not the result of anything Baker had done improperly when digging the well. Because he was upset by the foul odor, Able sent Baker a check for $2,500 marked “payment in full” on the front. Baker crossed out the “payment in full” inscription and cashed the check.
1. Did Able and Baker validly modify their contract when Able agreed to pay the additional $1,000? Discuss.
2. Can Baker recover any additional money from Able? Discuss.
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