Career and Contracts Defenses

Business Law Contracts, Defenses, Breach, And Remedies

The Dream House:

-Was your contract with Bobby a unilateral or bilateral contract; if unilateral, at what time did Bobby substantially undertake performance?

The prerequisites for a bilateral contract are that an offer must be made, that offer must be accepted, and consideration must be tendered. In the Dream House scenario, I offered Bobby an opportunity to build my house in exchange for $500,000, and Bobby accepted my offer. Bargaining the performance of construction work in exchange for a predetermined payment amount represents consideration, completing the third and final requirement and making this agreement a bilateral contract.

-What remedies and/or damages are available to you and to Bobby?

I would be able to sue Bobby for damages while seeking the amount needed to compensate Sheila to complete the unfinished job, which amounts to a sum of $350,000. Conversely, Bobby could defend himself by claiming that he must be discharged from the contract on grounds that substantial performance has been achieved. However, this defense strategy is only applicable in situations whereby the party in performance of labor or services does not materially breach said contract, according to the precedent established by the case of National Constructors v. Ellenberg, 681 So.2d 791 (3rd. Dist. FL 10/2/1996). Considering the fact that Bobby voluntarily walked off of the job, he has placed himself in material breach of the bilateral contract, and therefore his defense on the grounds of substantial performance will fail.

-Since Sheila's cost to complete the house is more than half the cost, who sees a loss from the hurricane?

If one assumes that satisfaction of a judgment for $350,000 can be obtained against Bobby, then Bobby is the only party in the Dream House scenario who stands to incur a financial loss from the damage caused by the hurricane. Fortunately, I would absorb no losses, as I would likely recover all losses associated with the construction setback, and in addition to my out-of-pocket costs the expected judgment would result in me being awarded $450,000, a sum equal to the $350,000 paid to Sheila plus the $100,000 progress payment paid to Bobby.

Q3.The Nightmare House:

-Do you have a good basis for rescinding the sale?

In the Nightmare House scenario, I would surprisingly have a valid basis to seek that the sale be rescinded. According to the precedent established by the case of Stambovsky v. Ackley, 169 A.D.2d 254, 572 N.Y.S.2d 672 (07/18/91), the NY Supreme Court Appellate Division found that a purchaser of real estate, who is not duly notified regarding the property's reputation as being haunted, has a valid cause of action to seek rescission, because at the very least, the purchaser is entitled to all knowledge of material issues that may potentially affect the property's eventual value. Considering that a house's reputation among members of the local community is directly relevant to an assessment of property value, its status as being "haunted" is enough to warrant the rescission of the sale.

-What duties will you claim were owed to you by the seller?

Anybody selling property has a legal duty to fully disclose any and all known material defects which may potentially affect the property's value.

-What responsibilities did you have as a buyer that may affect your ability to recover?