weeks 7 & 8 - Monday Oct. 4th 10th I. Contract Law...

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Monday Oct. 4 th – 10 th I. Contract Law a. Elements of a Valid Contract i. Must have agreement between parties ii. It must have been reached with geuine, mutual assent iii. Must be supported by consideration iv. By parties with capacity to contract v. For a legal purpose vi. In the required form (if any) b. defective assent i. concealement or nondisclosure 1. when could you be held liable a. something has been omitted, the entire truth has not been told i. half truth issue b. positive action take to conceal truth (including non-verbal action) i. this is closest to fraud from all the factors listed ii. example: you have water spots in the basement. To make sure that the buyer does not see them, you conceal them by either paitning over or by puttig stuff over it to cover it. This is positive action to conceal. c. condition created by seller and hard to discover by prudent buyer i. the buyer should be asking certain things before entering into a contract. The seller does not have to reveal everything, the buyer should ask some things. But then, does the buyer know what to ask? 1. In some cases YES: buyer brings an expert to insepct a house before buying it. 2. But, ins ome acses, UNCLEAR Reed v. KING a. FACTS: buyer buys a house and subsequently finds out form the neighbors that a family of four was murdered
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there. Buyer says if she had known that someone has been murdered she would have never purchased it. But she doesn’t want to rescind the contract, she just wants to pay a lower price for the house b. California law: fiduciary relationship between this is something that buyer couldn’t have discovered through an inspection. The seller has a duty to reveal. 3. Stambovsky v. Ackley: seller seeing to avoid contract or get price adjustment because the hours they painted is haunted. It has poltergeists. a. The issue is whether or not you can avoid the contract b. Court rules that contract here is voided c. Are ghosts “factual info?” i. Court rules this is not a fact per se, but stil ifns for buyer. That is because the seller had previously traded on the reputation that his house had ben haunted ii. It is the sellers behavior that creates the fact here. You cannot profit from a fact and then deny it is true (which is what the seller tried to do) 4. NY has amended its property law to deal with this sort of circumstances. The new law states that a certain number of facts are material and certain facts are immaterial. Among the immaterial facts listed ehre are: (1) someone died, (2) someone with AIDS lived in house, etc. a. Does it mean that the immaterial facts aren’t important? DO you have to live with them? Not necessarily. IF thesematter to you, it is purchasers duty to ask for them in writing. 5.
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This note was uploaded on 12/05/2010 for the course AEM 3200 taught by Professor Grossman,d. during the Fall '07 term at Cornell University (Engineering School).

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weeks 7 & 8 - Monday Oct. 4th 10th I. Contract Law...

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