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Contracts

Exam 16
30 minutes

Fact Pattern

For 20 years, Homeowner lived in a large six-bedroom house, where he raised his children. All these children grew up and moved out, so Homeowner started looking for a smaller residence. To that end, Homeowner visited an open house held at a cozy two-bedroom condominium unit, owned by Condo Owner.

The two began chatting as Condo Owner showed Homeowner the unit. Just as Homeowner was looking to downsize, Condo Owner was hoping to sell his condominium unit and purchase a larger home, where he could raise a family. Seeing an opportunity for a swap, Homeowner invited Condo Owner to view the six-bedroom house the following weekend.

Condo Owner had several engagements during the day of the visit, so he arrived after dark. Homeowner escorted Condo Owner throughout the home’s interior, and then briefly showed him the front and back yards, with the front and back porch lights on.

After some negotiations, both signed a written contract specifying that Homeowner would sell Condo Owner his house, in exchange for the deed to Condo Owner’s unit plus $150,000. After that, both exchanged keys and moved into their new residences. Condo Owner left a $150,000 personal check for Homeowner on the counter in the condominium unit’s kitchen.

The next day, however, Condo Owner called Homeowner to ask why Homeowner never revealed that poison ivy was growing throughout the backyard. Homeowner, surprised, said that he never knew of any poison ivy on the property. Homeowner also mentioned that he rarely spent much time in the backyard, so he was not familiar with the plants growing there. Condo Owner responded that, according to a professional gardener, the infestation was so severe that it would likely take at least three years to get rid of all the poison ivy.

Condo Owner was livid, saying that he wanted the house to raise a family and play outside with his children. For that reason, he never would have agreed to purchase a house with no usable backyard. Condo Owner told Homeowner that the deal was off, refused to finish the paperwork transferring the condominium unit to Homeowner, and called his bank to cancel the check. He then demanded that the parties revert to their original residences. Homeowner refused, and instead sued Condo Owner for breach of contract.


Questions

  1. How will Condo Owner argue that the contract with Homeowner is unenforceable, and is the contract enforceable? Explain.
  2. What remedy will Homeowner likely request, and is he likely to receive it, assuming Condo Owner breached the contract? Explain.

Question 1

How will Condo Owner argue that the contract with Homeowner is unenforceable, and is the contract enforceable? Explain.

Question 2

What remedy will Homeowner likely request, and is he likely to receive it, assuming Condo Owner breached the contract? Explain.

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