Question

CONTEMPORARY CANADIAN BUSINESS LAW: Chapter 14, Page 259, Case 2

Mrs. Field listed her home for sale with a local realestate agent. The agent introduced Mr. Smith to Mrs. Field as a prospective purchaser. After Mr. Smith had inspected the house, the agent obtained a written offer to purchase from him. The offer provided that he would purchase the house for $260,000 if Mrs. Field could give him vacant possession of the premises on September 1st, some three weeks hence. The offer was accompanied by a deposit in the amount of $1,000. Mrs. Field accepted the offer in writing, then proceeded to lease an apartment under a two-year lease. She moved her furniture to the new premises immediately and vacated her home in preparation for closing. A few days before the date fixed for delivery of the deed, Mrs. Field was informed by one of her new neighbours (who was a friend of Mr. Smith) that Mr. Smith’s employer intended to transfer him to a new position in another city some distance away. Discuss the rights and obligations (if any) of the parties in this case. Suggest a course of action that Mrs. Field might follow.

Answer 1

Discuss the rights and obligations (if any) of the parties in this case. Suggest a course of action that Mrs. Field might follow.

In this case the challenge posed by Mrs. Field is related to the confusion associated with the contractor executing the contract. She was told after she moved out of her house and rented an apartment, that the buyer could not continue with the transaction. For this end, should she accept a third party's word? Possibly not, because there is nothing to indicate that he could not continue with the purchase. The question of the amount the buyer pays is linked to the issue of potential repudiation. Does it mean a deposit? - Or is it part house payment? If the buyer repudiate, does Mrs. Field have the right to retain the $1,000 paid? Just when it represented an honest measure of her loss. Another remedy available could be stated performance, as the contract requires the selling of land, but in order to obtain this remedy, Mrs. Field must demonstrate that she was ready, willing and able to fulfill her part of the contract on the date set for closing.