Contract Paper Scenario

Write a paper of no more than 1,400 words in which you answer the following questions:

• Identify the elements necessary to form the contract in the scenario. Was a valid contract formed? Explain your answer.
• Will Paul and Priscilla be able to prove all elements of their breach of contract claim? Explain your answer.
• What defenses does Danny have?
• What remedies do Paul and Priscilla have?
• Does the contract violate the statute of frauds? Explain your answer.
• Should the breaching party consider creating a new contract, and if so, what should be included in the new contract?
• Determine whether ADR is appropriate in this situation or whether the case should go to trial. Defend your response.
• How were the principles of contract administration applied in the scenario? What aspects of the contract administration could have been handled more effectively?
• Using contract administration principles, what are your recommendations to parties entering into contracts for the purchase of real estate?

Contract Paper Scenario

Paul and Priscilla Petersen purchased a single-family home from Danny Davidson. Paul and Danny were fraternity brothers and long-term friends, so they decided to enter into this contract without a written agreement.

The oral agreement provided that Paul and Priscilla will purchase the home for $250,000. As there was nothing in writing, Danny did not disclose that he had had a dispute with his neighbor, Ned, about a boundary for the south end of his property. Danny also failed to disclose some soil subsidence in the front yard, although he claims he did not know about the soil problem.

Paul and Priscilla were excited about their new home. They upgraded the bathroom by adding a tub and new Italian tile, which cost $50,000. Paul and Priscilla also installed $15,000 of new landscaping, which is when they learned about the soil problem. As a result of the soil problem, their new bathroom developed cracks and began to sink. Priscilla convinced Paul that they should sue Danny for breach of contract, even though they were friends. Accordingly, Paul and Priscilla sued Danny for breach of contract.