Consider the following scenario:
Bob paid $800 for the right to buy a specific 10 Acres of land, within five years, from Margaret. The price was set at $50,000. The option was in writing, was legal and valid, and Bob has now legally exercised the option by tendering the price, as required by the option. Margaret refuses to sign and deliver the deed, so is in breach.
The original purpose of the purchase, as stated in the option, was to use it for a mini storage facility. Bob did not promise to use it only for that purpose. Bob insists on getting specific performance, not money damages.
The property is now likely much more valuable, worth over $200,000, due to interest from commercial developers for a store. Margaret claims that Bob had some advance knowledge that this project was possible, and did not disclose this to her when he negotiated the price.
Margaret is willing to pay Bob $35,800 in damages rather than grant him specific performance. In the alternative, she is willing to substitute a different 10 Acre parcel of land. It is suitable for a mini storage facility and is worth about $85,000.
The parties agreed to a mediation process, involving meeting with a neutral person who assists them in negotiating. Explain Bob’s position to Margaret and the mediator and argue for it. Then, explain Margaret’s position and argue for it.
Here are some questions to help you.
-Remember that both parities are in mediation. They are allowed to negotiate remedies that are more creative than those a judge would be able to impose.
-Is there unfairness in the contract that might allow the contract to be thrown out or modified? Is the contract unconscionable? If Bob’s failure to notify Margaret about the possible increase in value any excuse for her to fail to perform?
-What forms of discharge might be applicable, such as novation, accord and satisfaction, or simply fulfilling the contract by performance.
-What legal and equitable remedies are available and could be applied other than specific performance, such as compensatory, damages, or rescission? What is the “benefit of the bargain” for Bob? If the contract is completed and he is able to actually sell the premises for current value, what he net?
This is just a discussion post so it doesn’t have to be that long.