Geralyn Mobley offers her house in Winthrop Harbor, Illinois, for sale at a price of $480,000. She retains Oscar Bestoffer, a licensed real estate broker as an exclusive agent for a period of 90 days. Andrew Murphy has been house shopping and hears about Bestoffer from a friend. He tells Bestoffer that he wants something in the Winthrop Harbor area because he is intrigued by its proximity to a nature preserve and a decomissioned nuclear power plant. He also tells Bestoffer that he is in a position to pay "about $500,000, but nothing more than $525,000." Bestoffer shows him Mobley's property, telling Mobley that he thinks the buyer will pay the $480,000 asking price. He loves the house, which overlooks the containment vessel of the nuclear plan, and, without much negotiation, they sign a standard-form residential real estate sales agreement.
1. After they close on the deal, and Murphy moves in, he and Mobley have a cup of coffee and he tells her"I'm surprised you did not negotiate harder. You could have gotten me up to $525,000." What legal theories and remedies might be available to Mobley to get some more money? From whom?
2. Closing has not occurred yet. When Murphy does his final walk through on the day of closing, he discovers that the house has no furnace or other heating system. What can he do?
3. When he does his final walk through, he discovers that the only heating system in the house is a 100-year old coal furnace firing a steam boiler. The furnace requires that the resident shovel coal into it twice a day to keep the house heated.
4. Murphy needs a mortgage of $425,000 to go through with the sale. When he gets his mortgage commitment, it is conditional on his selling his existing condominium in the Florsheim Building for at least $250,000. He is unable to sell it for more than $100,000. Can he get out of the Winthrop Harbor deal or must he go through with it.?
5. Murphy applies for a mortgage of $425,000 but before the commitment is issued, a friend of his tells him that he is crazy to buy a house next to a nuclear power plant, inactive or not. He calls up the mortgage lender and says, "I've changed my mind. I don't want a mortgage." Is he off the hook?
6. He gets an unconditional mortgage commitment. When the professional inspector he retained goes through the property, he tells him that there is evidence that the basement regularly floods to a depth of four feet, and that the flood waters may be contaminated with asbestos fibres and radiation from the nuclear waste stored at the power plant site. Can he get out of the deal?
7. After he signs the agreement, his lawyer and Mobley's negotiate over the details. They reach impasse over his lawyer's insistence that a provision be added to the contract specifying a radiation check, with a threshold level of radiation above which the deal is null and void, at his option. Must he go forward with the deal without the provision?
8. Discouraged by the Winthrop Harbor experience, he extracts himself from that deal and shops for new construction in the Zion area.. He signs a contract to buy a house in Clean Energy Acres for $500,000, after he is impressed with the model--a brick-faced frame construction. The contract includes terms identical to those set forth at 462 n.2 of the casebook.
(a) when he goes to inspect his house after construction is nearly completed, he discovers that his "house" is a large mobile home, albeit one with the same square footage of the model. Can the developer force him to go through with the deal?
(b) the developer calls him six months after the signs the contract and tells him that the price has gone up to $600,000 because his prices of material and labor have increased. Can the developer force him to go through with the deal?
(c) the developer calls him six months after he signs the contract and tells him that completion has been delayed for 18 months because the developer invested his working capital with Madoff and Stanford, and a lien has been placed on all the developer's property. Can the developer force him to go through with the deal?
9. He extracts himself from the Zion deal and shops for condos in the West Loop. He signs a contract to buy a condo unit. When he gets the condo declaration, he discovers that it prohibits:
(a) any live performance of music of any kind in any unit
(b) any live performance of Azberzhani folk music in any unit
(c) any live performance in any unit making use of a jack hammer, however modified, for percussion.
Must he go through with the deal?