Business Law Questionnaire

question1:

Siegfried wants to buy a house for him and his family. He contacts Roy, who has advertised a house in the local newspaper with the following words: “Family house for sale. Basis for an offer: USD 500.000. Inspection possible anytime upon prior notification. Perfect condition. Contact :

Subsequently, Roy and Siegfried meet at the house and Roy leads Siegfried around. During the inspection, Roy notes a rather big green stain on one of the walls. Before Siegfried gets aware of it (he is in the other room, looking thoroughly at the ceiling), he covers the stain by moving a large armchair in front of it. Siegfried does not notice the stain. Siegfried, however, seems to be content with the house’s condition and accepts the offer for the stated price by writing, on a napkin: “I accept to buy the house in [address] as inspected for US 500.000”. [Note: he writes the actual address of the house in question, but this is not of relevance here]

Subsequently, Roy sees to the documents needed for the transfer of title of the real estate, including a written purchase contract with his signature on it, and submits them to Siegfried for filing. Siegfried files them without sending back the contract to Roy and gets title to the house, but he does not pay the purchase price, since he has now discovered the stain and says that he was tricked by Roy.

Question 1.1:

Was a contract on the sale of the house formed? If so, how and when? (Note: If you are not regarding the Statute of Frauds here, there won’t be any substraction of points).

Question 1.2:

Is Siegfried right to hold back the money because of the stain? Explain.

Question 1.3:

If Siegfried would have to pay the purchase price in the end, what could he claim nevertheless from Roy?

question2:

Laura is seventeen and rather wealthy. She needs a brain surgery because she is usually talking more rubbish than good, due a diagnosed neural defect in her frontal lobe. She signs a contract with a doctor for surgery, who knows of her condition. To make sure that the contract would be valid, they let her uncle sign the contract as witness, in order to assess that Laura was clear in the mind when she signed the contract. The contract provides for USD 1.000 per hour surgery, which is an adequate price for such a complicated treatment. The surgery is successful and after several weeks of recovery, Laura is able to think and speak normally. However, she is celebrating her 18th birthday in hospital.

Several weeks after her release from the clinic, she gets an invoice for USD 9.000. Laura is outraged and phones the clinic to check the duration of the surgery. The clinic tells her that the surgery took only seven hours. Laura now sends a check to the doctor on USD 7.000 and writes on it “Payment in full for the brain surgery if accepted”. The doctor is too busy to notice and deposits the check in his house bank.

Several months afterwards, when preparing his tax declaration, he comes across the bank account showing the sum paid with the check. He immediately phones Laura to claim the outstanding USD 2.000. Laura refuses to pay, since she already paid in full and because she had been a minor anyway as she had signed the contract, so the doctor should be lucky to get anything. If he would claim more money, she would claim back her money in return.

Also, she says, she has gained information, from a nurse friend working at the same hospital, that the doctor was overdue with the extension of his medical license. This is correct, however, at the time of the surgery, the medical license had been in full force, it expanded shortly afterwards. The doctor answers that this does not pose any problems and that since, in the meanwhile, he has already filed for extension with the competent doctors’ representative body, this was a mere formality.

Question 2.1:

Was there a valid contract formed? Explain.

Question 2.2:

By paying with the check as described, has Laura been discharged of her obligations? In other words, is the doctor right in claiming USD 2.000 more?

Question 2.3:

Is it a good defense which Laura puts up, when claiming that she had been a minor when the contract was signed? Why not?

Question 2.4:

Which defense of Laura would be good in any case?

Question 2.5:

Does the fact that her uncle signed the initial contract as a witness change anything?

question 3:

Barnie stays in his favourite bar for a bit too long. He had five beers and two shots of whiskey when he exits the bar at 2 pm. Alfred the barkeeper, although aware of his condition, does not try to stop him. However, Alfred assumes that Barnie has come by foot, since Barnie only lives five blocks away.

Prior to Barnie’s visit in the bar, Sybill has sold Barnie a black Ford Fiesta for a decent price. Barnie, however, has not yet had the time to come by at Sybill’s to collect the car, as agreed. Barnie is astonished to find that car in front of the bar, where Charlie accidentally has parked it. Sybill owed Charlie a lot of money, and Charlie seized the car in the morning as substitution for the money, to which Sybill did not object (she even handed him over the keys), and then drove to the same bar.

Since Barnie does not have the keys for the car, he takes a nearby stone, breaks the window and opens the car. He then short-circuits the car and drives away. At the next crossroad, he is hit hard by the car of Dumbledore’s, who did not see the Ford Fiesta coming because of him phoning with his girlfriend at the same time. Barnie, on his side, drove over a red light at that moment, without being aware of it, since his condition dazzled his senses. Nobody is injured, but both cars are badly damaged.

Question 3.1: Who is liable for the damage of Dumbledore’s car? Why?

Question 3.2: Who is liable for the damage of the Ford Fiesta? Why?

Question 3.3: To whom must the damages concerning the Ford Fiesta be paid? Why?