The first 4 questions are based on the following scenario:
Ninety-year-old Elvie lives alone on the
physical limitations and difficulty communicating. Elvie’s next door neighbor, Martha, is a retired nurse
and also lives alone. Elvie’s children hire Martha as Elvie’s caretaker and ask her to move into Elvie’s
house to give her the 24-hour-a-day care she needs. Martha sells her home and moves in with Elvie. Over
the next year, Elvie’s health deteriorates. Just before Elvie dies, Martha talks her into selling her house
to Martha for much less than its apparent market value. Elvie signs the papers and passes away a few
days later. Anticipating that Elvie’s children will be upset about the sale of the house, Martha offers to
sell it to her friend Norma at a great price (and a big profit for Martha) if Norma will forego a home
inspection and close the deal quickly. When Norma hesitates, Martha tells her, “Hey, I have lived in the
house for a year and never noticed any problems.” Norma buys the house without having it inspected
first. Four months later, the basement starts to leak and Norma hires a contractor to look into the problem.
The contractor discovers numerous cracks in the walls and floor of the basement that had been repaired
and then covered with wood paneling and flooring. The contractor tells Norma that the house is
structurally unsound and not safe to live in.
1. How might Elvie’s children challenge Martha’s ownership of the house (can they challenge
the validity of the K or do they have a defense to the K’s enforceability)? Name two ways.
2. Suppose Elvie does not sell the house to Martha, but gives it to her in appreciation for the
year of constant care and companionship. Under these circumstances, what additional
argument(s) would Elvie’s children have to challenge Martha’s ownership of the house?
3. Can Norma sue Martha for fraudulent misrepresentation? Why or why not?
4. Assuming there is no fraud, can Norma get out of the sales contract with Martha based on
mistake as to the condition of the house? Why or why not? What is the remedy for a
5. Name two types of damages in contract cases and give an example of when each is a proper
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