Chapter 4 - Constitutional Authority to Regulate Business by fEuwqv

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									LET-6e Case Problem with Sample Answer
Chapter 10: Contract Performance, Breach, and
Remedies

10.6 Case Problem with Sample Answer

On July 7, 2000, Frances Morelli agreed to sell to Judith Bucklin a house at 126
Lakedell Drive in Warwick, Rhode Island, for $77,000. Bucklin made a deposit on
the house. The closing at which the parties would exchange the deed for the
price was scheduled for September 1. The agreement did not state that “time is
of the essence,” but it did provide, in “Paragraph 10,” that “[i]f Seller is unable to
[convey good, clear, insurable, and marketable title], Buyer shall have the option
to: (a) accept such title as Seller is able to convey without abatement or reduction
of the Purchase Price, or (b) cancel this Agreement and receive a return of all
Deposits.” An examination of the public records revealed that the house did not
have marketable title. Wishing to be flexible, Bucklin offered Morelli time to
resolve the problem, and the closing did not occur as scheduled. Morelli decided
“the deal is over” and offered to return the deposit. Bucklin refused and, in mid-
October, decided to exercise her option under Paragraph 10(a). She notified
Morelli, who did not respond. Bucklin filed a suit in a Rhode Island state court
against Morelli. In whose favor should the court rule? Should damages be
awarded? If not, what is the appropriate remedy? Why? [Bucklin v. Morelli, 912
A.2d 931 (R.I. 2007)]

Sample Answer:

The court ruled in Bucklin’s favor and ordered the remedy of specific
performance: Morelli was to convey the house with whatever title she had. Morelli
appealed to the Rhode Island Supreme Court, which affirmed the lower court’s
ruling. The state supreme court explained that “specific performance is an
available remedy when a purchaser of real estate under a written contract
demonstrates that he or she was at all times ready and willing to perform the
contract” or “when a party unjustifiably refuses or fails to perform under the
agreement.” In this case, a valid agreement existed and Bucklin was “ready,
willing, and able to pay the agreed-upon consideration and accept the
encumbered title to the property.” The parties never expressly agreed to extend
the closing date, but the “existence of such an extension could be inferred from
the conduct of the parties.” The court rejected Morelli’s contention that the deal
should be canceled because she made an effort to return Bucklin’s deposit.

								
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