Reference no: EM132305025

The first 4 questions are based on the following scenario:

Ninety-year-old Elvie lives alone on the south side of Boston in a home built in 1925. Elvie suffers a stroke that leaves her with significant  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. Explain.

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 mistake?

5. Name two types of damages in contract cases and give an example of when each is a proper contract remedy?