Reference no: EM133180497

1. Constructive Eviction and the Implied Warranty of Habitability

Steve is renting a property from Billy. One evening Steve tripped and fell down the stairs. The issue is that one of the stairs in the common area was faulty. Billy knew about the stair, but he had never got around to fixing it.

Steve injured his leg, so he decided to return to his room. The heater was not working (and it was in the middle of winter). Steve had told Billy about the faulty heater for months, but Billy never got around to fixing it. There is a local ordinance that requires landlords to repair heaters. Additionally, assume that this jurisdiction includes the implied warranty of habitability. The jurisdiction recognizes constructive eviction, and it follows the majority rule of when landlords are liable for injuries.

• What causes of action does Steve have?

• What remedies does he have for the faulty heater?

2. Entity Formation

Carla plans to open Carla's Pets Store, a pet sales and pet supplies outlet, and to hire Quimby and Ruth. Carla will invest only her own money. She does not expect to make any profit for at least two years and to make almost no profit for the first three years, but she hopes to expand eventually.

• Which form of business organization would be most appropriate?

• What are the main characteristics, advantages, and disadvantages of this form of business organization?

• If Carla wants to obtain additional capital to expand the business, but does not want to lose control of the company, what is her best option?

3. Breach of Contract

Johnny, a neighbor who is not a merchant under the Uniform Commercial Code, offers to buy a car from Mark for $30,000. Mark asks Johnny for some time to think about it. Johnny says sure. He writes on a piece of paper that he will keep the offer open for two weeks.

Johnny sees another car he would rather buy. He purchases that, and then he tells Mark that he is revoking his offer.

Two days after that Mark said: "I'm sorry Johnny you made an offer in writing to buy my car. I'm going to hold you to that."

Johnny replied: "Sorry I cannot do that. But I will promise to pay you $10,000 for the help you gave me last year around the house." Somewhat mollified Mark accepts.

Johnny decided to renege on that promise as well.

Fed up, Mark sued Johnny for breach of contract on both the promise to buy the car and the promise for the $10,000.

Discuss whether the elements of a contract are satisfied here.