Reference no: EM13889911

Consider the following scenario:

On July 15th, Mr. Jones talks to the president of ABC Corp about the possibility of selling a property owned by ABC. Mr. Jones tells ABC that he is an experienced realtor and will be able to sell the property within a short period of time. The president of ABC states: "That sounds good. Let's meet next week and iron out the details."

On July 22nd, Mr. Jones approaches the president of ABC with an offer from XYZ Corp to purchase the property for $450,000. Unbeknownst to the president of ABC, the offer also includes a provision indicating that, if the property contains asbestos, the offer will be reduced by $50,000. The president of ABC tells Mr. Jones to sign the contract and sell the property to XYZ. Mr. Jones signs the contract and gives a copy to ABC. The contract contains the provision regarding a price reduction if asbestos is found on the property.

During inspection, asbestos is found on the property. The inspection report notes the presence of asbestos on the property. A copy of this report is sent to ABC corp. In the interim, XYZ hires an asbestos removal company to evaluate the cost of removing the asbestos. This evaluation cost XYZ $17,000.

On August 22nd, the presidents of ABC and XYZ attend the closing on the property. As he is about to sign the closing documents, the president of ABC notices the asbestos provision and refuses to sell the property.

XYZ sues ABC in district court for breach of contract. XYZ is seeking specific enforcement of the agreement and costs. XYZ claims that ABC is bound by the actions of its agent, Mr. Jones. ABC contends that Mr. Jones was not an agent of ABC. ABC states that it never ratified the actions of Mr. Jones, because it was not aware of all material facts.

In full details, please describe the facts, issues, decision, and reason for this case.

Give an example (precedent) of a similar case and the reference page