Reference no: EM13780685

Question 1. Hans, who was seventeen years old, purchased a used car at Geneva Hughs' Auto Lot for $2600. Hughs made out the title and sales receipt in Hans' name. Hans drove the car to school several times during the following week and discovered that the main bearing was burned out. He took the car back to the auto lot and was told by Hughs that it would cost between $1400 and $1500 to repair the car. Hans refused to pay for any repairs, left the car parked on the lot, and a week later requested the return of his $2600. Hughs alleged that because Hans' uncle had given $1200 towards the purchase price of the car, Hans could not disaffirm the contract. Hughs claimed that even if Hans could disaffirm the contract, Hughs did not owe him $2600, since the car suffered $750 in damages when a driver backed into Hans' car the evening after he left it at Hughs' lot. Decide, discussing fully the arguments of both parties.

Question 2: The Safe Stop Co. was a brake manufacturing company. It experienced great financial difficulties in the fall of 2007. It had a chance to obtain the patent rights to a new brake which would last four times longer than other brakes on the market. Manufacturing this brake might put Safe Stop back on its feet. Unfortunately, Safe Stop had a large debt outstanding - it owed Fast Financing Co. $2,600,000 for an overdue loan. Safe Stop could not purchase the patent rights until it removed the debt owed to Fast from its books.
Fast's loan officer met with the officers of Safe Stop. Safe Stop's officers explained the whole situation, its desire to be able to purchase the patent rights and the fact that to obligate itself to buy the patent rights, which were very expensive, it would have to wipe clean the loan from Fast. After some negotiation, the Fast Financing Co. and Safe Stop entered into a written agreement as follows: Safe Stop promised to pay $1,400,000 to Fast Financing, and in return, Fast promised to accept that amount as full and complete satisfaction for the loan to Safe Stop and thus to cancel the balance due of $1,200,000. Safe Stop paid the $1,400,000.

Pursuant to this agreement, Safe Stop purchased the patent rights at great cost. Four months later Fast Financing sued Safe Stop to recover the balance of the loan - $1,200,000. Safe Stop contended that Fast Financing has no right to the additional money. Who will win? DISCUSS the arguments of BOTH parties.

Question 3: Baker and Zale each contracted with Computer Information Services, Inc. to purchase shares of its stock. Both believed the corporation had assets worth $11 million. Zale later refused to go through with the purchase of the CIS stock on the grounds that the company did not have assets of $11 million as Zale had believed but instead had assets of only $4.5 million. Zale refused to pay the corporation for the shares he had agreed to purchase from it. As a result, the corporation sued Zale for breach of contract. Can the corporation enforce the contract and recover the purchase price? Why or why not? What defense(s) can Zale raise? EXPLAIN FULLY.