Attorney Nicholas Kepple, the president of M&K Realty, drew up a contract for the sale of a parcel of land (Lot 5) from Howard Engelsen to M&K. To establish a purchase price for the sale, Engelsen had Lot 5 appraised. The appraisers based their appraisal of Lot 5 on several facts that Kepple and Engelsen learned were incorrect after they signed the contract. These facts included the total acreage of Lot 5 and whether Lot 5 could be divided into two separate lots without the need for a subdivision approval from the planning and zoning commissioner. After learning that these facts were in error, Kepple saw that the original purchase price was well below the market price for Lot 5, and he attempted to complete the sale for the original purchase price. Engelsen informed Kepple that he would not complete the sale of Lot 5 because M&K had never legally formed as a corporation under the state incorporation statutes and thus lacked the capacity to enter the contract in the first place. Do you think the court agreed with Engelsen's argument? Why or why not?

  • CreatedOctober 21, 2015
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