Johnson wants to sell his farm to Davis. Johnson tells Davis that he paid $150,000 for his
Question:
Johnson wants to sell his farm to Davis. Johnson tells Davis that he paid $150,000 for his farm in 2004, and that he believes it is worth twice that at the present time. Relying upon these statements, Davis buys the farm from Johnson for $225,000. However, Johnson actually paid only $80,000 for the farm in 2004 and its value has increased only slightly. (it is presently not worth $300,000) On discovering this, Davis offers to reconvey the farm to Johnson and sues for the return of his $225,000.
A) Based on these facts, who wins and why? Please discuss all relevant issues and please be specific.
B) Assume that Davis won the lawsuit. After losing in court, Johnson ran out of money and, consequently, became very depressed. Subsequently, Johnson decided to become a cyclist in hope that cycling could help him turn his life around. Fairly recently, Johnson participated in a bicycle race conducted by the US Cycling Federation. Unfortunately, a car hit Johnson during the race. He claims that employees of the Federation improperly allowed the car onto the course, as the car “came out of nowhere.” The Federation claims that it cannot be held liable to Johnson because Johnson signed a release exculpating the Federation from responsibility for any personal injury resulting from his participation in the race. Based on these facts, who wins and why? Please discuss all relevant issues.
Small Business Management Launching and Growing Entrepreneurial Ventures
ISBN: 978-1305405745
18th edition
Authors: Justin G. Longenecker, J. William Petty, Leslie E. Palich, Frank Hoy