Simon v. Sally

Simon decided to sell a condominium property he owned at Big White to Sally for $750,000.00. After the deal was completed, Simon learned that he had received faulty advice regarding the income tax consequences of the transaction, and that he would be facing a large, and unexpected, tax bill. He contacted Sally and said the deal should be voided, because he had made an error.

Sally told Simon that they had never discussed the tax consequences of the deal during their negotiations and that she liked the condo. She said that she knew there would be a big tax bill for Simon, but she assumed he knew what he was doing when he agreed on the price. She refused to agree that the deal should be set aside.

Simon sued Sally to have the contract ruled void.

1. Identify the legal issue(s) in this case (2 marks).
2. What rule(s) of law will apply in this case (1 mark).
3. Develop arguments for Simon, applying the rule(s) of law to the facts (2 marks).
4. Develop arguments for Sally, applying the rule(s) of law to the facts (2 marks).
5. Who will win the lawsuit? Give a reason for your answer (1 mark bonus).