Thai Tu BA 226 Instructor: Yong Yang Assignment 4 1. Beth Lane suffered from dementia and chronic confusion. When she became unable to manage her own affairs, including decisions about medical and financial matters, her son James arranged for her move to an assisted living facility. During admission, she signed a residency agreement, which included an arbitration clause. After she sustained injuries in a fall at the facility, a suit was filed to recover damages. The facility asked the court to compel arbitration. Was Dorothy bound to the residency agreement? Discuss. In my opinion, Beth does not bound to the residency agreement because when Beth sign the contract, she was suffering from dementia and chronic confusion. Therefore, it does not meet the condition to make the contract legitimate. I think in this situation, the son should sign the contract on behalf on his mother so that the contract is valid. Furthermore, it looks like the son didn’t provide any medical record about his mother sickness. So, in this case, the court should compel arbitration. 2. Tom owns a forty-room motel on Highway 100. Andy is interested in purchasing the motel. During the course of negotiations, Tom tells Andy that the motel netted $30,000 during the previous year and that it will net at least $45,000 the next year. The motel books, which Tom turns over to Andy before the purchase, clearly show that Tom’s motel netted only $15,000 the previous year. Also, Tom fails to tell Andy that a bypass to Highway 100 is being planned that will redirect most traffic away from the front of the motel. Andy purchases the motel. During the first year under Andy’s operation, the motel nets only $18,000. At this time, Andy learns of the motel’s previous low profits and the planned bypass. Andy wants Tom to return the purchase price. Discuss fully Andy’s probable success in getting his funds back. In this case, I think both have their false. Tom made a false representation to Andy about the motel last year net income, which can consider deceiving. And Andy’s false is he although he has been given the motel books by Tom, he didn’t read it at all, and he only rely on Andy’s misinformation about the net income to decide to purchase the motel. In this situation, I think Andy has higher winning probability because if we based on the motel books, this is a fraud because Tom didn’t honest about the income. And Andy is the victim from Tom’s fraud. 3. Sally promises a local hardware store that she will pay for a lawn mower that her brother is purchasing on credit if the brother fails to pay the debt. Must this promise be in writing to be enforceable? Why or why not? What if the sole purpose of her brother buying the lawn mower was to mow the 2 acre lawn at Sally’s palatial mansion every week, would Sally’s promise have to be in writing to be enforceable? Why or why not? Yes, the promise should be in writing to be enforceable because this is related money, and she is not primary party, which is her brother. She is third party. Therefore, the promise should be in writing so that Sally can legally pay for her brother. In the second situation, I think her promise still has to be in writing to be enforceable with the same reason at the first situation. No matter what the purpose of her brother does to the lawn mower, it is still related to money, and Sally has to have written promise to legally pay for her brother.
