COURSE: CANADIAN BUSINESS LAW

1.An elderly, illiterate widow, Evelyn Machnick, wished to sell her farm. She put an advertisement in the local paper. The ad was silent on price as she had no idea what the land was worth. Several real estate agents came to see her to suggest the farm value was around $125,000. She then went to see the only lawyer in town, (who incidentally also acted for town council and the real estate agents), to discuss her intended wish to sell. The lawyer was aware the town planned to expand its boundaries, which would greatly increase the value of the farm. The lawyer verbally offered to buy the farm for $125,000, which Mrs. Machnick verbally agreed to. The lawyer drew up the paperwork and had her sign, signifying her agreement. The Transfer was registered and the monies paid. When Mrs. Machnick called her nephew, a real estate lawyer in a nearby city, to seek advice on how to invest the money, he immediately saw the implications and sought to set the sale aside.

a.Discuss the issues liable to be raised by both parties.