1. Gary and Jean, a married couple, own property in Charleston. On August 1, they enter into a contract to sell the property to Katie and Andrew for price of $600,000 and undertake to convey good and marketable fee simple title to the property by delivery of a warranty deed at a closing to be held November 1.On August 10, Gary and Jean take out a 60-day loan in the amount of $100,000 secured by a mortgage against the property.Katie and Andrew learn about the loan on August 15 and object in writing to the placing of the mortgage lien against the property.They insist that the action by Gary and Jean is improper because, as sellers, they have already contracted away the ability to deal further with the property.Gary and Jean respond by saying that Katie and Andrew are wrong.Which party is correct and why?
2. Assume that only Gary signed the contract of sale with Katie and Andrew on August 1. Jean was out of town that weekend and did not find out about Katie and Andrew until a week later.On October 12, during the contract period, a major business from the northeastern US announces that it will relocate to the Charleston area and that it expects tohire 3,000 new employees.

This news drives the price of housing up and Gary realizes that their home is now worth $900,.000.On October 30, Gary sends a notice to Katie and Andre3w stating, "My wife, Jean, refuses to sign off on the contract and likewise as to any deed, thus I will not be able to go any further with the discussions we have been pursuing concerning the sale of my home, unless, of course, you are willing to increase your offer price to $900,000"Katie and Andrew are shocked when they receive this note.Are Gary and Jean permitted to do this?.Will they have to pay damages? Can Katie and Andrew specifically enforce the contract?If Gary and Jean can escape an obligation under the agreement, how might a buyer reduce the risk of a similar loss in a future deal?