Question
James and Joanna Medley entered into a contract to sell a fitness franchise to Theresa Adams. The parties signed a written Asset Purchase Agreement on
James and Joanna Medley entered into a contract to sell a fitness franchise to Theresa Adams. The parties signed a written "Asset Purchase Agreement" on October 1, 2014. The purchase price was $125,000, payable at closing. Later, on October 7, 2014, the parties signed a second document entitled "Sales Agreement Addendum." This addendum set the price of the business at $155,000, with $135,000 payable at closing. Of that $135,000, $125,000 was to be paid from the proceeds of a loan secured by Adams from First National Bank, and $10,000 was to be paid in cash. The remaining $20,000 of the purchase price was to be paid to the Medleys in monthly installments based on sales. The closing was set for October 30. On that date, Adams tendered the $125,000 from the First National Bank loan, together with $10,000 comprised of two personal checks drawn on Adams's bank accounts. Shortly thereafter, the relationship between the Medleys and Adams soured. Adams stopped payment on one of the personal checks she presented at closing, and she stopped making the monthly payments in March 2015. The Medleys sued Adams for breach of the addendum. Adams claimed that the addendum was not enforceable because it was not supported by consideration.
Who is correct?
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