Question
Janice and Sally were social acquaintances and had known each other for about three years. They had never had any direct financial dealings before now.
Janice and Sally were social acquaintances and had known each other for about three years. They had never had any direct financial dealings before now. Janice had accepted a new job opportunity in Austin and discovered that Sally owned some land there and Janice became interested in buying it. While sitting in Sally's law office in Oklahoma City negotiating the sale of Sally's vacant land in Austin, Sally mentioned that as far as she knew the land was suitable for the various uses. She also said there were no restrictions, legal or otherwise, which would prevent the construction of an office building on that land. Janice ultimately purchased the tract. Shortly after moving to Austin, Janice had an opportunity to sell the tract for a profit of $50,000. However during negotiations for that sale, the prospective purchaser discovered that the land was within an area zoned for single family residential use only. It was also discovered that due to certain geological subsurface conditions, no building of any kind could be built on the property. At this point, Janice decided to sue Sally, seeking all possible remedies, claiming reliance on Sally's representations. After hiring your office to represent Janice, it was learned that Sally, will testify that she was licensed to practice law only in the state of Oklahoma and had no special knowledge of Texas law, much less knowledge of Austin's city ordinances. She will also testify that she had never been to Austin and never had any occasion to learn anything about any conditions that might prohibit construction of any kind. You are asked to take all of the above into account and identify and analyze what grounds Janice might have to successfully maintain her suit against Sally. You are also asked to determine what defenses Sally would have to avoid liability and how successful these defenses might be. Also consider, if she is successful, what remedies would be available to Janice depending on what she would be able to prove
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