Question
Lano owns a thirty six room motel on Route 49.Andre Preneur is interested in purchasing the motel. During the course of casual negotiations, Lano tells
Lano owns a thirty six room motel on Route 49.Andre Preneur is interested in purchasing the motel. During the course of casual negotiations, Lano tells Andre
1)that the motel netted nearly $130,000 last year and
2)that it will net at least $145,000 next year.
The motel books,which Lano turns over to her before any purchase agreement is reached, clearly show that Lano's motel netted only $115,000 last year.Also, Lano did not tell Andre that a bypass to Route 49 will redirect traffic away from the front of the motel.Andre purchases the motel.During the first year under Andre's operation, the motel nets only $118,000.It is at this time that Andre learns of the previous low profitability* of the motel(*compared to the statements made by seller)and the planned bypass.Andre wants her money back from Lano.(1)Should she get hermoney back? If yes, on what grounds and if not why not? (2) What information is a buyer entitled to and what information can seller withhold under similar circumstances as our buyer and seller find themselves? (3)Will Andre be able to present a clear case of fraud or misrepresentation with all the necessary elements of eachcause of action?
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