On April 13 Alan went to view a house for sale at 108 View St. owned by Bernice. A real estate agent named Cam assisted Bernice. After looking through the house for a few minutes, Alan noticed a crack in the floor in the main entrance and asked Bernice about it. Bernice said that this was due to a minor settling problem and that it was common for the area.Bernice also told Alan that he shouldn't worry about the crack since it had been that way since she had owned the house.

After inspecting the house, Alan and Bernice agreed on a price of $170,000.Alan agreed to give Bernice a deposit of $10,000 pending completion of the sale.At issue was the completion date (the date title to the property transfers and money changes hands).Alan wanted to delay completion as long as possible because he was depending on the sale of his own house to provide the proceeds for the purchase.Bernice wanted to move out of her house as soon as possible.They eventually settled on the date of May 15 as the completion date, but Bernice agreed that if Alan required more time she would grant him an extension of one month.

On April 15 Bernice's agent, Cam, recorded their agreement in writing as follows:

Alan agrees to buy and Bernice agrees to sell 108 View St. at a price of $170,000.

The Completion date is May 15

Bernice acknowledges receipt of a deposit of $10,000 to be forfeited as damages if Alan does not complete the purchase as required in this agreement.

Alan agrees that he has read and clearly understands the contract and acknowledges that it accurately sets out all the terms and that he was not induced to make it by any representations, warranties, guarantees or promises expressed or implied not contained herein. Alan agrees that Bernice will not be liable for Alan for any damages arising out of any reliance on any representation, warranty, guaranty or promise expressed or implied not contained herein.

Both parties then signed the agreement.No mention was made of the possibility of an extension of time necessary for completion, as Bernice's real estate agent, Cam, said it was unnecessary to record every detail in writing.

a)5 marks

Suppose that Alan's own house did not sell by May 5 and so on May 6^th Alan called Bernice to tell her that he would be unable to complete on May 15^th. Bernice elected to treat the contract as discharged immediately, insisting that she had the right to keep the deposit. Alan was shocked and thinks that Bernice must wait until the completion date of May 15^th before treating the contract as discharged. Who is correct? Explain your reasoning fully with reference to all relevant legal principles and cases studied in

class.

b)5 marks

Suppose the facts are that Alan's own house did not sell by May 15^th and so he requested that Bernice honor her commitment to extend the completion date. Bernice refused to do so insisting that she had the right to keep Alan's deposit. Alan is now suing Bernice for breach of contract and is claiming the return of his deposit. Bernice plans to argue the parol evidence rule. Based on this rule of law, is Bernice obligated to honor her commitment to extend the completion date? Explain the rule fully and whether it would or would not apply in this situation with reference to any applicable case law studied in class.

c)10 marks

Suppose that a court finds that Alan has breached the contract with Bernice. On May 15^th, when Alan didn't complete the contract, Bernice immediately relisted the property for sale. On June 7^th she accepted an offer from Bob to buy the property for $180,000. Alan says that Bernice is not entitled to keep his deposit because she suffered no losses as a result of his breach. Do you think a court would allow Alan to claim the return of the deposit? Explain your reasoning fully with reference to any relevant legal principles and cases studied in class.

d)10 marks

Suppose that Alan was able to complete the contract on May 15^th but when he moved into the house, he found that the "minor" settling problems that Bernice had described were in fact much worse.The cost of repairing the defects is $12,000 and Alan has commenced an action against Bernice for this amount.Comment on the success or failure of this action. Explain your reasoning fully with reference to any relevant legal principles and cases studied in class.