On June 1, Bethune entered into an agreement to purchase the Happy Hour Bar and Restaurant. The purchase price was $400,000, with a down payment of $50,000.The balance was payable September 1, when Bethune was to take possession of the business. In anticipation of his start in the restaurant business, Bethune quit his job and enrolled in a three-month community college course on restaurant management. On August 1, the owner of the restaurant notified Bethune that she had received another offer to purchase the restaurant for $425,000 and she intended to sell the businesses to the offeror. Bethune objected to the restaurant owner's actions and threatened to take legal action against her if she proceeded with the proposed sale. A few days later, the restaurant owner did, in fact, enter into an agreement to sell the business t Volrath, the new purchaser, for the purchase price of $425,000. The closing date of the transaction was to be September 1. She then mailed a cheque to Bethune for the $50,000 she had received from his previously as his deposit. Bethune immediately returned the cheque an insisted that the restaurant owner proceed with the sale of the restaurant to him in accordance with their agreement. On Aug 28 the local newspaper contained an announcement of the opening of a new restaurant in a large office building across the street from the Happy Hour Bar and Restaurant. The office building housed most of the customers of the Happy Hour Bar and Restaurant, and the new restaurant could be excepted to take two thirds of the lunch customers and one third of the dinner customers from the Happy Hour Bar.

The enouncement came as a surprise to all parties. Volrath immediately wrote a letter to the owner of the Happy Hour Bar in which he indicated that he did not intend to proceed with the transaction unless the owner reduced the purchase price to $200,000. Bethune was out of town on business on Aug 28 and he did not become aware of the new competitor until Sept 1 the proposed closing date for his purchase of the restaurant.

Advise each of the parties of their legal position.