Problem 2 6 Pak Industries, Ltd (PIL) is a commercial development company founded by Hana Pak, who currently serves as PIL's president and chief executive officer PIL specializes in acquiring income producing real estate, such as office building and apartment projects Jasen is Hana's nephew who has worked with PIL for the last seven years Jasen recently got married, is moving to another state for his new husband's job and is planning to start his own commercial development company In advance of his move, Jasen negotiated a contract with Arnold Woo, the owner of the Village Garden Apartments, to acquire the property for $1 5 million Jasen paid Arnold $25,000 down The contract contains a standard financing contingency clause, which provides that Jasen will not be obligated to purchase the property if he is unable to obtain financing If he cannot obtain financing, however, he forfeits the $25,000 down payment After signing the contract, Jasen went to his aunt to ask for a loan of $1 2 million (80 percent of the purchase price) In response, Hana said, you've been such a good nephew all of your life and an incredibly valuable employee for the last seven years and you just got married Of course I'll finance your new company's first project I'll have something written up and sent over to you in a week or so On September 24, 2022, Jasen received the following loan commitment letter from Holly Schmidt, Hana's personal assistant Mr Jasen Pak 1410 S Virgil St Rosewood, CA 90222 Re Village Garden Apartments Dear Jasen, For valuable consideration received, Hana Pak is pleased to offer a loan commitment to you for the purpose of financing the acquisition of the Village Garden Apartments located at 1919 Downing Street, on the following terms and conditions Borrower Village Garden Limited Partnership You are the sole general partner Any other investors will be limited partners Amount $1,200,000 Purpose to purchase the land and buildings known as the Village Garden Apartments Terms 15 year amortization Interest rate 0 Commitment fee none Collateral first mortgage on the Village Garden Apartment project located at 1919 Downing Street ExpirationdateofthiscommitmentThiscommitmentisvalidfor30daysfromthe date of this letter The Village Garden Partnership must furnish evidence of its organization and its authority to enter into this transaction Opinion of Counsel The note and all other documents with regard to this transaction shall be in a form that is satisfactory to counsel for Hana Pak Closing Expenses Each party will pay their own legal and other expenses incurred If the terms of this commitment are acceptable to you, please sign and date this letter and return it to me in the enclosed envelope If you have any questions, please let me know Sincerely, Holly Schmidt Personal Assistant to Hana Pak Accepted by (date) While Jasen was waiting for the paperwork from his aunt, he had been busy contacting business acquaintances who had invested in some of the other projects Jasen had worked on By the time he received the commitment letter, he had obtained promises from investors for $200,000 of the $300,000 that he needed After receiving the above letter, Jasen continued his efforts, and by October 1, he had put together a group of investors willing to put up $300,000 He immediately contacted Arnold Woo, the owner of the Village Garden Apartments, and informed him that he had obtained financing They agreed to a closing date of October 28, 2022 Jasen also called his aunt's assistant, Holly Schmidt, to tell her that he was accepting the terms of his aunt's loan and would be personally delivering the signed commitment letter the next day Later that afternoon, however, Holly called Jasen and told him that she had just received word from Hana that Hana was withdrawing her commitment letter Jasen was shocked He pointed out that he had already told Holly that he had agreed to the loan Holly was very apologetic and told Jasen that she didn't know why Hana was withdrawing her commitment Jasen then contacted Arnold to inform him of the problem He asked Arnold if he would be willing to agree to an extension of the closing Arnold said he would, but only for two weeks During that time Jasen tried to obtain other bank financing but was unable to do so He finally had to tell Arnold that he was unable to go forward with the purchase As a result, Jasen forfeited his $25,000 deposit Jasen has asked your advice about whether he has any legal rights against his aunt because of her withdrawal of the commitment letter Be prepared to present your analysis of his legal rights and to outline the advice that you would give

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Problem 2-6 Pak Industries, Ltd. (PIL) is a commercial development company founded by Hana Pak, who currently serves as PIL's president and chief executive officer.

Problem 2-6

Pak Industries, Ltd. (PIL) is a commercial development company founded by Hana Pak, who currently serves as PIL's president and chief executive officer. PIL specializes in acquiring income-producing real estate, such as office building and apartment projects. Jasen is Hana's nephew who has worked with PIL for the last seven years. Jasen recently got married, is moving to another state for his new husband's job and is planning to start his own commercial development company.

In advance of his move, Jasen negotiated a contract with Arnold Woo, the owner of the Village Garden Apartments, to acquire the property for $1.5 million. Jasen paid Arnold $25,000 down. The contract contains a standard "financing contingency" clause, which provides that Jasen will not be obligated to purchase the property if he is unable to obtain financing. If he cannot obtain financing, however, he forfeits the $25,000 down payment.

After signing the contract, Jasen went to his aunt to ask for a loan of $1.2 million (80 percent of the purchase price). In response, Hana said, "you've been such a good nephew all of your life and an incredibly valuable employee for the last seven years; and you just got married! Of course I'll finance your new company's first project. I'll have something written up and sent over to you in a week or so." On September 24, 2022, Jasen received the following loan commitment letter from Holly Schmidt, Hana's personal assistant.

Mr. Jasen Pak 1410 S Virgil St. Rosewood, CA 90222

Re: Village Garden Apartments

Dear Jasen, For valuable consideration received, Hana Pak is pleased to offer a loan

commitment to you for the purpose of financing the acquisition of the Village

Garden Apartments located at 1919 Downing Street, on the following terms and conditions:

Borrower Village Garden Limited Partnership. You are the sole general partner. Any other investors will be limited partners.
Amount $1,200,000.
Purpose to purchase the land and buildings known as the Village Garden Apartments.
Terms 15-year amortization.
Interest rate 0%.
Commitment fee none.
Collateral first mortgage on the Village Garden Apartment project located at 1919 Downing Street.
ExpirationdateofthiscommitmentThiscommitmentisvalidfor30daysfromthe date of this letter.
The Village Garden Partnership must furnish evidence of its organization and its authority to enter into this transaction.
Opinion of Counsel The note and all other documents with regard to this transaction shall be in a form that is satisfactory to counsel for Hana Pak.
Closing Expenses Each party will pay their own legal and other expenses incurred.

If the terms of this commitment are acceptable to you, please sign and date this letter and return it to me in the enclosed envelope. If you have any questions, please let me know.

Sincerely, Holly Schmidt Personal Assistant to Hana Pak

Accepted by: (date)

While Jasen was waiting for the paperwork from his aunt, he had been busy contacting business acquaintances who had invested in some of the other projects Jasen had worked on. By the time he received the commitment letter, he had obtained promises from investors for $200,000 of the $300,000 that he needed. After receiving the above letter, Jasen continued his efforts, and by October 1, he had put together a group of investors willing to put up $300,000. He immediately contacted Arnold Woo, the owner of the Village Garden Apartments, and informed him that he had obtained financing. They agreed to a closing date of October 28, 2022. Jasen also called his aunt's assistant, Holly Schmidt, to tell her that he was accepting the terms of his aunt's loan and would be personally delivering the signed commitment letter the next day. Later that afternoon, however, Holly called Jasen and told him that she had just received word from Hana that Hana was withdrawing her commitment letter. Jasen was shocked. He pointed out that he had already told Holly that he had agreed to the loan. Holly was very apologetic and told Jasen that she didn't know why Hana was withdrawing her commitment. Jasen then contacted Arnold to inform him of the problem. He asked Arnold if he would be willing to agree to an extension of the closing. Arnold said he would, but only for two weeks. During that time Jasen tried to obtain other bank financing but was unable to do so. He finally had to tell Arnold that he was unable to go forward with the purchase. As a result, Jasen forfeited his $25,000 deposit.

Jasen has asked your advice about whether he has any legal rights against his aunt because of her withdrawal of the commitment letter. Be prepared to present your analysis of his legal rights and to outline the advice that you would give.