RESEARCH PROJECT FORMAT

1. Brief Statement of Facts

• A few paragraphs briefly discussing the case and identifying who is suing who for what.

1. Causes of Action
   1. Fraudulent Misrepresentation by Affirmative Statements (Someone said something about the condition of the house/property)
      1. Who is Suing Who & For What Amount
      2. Elements of Law (List out the Law)
      3. Apply Law to Facts
      4. Defenses (Apply Law to Facts)
      5. Mini-Conclusion (Who Wins and Why)
   2. Fraudulent Misrepresentation by Concealment (Someone hiding something to prevent another from learning?)
      1. Who is Suing Who & For What Amount
      2. Elements of Law (List out the Law)
      3. Apply Law to Facts
      4. Defenses (Apply Law to Facts)
      5. Mini-Conclusion (Who Wins and Why)
   3. Fraudulent Misrepresentation by Silence (Duty to Disclose?)
      1. Who is Suing Who & For What Amount
      2. Elements of Law (List out the Law)
      3. Apply Law to Facts
      4. Defenses (Apply Law to Facts)
      5. Mini-Conclusion (Who Wins and Why)
2. Conclusion

• Who wins in what amount on each cause of action. Sums up all the mini conclusions.

BUSINESS LAW

WRITTEN MEMORANDUM PROJECT

WRITTEN MEMORANDUM

You are a law clerk working for a lawyer in New York who wants an analysis performed on the case above (do not take sides - analyze it in the eyes of a neutral party - like a judge). You are expected to interpret and analyze the facts of the case below and draft a comprehensive memorandum which sets forth and analyzes the following: (1) the causes of action the parties in the case may have against each other based on the law learned in the text and class (e.g., breach of contract,fraudulent misrepresentation, etc.); and (2) who wins on each cause of action, why (not only should you cover a discussion of each cause of action but potential defenses as well) and in what amounts, if any. The paper should thoroughly analyze each cause of action (show the elements required for each cause of action, potential defenses and exceptions, and apply the facts thereto). The paper should contain a conclusion on each cause of action which is based on a logical application of facts to the law. There is no page requirement for this memorandum, however, you are expected to thoroughly determine and analyze all applicable causes of action. The paper will likely be between 8 to 12 pages double-spaced.

Issues to Consider and Analyze:

1. Determine which facts are relevant to a lawsuit between the parties. You should state the relevantfacts at the beginning of your memorandum.

2. What causes of action should Baron Obaka allege against John Pealin in the lawsuit? What is the basis for those causes of action? What are the elements required for each cause of action and do the facts or evidence listed above (assume the facts above to be evidence) support a favorable ruling on each of the elements? Be very specific.

2. What is the amount of damages Baron should seek from John on each cause of action? Why?

3. What defenses, if any, should John raise against each causes of action? Why?Will any potential defenses that are raised likely be successful? Be very specific.

4. Who should win on each cause of action? Why? Taking into consideration all causes of action and any defenses, what is the total amount of damages Baron should recover from John? Why?How are damages calculated? Be very specific and thorough in coverage.

ASSUMED FACTS

John Pealin is a full-time public speaker and part-time real estate agent. John and his wife own numerous houses across the country, including an old four story house in the city of Basilla. For a few years, John served as mayor of Basilla, before moving on to his public speaking job outside of Basilla. Before John bought the house in Basilla in 1988, the house was the site of a murder-suicide that occurred in the late 1970's, whereby a husband killed his wife and four children, then committed suicide. Basilla is a small farming and fishing town, which is not near any major metropolitan areas.Basilla is a bit more isolated than most communities since rivers and waterways surround the town, although, a bridge was built in Basilla to provide an access route to a highway as well as a small airport. All of the residents of Basilla know the story about the murder-suicide that occurred in the house. The house is known to be haunted in the community because of stories they have heard from John, prior owners, and guests who have stayed in the house. Also, the murder-suicide and haunting stories have been published in the Basilla newspaper over the years. While acting as mayor, John had asked the town librarian if the local newspapers could or would ever be destroyed. The librarian informed John that the newspaper articles would be placed on microfish and stay in the town library forever. Everyone in the town of Basilla was afraid to visit John at his house because of the hauntings. John occasionally rented the house to people overnight, largely in part due to the hauntings, as from time-to-time some people have been intrigued to stay the night in a "haunted house" and they were willing to pay John to witness "ghosts." Since John has a number of houses and is afraid to stay in the house in Basilla due to the increased intensity of paranormal activity, John decided to sell the house.

On January 1, 1989, John began advertising his home for sale in a national home registry on a weekly basis, as well made a listing of his house on E-bay along with his private jet. The price John listed his house for in the registry was $230,000. The advertisement in the registry also stated that the house was in a peaceful neighborhood and in perfect condition. A few people in Basilla inquired about the house, but decided not to buy it since they would not be willing to pay anything close to $230,000. A number of people outside of Basilla looked into buying the house, but became aware of the alleged haunting and decided not to pursue purchasing the house. In December 1989, a local real estate company told one prospective purchaser that he believed the fair market value of the house was $160,000 because of the negative effect of the hauntings, and without the hauntings, the house would likely sell for $240,000.

Baron Obaka is a youth group organizer and basketball coach who lives in Belleville, which is five hundred miles from Basilla.Baron puts on summer camps for teens aspiring to play collegiate and professional basketball. Each basketball camp lasts for 3 weeks and the students live with Baron in his house for the entire camp. Baron puts on 4 camps every summer and has 12 basketball students during every camp session. Each student pays $3,000 to attend the camp. The average cost of food, electricity, and essentials for each student, which is paid by Baron is $800. Baron typically has thousands of students on a waiting list to join the camp, as he is extremely well known across the country and has a superb reputation for teaching basketball and accelerating his basketball students' skills. Baron decided that he would move to Basilla to get away from the big city life of Belleville, so that he could better concentrate on coaching and teaching basketball players. Also, the seclusion would allow the basketball students to better focus and concentrate on basketball rather than certain outside activities that are available in a bigger city. Baron surveyed potential basketball students and their parents on whether the basketball students would likely attend a camp if Baron held it in Basilla, and the response was overwhelming.It was strongly projected that more basketball students would be willing to sign-up for a camp in Basilla, since it would allow for less distractions and more focus on basketball. On June 1, 1990, Baron contacted John regarding John's house and the two arranged a meeting for Baron to view the house on June 15, 1990.

On June 7, 1990, torrential rains hit Basilla and John's basement flooded with water. He immediately began sucking up the water with a vacuum so that anyone viewing the house would not know water flooded the basement. John had never had water leak in his basement before, so he believed that the odd occurrence was solely due to the torrential rains.

On June 15, 1990, Baron traveled to Basilla to look at John's house. John and Baron met at the house and according to John, "Baron was obnoxious, full of himself, and seemed to be under the influence of alcohol or some kind of drug". During Baron's visit, John showed Baron the entire house, however, John did not mention anything about the water that leaked a few days earlier, nor did he mention anything about the hauntings in the house or the murder-suicide that occurred decades earlier. While walking through the basement, Baron noticed a musty smell and that a small amount of mold was growing at the base of most of the walls. Baron did not ask John about the mold because he figured he would easily be able to clean the mold after he moved in. Baron loved the house and told John that he would call him to negotiate a potential purchase. While Baron was walking to his car after the visit, a neighbor of John asked Baron if he "saw any ghosts" while walking through the house. Baron laughed and said "of course I did...ghosts, elephants with lipstick, and blue diamonds ... must have been those two drinks I had with my back pain medication I took earlier." Baron then got in his car and left.

On July 1, 1990, Baron entered into a written agreement to purchase John's house for $190,000.00. The written agreement stated that seller does not make any representations or warranties concerning the condition of the house. On September 1, 1990, the parties closed the agreement and Baron moved into the house. Baron immediately began construction of a small basketball facility on his lot, which cost him approximately $28,000. On October 15, 1990, a rainstorm hit Basilla. After being awoken by the rain, Baron went to the kitchen to make a late night snack and noticed a ghost like figure in the kitchen. Baron thought the ghost was cool and decided to set up cameras in the house to capture it on film. Baron went down in the basement to get his camcorder and noticed that the basement was flooded with water. The next day Baron called a contractor to see what the problem was with the basement and the contractor said it had to be a cracked foundation. The contractor said it would likely cost around $15,000.00 to fix the foundation. Baron contacted another company about removing the water from the basement and was told the cost would be $500.00. Baron called John and told John that he would have to pay for the contractor to fix the foundation and pay someone to remove the water from the basement.John told Baron to get lost because he made no representation that the foundation was free from defects in the contract.

Baron decided that he was not going to clean up the water because he believed John should pay for the cleanup costs and he really could not afford to pay for such costs at the time. As a result of his anger towards John, over the next few months the basement walls and flooring became warped and covered in mold. Baron continued to experience hauntings, but they did not bother him at all. On February 10, 1991, Baron received his tax return and he hired the contractor to fix the foundation. Baron was charged $18,000.00 for the foundation because of a recent increase in the price of his work. Likewise, Baron was forced to hire another contractor to re-drywall the basement because the water ruined the walls since it was not cleaned up for weeks. The cost of replacing the basement walls and flooring was $5,000.00.

Baron had successful camps during the summer of 1991, except that numerous students complained of paranormal activity, which frightened them. Almost all of the basketball players told Baron they would not likely return to future camps because of hauntings and their fear for staying in the house. The alleged haunting became well known by many basketball students across the country, as stories from the students attending the camp were broadcast on news stations, newspapers, and via internet websites. On February 1, 1992, Baron decided he was going to sell the house and move back to Belleville because he had aspirations to become a state senator. Baron contacted a real estate agent to sell his house and was told that the fair market value of the house was $160,000.00 since the house was known to be haunted.Baron wanted to move quickly, however, only one prospective purchaser offered to buy the house for $130,000.00.Baron rejected the offer and did not exhaust much effort to see if there were other purchases who would be will to pay more. Baron figured he would make enough money that he would not need to sell the house and its value may appreciate, so he decided it may be better to wait to see if he recoup his losses as a result of the value increasing.

In July 1994, a few years after moving back to Belleville, Baron began experiencing financial difficulties, so he contacted a real estate agent to sell the house for him. A valuation was performed on the house, and Baron's real estate agent informed him that due to a nationwide financial crisis and lack of home buyers in the market, the value of the home dropped plummeted and that he would likely only get about $110,000 for the home if he tried to sell it. Baron knew he was wronged by John Pealin and believed he wasn't told the truth about the house he purchased, so he wanted to either give the house back to John or sue him for damages he incurred. Baron filed a lawsuit against John on October 1, 1994.

Legal Assumptions:

Assume the propositions of law provided below (Exhibits "A" thru "L") are the applicable laws. The case of Ackley v. Stambovsky (Exhibit "M") should be utilized as persuasive authority (from another jurisdiction) in your arguments.

Exhibit "A"

Statute of Limitations

A party cannot successfully pursue any cause of action for which a statute of limitations has run.

A party must bring a cause of action for breach of written within 4 years for an oral contract and 5 years for a written contract. The discovery principle does not apply to a cause of action for breach of contract.

A party must bring a cause of action for fraudulent misrepresentation within 4 years from the date upon which all elements of such cause of action are met, unless such party could not have discovered the facts giving rise to such cause of action under the discovery principle, and in such a case, the statute of limitation begins to run on the date of discovery.

"Discovery, as applied to the statute of limitations, occurs when one knows of the existence of an injury or damage and not when he or she has a legal right to seek redress in court." St. Paul Fire & Marine Ins. Co. v. Touche Ross & Co., 244 Neb. 408, 417, 507 N.W.2d 275, 281 (1993).

Under the discovery principle, discovery occurs when there has been discovery of facts constituting the basis of the cause of action or the existence of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery. Id. It is not necessary that the plaintiff have knowledge of the exact nature or source of the problem, but only knowledge that the problem existed." Board of Regents v. Lueder Constr. Co., 230 Neb. 686, 696, 433 N.W.2d 485, 491 (1988)

Exhibit "B"

Fraudulent Misrepresentation

"A cause of action for fraud is based on an affirmative misrepresentation of a material fact . . . or a failure to disclose a material fact relating to a transaction which the parties had a duty to disclose." Harton v. Harton, 81 N.C. App. 295, 297, 344 S.E.2d 117, 119 (1986)

Fraud must be pleaded with specificity as to at least three elements: (1) intentional misrepresentation of a pre-existing material fact by the defendant or the omission or concealment of a material fact if there is a duty to disclose, (2) reliance on the misrepresentation or concealment which induces the plaintiff to act, and (3) injury to the plaintiff resulting from the misrepresentation or concealment.

The failure to disclose a fact constitutes a misrepresentation if the defendant has a duty to disclose that fact. If there is a duty to disclose a fact, failure to disclose that fact is treated in the law as equivalent to a representation of the nonexistence of the fact.

In cases of fraud by omission, the plaintiff must allege the following with reasonable particularity: (1) the relationship giving rise to the duty to speak; (2) the event or events triggering the duty to speak and/or the general time period over which the relationship arose and the fraudulent conduct occurred; (3) the general content of the information that was withheld and the reason for its materiality; (4) the identity of those under a duty who failed to make such disclosures; (5) what those defendants gained by withholding information; (6) why plaintiff's reliance on the omission was both reasonable and detrimental; and (7) the damages proximately flowing from such reliance. Chrysler Credit Corp. v. Whitney Nat'l Bank, 824 F. Supp. 587, 598 (E.D. La. 1993).

In order for silence or an omission by the defendants to be actionable fraud, it must relate to a material matter known by the defendants which they had a legal duty to communicate to plaintiff, "whether that duty arose from a relation of trust, from confidence, inequality of condition or knowledge, or other attendant circumstances. Setzer v. Old Republic Life Ins. Co., 257 N.C. 396, 399, 126 S.E.2d 135, 137 (1962)).

Even if a party otherwise has no duty to disclose a particular matter, should that party speak about it, then a full and fair disclosure may be required. Shaver v. N.C. Monroe Constr. Co., 63 N.C. App. 605, 614, 306 S.E.2d 519, 525 (1983), review denied, 310 N.C. 154, 311 S.E.2d 294 (1984).

Exhibit "C"

Contracts

In order to have a contract, which is a legally enforceable agreement, the following elements must be present: (1) agreement; (2) consideration; (3) capacity; and (4) legality. General Contract Principles

Each party to a contract has an obligation to perform his or her promises made in connection with such contract. General Contract Principles

Exhibit "D"

Duty to Disclose

A legal duty to disclose arises in three situations. The first instance is where a fiduciary relationship exists between the parties to the transaction. The second situation giving rise to a duty to disclose is where the parties are negotiating at arm's length and one party takes affirmative steps to conceal materials facts from the other. The final instance where a party negotiating at arm's length has a duty to disclose is where one party has knowledge of a latent defect in the subject matter of the negotiations of which the other party is ignorant and which it is unable to discover through reasonable diligence. Harton v. Harton, 81 N.C. App. 295, 344 S.E.2d 117 (1986).

Where a material defect is known to the seller, and he knows that the buyer is unaware of the defect and that it is not discoverable in the exercise of the buyer's diligent attention or observation, the seller has a duty to disclose the existence of the defect to the buyer. Harton v. Harton, 81 N.C. App. 295, 344 S.E.2d 117 (1986).

Exhibit "E"

Material Fact

A fact is "material" if the '"fact untruly asserted or wrongfully suppressed, if it had been known to the party, would have influenced [its] judgment or decision in making the contract at all.'" Godfrey v. Res-Care, Inc., 165 N.C. App. 68, 75-76, 598 S.E.2d 396, 402 (2004).

Exhibit "F"

Latent Defect

A "latent defect" is an imperfection that is not discoverable by reasonable inspection. BLACK'S LAW DICTIONARY (8th Ed. 2004).

Exhibit "G"

Real Estate Law

Ever real estate broker is obligated to act with honesty and reasonable care when acting in his or her capacity as a broker for a customer or client. A real estate broker has a duty to disclose materially adverse facts actually known by the broker concerning the property subject to the transaction. Belle Rev. Stat. Section 70-5 (2008)

Exhibit "H"

Remedies

Damages - A party can recover damages only for those losses that he or she can prove with reasonable certainty. A breaching party is responsible for paying only those losses that were foreseeable to him at the time of contracting. Plaintiffs injured by a breach of contract have the duty to mitigate damages.

Rescission - Rescission is an equitable remedy granted by a court, which requires each contractual party to be placed in a position they were in prior to entering into the contract. A party can rescind a contract only if he or she cannot seek an adequate remedy at law, such party does not have "unclean hands", and in situations where there was a lack of capacity, undue influence, material breach.

Exhibit "I"

Mitigation of Damages

A party has an obligation to mitigate damages and a party cannot recover damages for which he or she could have reasonably mitigated.

Mitigation of damages is defined by Black's Law Dictionary 904 (5th ed. 1979), as follows:

[The] [d]octrine of "mitigation ofdamages," sometimes called [the] doctrine of avoidable consequences, imposes on [an] injured party [the] duty to exercise reasonable diligence and ordinary care in attempting to minimize hisdamagesafter injury has been inflicted and care and diligence required of him is the same as that which would be used by [a] man of ordinary prudence under like circumstances.

Exhibit "J"

Waiver of Representations and Warranties in Contracts

A party can expressly waive representations and warranties concerning the condition of property in a written contract. General Contract Principles

Exhibit "K"

Caveat Emptor

The doctrine of "caveat emptor" is an axiom or principle in commerce that a buyer alone is responsible for assessing the quality of a purchase before buying.General Contract Principles

Exhibit "L"

Intoxication

Intoxication can deprive a person of capacity to contract. Intoxication is a ground for lack of capacity only when it is so extreme that the person is unable to understand the nature of the business at hand. A person incapacitated by intoxication at the time of contracting will be bound by such contract if he or she fails to disaffirm in a timely manner. General Contract Principles

Exhibit "M"

169 A.D.2d 254 572 N.Y.S.2d 672

Jeffrey M. STAMBOVSKY, Plaintiff-Appellant,

v.

Helen V. ACKLEY and Ellis Realty, Defendants-Respondents.

Supreme Court, Appellate Division,

First Department.

July 18, 1991.