Review the facts below memorandum discussing the 1) contract issues 2) whether there was a breach 3) whether anyone is entitled to damages and 4) what damages and remedies are appropriate, if any. Keep in mind that the purpose of this Memo is to educate your fictitious client

Background Facts:

Alan purchased land and built a Dairy Kween franchise restaurant in a prime location in West Des Moines, Iowa. He opened for business in February 2019. The loan to buy the land and build the property was large, with a high interest rate. When COVID hit and people chose to stay home he could not make ends meet. Even with a drive thru and people wanting to pick up food, he was still in a deficit every month. Seeing that he was about to lose his business to foreclosure and knowing that he would get more money if the business was a "going concern" than he would if all assets were sold separately at auction, he decided to try and sell the Dairy Kween. After a prolonged search he found Eli, a potential buyer who was a wealthy dentist. Eli was interested in purchasing the where his entitled teenaged son could learn to work.

Alan and Eli entered into negotiations. Alan wanted to sell the property and all assets to Eli for $800,000. He also offered that he would help Eli get started by being a Dairy Kween consultant at no extra charge. Eli agreed and was ready to purchase the business. He the entire purchase price into escrow (an account with a neutral third party) while they worked on closing the deal. Alan and Eli soon received a notice from the Dairy Kween Corporation ("DKI") that it would not transfer the franchise to Eli because of his lack of experience in fast food management. Without the franchise, Eli could not operate the restaurant as a Dairy Kween, and therefore refused to go through with the purchase. Facing foreclosure and uncertain that he would be able to find another buyer, Alan was desperate to make the deal with Eli work. He came up with a plan and told Eli that Eli could take over the business and run it for 4 months. At the end of the 4 months of successfully running the business Alan was confident that DKI would transfer the franchise to Eli and the sale would go through.

Alan and Eli sent several emails and texts back and forth to work out the specific details. Finally they agreed that Eli would run the business from July 2020 through October 2020 in order to gain the experience DKI required. During that time Eli would pay all expenses, such as the franchise fee, the $10,000 monthly loan payment, and cover any losses from the business. Alan would work at the Dairy Kween full time. He would manage the employees, handle the ordering of supplies until he was able to teach Eli's employeeChristine--how to become the manager. Eli would not pay Alan a salary, but Alan figured it was worth it because he would make $300,000 profit from the sale. He knew that he would make nothing if the property and all assets were sold at the trustee's sale. At the end of October, 2020, Eli would purchase the Property and all assets for $800,000, using the $400,000 Eli had in escrow. They didn't sign a contract because Alan was afraid that DKI would take away his franchise if they found out what he was doing, and that the Bank would immediately foreclose, and he would lose everything.

Eli and his manager Christine took control of the Dairy Kween on July 1, 2020. They deposited all funds received from that point on into new bank accounts that Alan had no access to, and paid all debts out of those accounts. The same day Alan called an all-employees meeting where he introduced Eli to the employees as "the new owner" and Christine as the new "manager- trainee."

On July 2, 2020 Eli learned that Alan hadn't paid franchise fees to DKI in 3 months. Frustrated, Eli paid the $9,000 in past due franchise fees. Eli also paid past due amounts owed to City Electricity in the amount of $2,000 and $1,500 to City Water & Waste, and $1,000 owed to a food supplier. Alan had not told Eli about these past due amounts.

Almost immediately Christine started an aggressive advertising campaign. She cut costs and improved quality and cleanliness. She made a number of contacts in the area and set up corporate events and catering at the DK. Eli hired his son to work at the DK. The DK became a popular lunch spot for the executive crowd, and a high school hang out during after school hours and weekends. They also worked out arrangements with local schools and community events to be a vendor.

By the end of September the DK was not only making money but doing exceptionally well. Alan did not know the exact income but figured it was twice what he had been making.

On October 16, 2020, DKI notified Eli that they would not transfer the franchise from Alan to him unless and until Alan sent in a signed "Acknowledgement and Notice" that he had sold the Dairy Kween to Eli. That day he notified Alan what DK said, and requested that Alan immediately provide the Acknowledgement and Notice to DKI. Over the next few days, Alan considered the situation. He realized he wanted the business back, and figured out what he could do. He stalled on giving Eli the notice required by DKI, promising to give it to him by October 30.

On October 30, 2020 Alan texted Eli:

Hey, as you know tomorrow is the day I return to managing my Dairy Kween. I hope you learned a great deal while running my beautiful DK. I trust that it was a good experience and training for both you and your employee, Christine. With this experience you should be ready to start your own DK or whatever fast food establishment you choose to pursue. Best wishes, Alan

Eli was stunned and confused by Alan's message. Then Christine called, telling him that she had been escorted off of the DK property that morning by West Des Moines police officers. Alan called the police after she had refused to give him to combination to the safe in the DK office, and refused to leave the DK when Alan told her she was no longer welcome there.

Now, Eli wants the best, so he has come to you for help. He would still like to purchase the Dairy Kween, or at the very least, get as much money as possible back. He wants to know what his rights and remedies are in regard to the property, if any.Explain all of his options and discuss any obstacles and the likelihood of success. Explain the reasons for your answer.And finish with a conclusion as to whether or not Eli is likely to prevail if he brings suit against Alan.