Sara and Bob love to bodybuild and stay fit. They work out a minimum of 4 hours per week and they want to spend the majority of their time exercising and increasing their stamina. So they decided under these COVID conditions to open up a gym and do what they love, working out. They lease space in Rancho Cucamonga and sign a lease with the Owner for 5 years to rent the property and the parking lot. Owner negotiates for 5 years the sum of $5300 per month, in addition to 1 percent of the sales of the studio to compensate him for the reduced rent compared to the market value of $7300 that that type of space would command. Sara and Bob agreed.

So Owner gave Sara and Bob possession of the premises of his property in exchange for the lease and the down payment on the first month's rent. Sara and Bob spent $40,000 and 2 weeks getting the property together with the signs changed, the premises painted and prepared for safety considerations, as well as the proper licensing to run a gym in San Bernardino County. Sara and Bob also created advertising and placed it on Instagram and Facebook about the gym's opening. In all, they spend $63,000 on the gym's opening.

The owner never told Sara and Bob about a termite problem in the gym. It was acute in the ceiling of the structure and made some of the rafters litter down pieces of wood on the workout floor. Because of this, the gym had to close down for repairs. Sara and Bob lost money, and their investment was turning sour.

Sara and Bob asked the Owner to honor his warranty of habitability of the premises and to eliminate the termite problem. The owner said that it wasn't his problem, that Sara and Bob brought the termites with them when they were moving in the gym equipment, and it wasn't his problem. This evolved into a contract dispute that was presented in California Superior Court.

Your assignment in this discussion post is to:

1. Identify the contract remedies that a court could impose to make this contract reparable.

2. Sara and Bob have invested a lot of money in this enterprise. Is this a restitution issue? How can the parties be made whole in this dispute?

3. Should there be punitive damages awarded to the Owner in this case? If so, what is the concept of punitive damages and what are they designed to do, not only to the Owner but also to the rest of the world?