Question: Jesse is considering buying his aunt Karen’s house as an investment. During the negotiations, Karen states, “This house is worth £200,000 and I’ve had two separate valuations from estate agents verifying that, but since I love you so much I’ll sell it to you for £180,000.” Karen has not received any valuations from estate agents and the house is worth only £120,000. Jesse buys the house for £180,000.
Two weeks after Jesse has completed the sale and moved into the house, he discovers that Karen did not receive any valuations from estate agents. The same week, Jesse discovers that the value of the house has been reduced to £80,000 due to serious damage caused by the collapse of a supporting wall. At this point, a buyer offers £80,000 for the house. Jesse does not sell the house until three months later, when Jesse only receives £75,000 for the house because of a general fall of the property market.
Advise Jesse.
Answer: In relation to Jesse’s current situation, the preliminary issue we must identify before preceding to look at other issues arising from this case, is whether there was an intention to be legally bound. The presumption of the intention to create legal relations refers to whether the parties, via their agreement, wish it to be enforced by law therefore in this case the courts must determine whether it is a social/domestic agreements or a commercial arrangement. Firstly, we distinguish the difference between domestic/social agreements and commercial agreements in order to apply the precedents towards Jesse’s case; courts are generally reluctant to hold a domestic/social agreement between two parties as legally binding and there was an intention to create legal relations between spouses, re......(short extract)
To download the full answer, please Sign in or Register then make a payment or submit coursework.
Details: - Mark: 75% | Course: Contract Law | Year: 1st | Words: 2950 | References: Yes | Date written: January, 2014 | Date submitted: February 18, 2015 | Coursework ID: 906
