11. On May I, Peters, a concert producer, executed two contracts. The first contract was with Selena, a world-renowned singer, which provided that Selena was to perform a concert at Thomas's theater in Manhattan on July 4 for a fee of $200.000. The second contract was with Thomas, the owner of a theater in Manhattan, under which Peters rented Thomas's theater in Manhattan for the July 4 concert for a rental fee of $20,000. Peters sold out in advance all of the tickets for the concert and would have made a net profit on the concert of $I 00,000, after deducting the rental cost of the theater, Selena's fee and $20,000 for advertising expenses. On July 2, Thomas' theater burned down due to lightning. Peters immediately notified Selena, canceled
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granted Belle an additional 6 weeks to raise the money and Belle agreed, but notified her that it would grant no further extensions. At the end of 6 weeks, Belle had still been unable to raise the money, and Nissan Corp. notified her that it was cancelling the contract. A month later, Nissan Corp. sold the warehouse to Chin for $550,000.
(c) Is Belle now entitled to recover her $50,000 down payment? Explain.
Answer: Yes, she is entitled to recover her $50,000 down payment because the contract had no condition and got cancelled, each party should be discharged of its obligations. Belle’s obligation was to pay for the surplus warehouse. Because the contract is cancelled, she should not let the other party keep the down payment. In addition, you cannot get something for nothing.
Assume that when Belle originally negotiated for the purchase, Nissan Corp. had little confidence in Belle's ability to raise the money. Accordingly, the parties agreed to a clause in the contract stating, "Time is of the essence in this contract." At the closing Nissan Corp was unable to tender clear title to Belle because the day before the State Tax Department had notified Nissan that an unpaid franchise tax constituted a lien on the warehouse. Nissan Corp. requested a delay of 3 days to pay the tax and satisfy the lien. Belle, who had reconsidered her bargain, refused any extension, tendered her certified check for the balance, and demanded that Nissan deliver clear title. When Nissan Corp. was unable to comply, Belle said she was cancelling the
granted Belle an additional 6 weeks to raise the money and Belle agreed, but notified her that it would grant no further extensions. At the end of 6 weeks, Belle had still been unable to raise the money, and Nissan Corp. notified her that it was cancelling the contract. A month later, Nissan Corp. sold the warehouse to Chin for $550,000.
(c) Is Belle now entitled to recover her $50,000 down payment? Explain.
Answer: Yes, she is entitled to recover her $50,000 down payment because the contract had no condition and got cancelled, each party should be discharged of its obligations. Belle’s obligation was to pay for the surplus warehouse. Because the contract is cancelled, she should not let the other party keep the down payment. In addition, you cannot get something for nothing.
Assume that when Belle originally negotiated for the purchase, Nissan Corp. had little confidence in Belle's ability to raise the money. Accordingly, the parties agreed to a clause in the contract stating, "Time is of the essence in this contract." At the closing Nissan Corp was unable to tender clear title to Belle because the day before the State Tax Department had notified Nissan that an unpaid franchise tax constituted a lien on the warehouse. Nissan Corp. requested a delay of 3 days to pay the tax and satisfy the lien. Belle, who had reconsidered her bargain, refused any extension, tendered her certified check for the balance, and demanded that Nissan deliver clear title. When Nissan Corp. was unable to comply, Belle said she was cancelling the