1.Jane hires John to sell her motorcycle. They enter into a 30 day contract. Ten
ID: 457472 • Letter: 1
Question
1.Jane hires John to sell her motorcycle. They enter into a 30 day contract. Ten days into the contract John has found a prospective buyer and has negotiated a price and contract. Jane decides to take the motorcycle on one last joy ride and ends up crashing and totaling the motorcycle. Will Jane have to pay John’s commission on the lost sale?
2.Steven has contracted to be Alfred's agent for the sale of Alfred's home. The contract provides that the duration of this agency is 90 days. Within the third week, Steven has found a potential buyer and is involved in negotiations. Within the fourth week, Alfred notifies Steven that he is terminating the arrangement, but Steven proceeds to negotiate a sale with the potential buyer. Did Alfred have the right to terminate the agency? Were Steven's actions legally permissible? If so, what options does Steven have?
Explanation / Answer
In the 1st case, Jane hires John to sell her motorcycle. They enter into 30 day contract. With 10 days, John able to find prospective buyer and starts negotiating the contract.
Jane decides to take joy ride and crashes. This is Jane’s own decision and nothing to with the contract. Option 1, as per the contract, Jane needs to pay the commission John as per the negotiated price. Since the John is unable to sell because of Jane’s action.
Option 2, Renegotiate with John about the commission and make payment as per the re negotiated price or compensate the efforts of John.
In the 2nd case, since signed agreement is 90 days, Steven able to sell with 3 weeks time.
Since the owner is Alfred and Steven cannot proceed to negotiate with potential buyer without the consent of Alfred. Alfred has right to terminate the agency and need to compensate the agency. Steven’s actions are legally not permissible. Steven can renegotiate the compensation for cancellation of contract.
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