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Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
Edition 19ISBN: 978-1305654921Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
Edition 19ISBN: 978-1305654921 Exercise 12
James Carpenter contracted with Austin Estates LP to buy property in Travis County. Unable to raise the funds, he contacted Sandra McBeth and her husband, James Reynolds. Carpenter told them disputes had arisen with the city regarding water and wastewater services but misrepresented the status of discussions as well as the city's willingness to negotiate. McBeth, Reynolds, and Carpenter executed a written agreement stating that McBeth and Reynolds would supply the earnest money to hold the property purchase option, try to obtain a loan, and enter into a limited partnership with Carpenter to buy the property. They formed a limited partnership, StoneLake Ranch, L.P., with Carpenter as president of the general partner. McBeth and Reynolds deposited $300,000 in escrow for the land purchase and an additional $500,000 in $100,000 increments to obtain extensions on the purchase deadline. Unable to complete the sale, and without notifying McBeth or Reynolds, Carpenter had the money in escrow disbursed to Austin Estates. Subsequently, he secured other investors, and they purchased the property through an entity with which Carpenter was affiliated. The property was sold for a profit of $140,000. In the ensuing lawsuit, Carpenter argued that he had no duty to disclose information to McBeth and Reynolds. Did he?
Explanation
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JC had the obligation to disclose the en...
Cengage Advantage Books: Law for Business 19th Edition by John Ashcroft,Katherine Ashcroft,Martha Patterson
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