Steve orally agrees, at a family reunion picnic, to buy Bob's farm for $250,000, and all the terms of the agreement are settled. Bob agrees to let Steve come onto the property before the closing date so that Steve can renovate the farmhouse kitchen and build a new barn before he takes over formally. By the time Bob tells Steve that he has changed his mind and that he will not be completing the transaction on the closing date, Steve has spent $40,000 on the property. Under the Statute of Frauds, since their agreement was not evidenced in writing, Steve cannot enforce it in court, and cannot recover the $40,000. Steve can use the doctrine of promissory estoppel to force Bob to complete the transaction and give him the farm in exchange for $250,000. Because of the Statute of Frauds, Steve cannot get the farm, but he can sue Bob for the tort of deceit and recover the $40,000. Steve can ask a court to order specific performance of the contract because he has spent a lot of

Steve orally agrees, at a family reunion picnic, to buy Bob's farm for $250,000, and all the terms of the agreement are settled. Bob agrees to let Steve come onto the property before the closing date so that Steve can renovate the farmhouse kitchen and build a new barn before he takes over formally. By the time Bob tells Steve that he has changed his mind and that he will not be completing the transaction on the closing date, Steve has spent $40,000 on the property. Under the Statute of Frauds, since their agreement was not evidenced in writing, Steve cannot enforce it in court, and cannot recover the $40,000. Steve can use the doctrine of promissory estoppel to force Bob to complete the transaction and give him the farm in exchange for $250,000. Because of the Statute of Frauds, Steve cannot get the farm, but he can sue Bob for the tort of deceit and recover the $40,000. Steve can ask a court to order specific performance of the contract because he has spent a lot of

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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