USB145 - Assignment 2

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Queensland University of Technology *

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142

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Law

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May 17, 2024

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docx

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USB144 – Property Transactions The Task: You have been asked to provide advice to Elle Woods regarding her property dealings Parties involved in the scenario: 1. Elle Woods: The current owner of 24 James Street, Kenmore. 2. Pete Pickle: The current tenant of 24 James Street, Kenmore. 3. Jason Bourne: A property developer interested in purchasing the house. 4. Brad Pitt: A potential buyer who has entered an option contract with Jason Bourne to purchase the house. 5. Amanda Keating: the real estate agent engaged to sell the land. 6. Sandra Pickle: Purchases the house at auction. 24 James Street, Kenmore: The property at 24 James Street, Kenmore is a 5000 square. meter level site improved by a 100 sqm post war style house. This is a fictional property. The site is now zoned DC1 – District Centre and it’s use as a single dwelling is non- conforming use. The site has higher development potential and has an estimated value of $9,800,000. Scenario notes: - Elle has a strong emotional connection to the house, been in family for generations. - Elle inherited the property from grandfather 5 years ago, left in his will. - When she inherited the house, she was unable to live in it, she therefore rented it to a family friend Peter Pickle. - Peter Pickle was paying a nominal rent on the proviso that he maintains the property. - Around 6 months ago Elle promised Pete that she would offer the - property to him first for $1,500,000 before releasing the property to market. - Elle was then approached by Jason Bourne. He was interested in developing an innovative combined childcare and residential aged care centre on the site. - Jason was uncertain if this was an allowable use under the DC1 zone and was seeking an option over the site to address planning and other site suitability issues. - An agreement was reached between Elle and Jason that Jason would have an option to purchase the site for a period of 1 year at an agreed purchase price of $6,000,000. - The option contract was in writing. - Jason was verry happy that there was no payment for the option, so he didn’t have to arrange any external finances at the initial stage of the project. - Jason was also happy that he had the option to pull out of the agreement, but Elle did not. - The price he negotiated was well below the market value of the property. - Jason was approached by Brad Pitt who wanted to purchase the option from him. An agreement was reached between Jason and Brad for $1,000,000. Brad paid Jason a deposit

of $50,000 with the balance due in two months’ time. This agreement was unconditional and in writing. - Elle found out that the site was likely to be heavily contaminated with arsenic due to past use. - Elle had also discovered that if the site was not contaminated that it would be worth well above the deal she had struck with Jason Bourne. - Elle engaged Amanda Keating, a local real estate agent, to market and sell the site for her. - Amanda told Elle to keep this information to herself and not to share this news. Amanda was appointed as an exclusive agent and started to market the property for sale. - A for sale sign was erected on the site. - One of the first people to approach Amanda was Peter Pickle, who claimed that Elle had promised to sell the property to him. - Pete asked whether there were any issues with contamination on the property, but Amanda said nothing and redirected the conversation. - During the marketing campaign Amanda also became aware of the dealing on the property with Jason Bourne and said nothing of these issues to anyone including prospective purchasers. The property was sold at auction to Pete Pickle’s wife Sandra Pickle for $11,000,000. - The property is about to settle, and a caveat has appeared on title. - This caveat was initiated by Brad Pitt. Sandra Pickle (Peter Pickles Wife) has also discovered and has confirmation that the site is contaminated with arsenic.

Elle Woods and Her Legal Rights and Obligations in Property Dealings: Elle Woods is entangled in a complex legal situation involving multiple parties and property dealings. In the context of Queensland legislation, we will explore her legal rights and obligations in relation to each party involved: Pete Pickle, Jason Bourne, Brad Pitt, Amanda Keating, and Sandra Pickle. Pete Pickle: Elle Woods' promise to Pete Pickle is a pivotal element of this case. While the promise was made informally, it raises questions about whether it constitutes a legally binding contract. Queensland law recognizes verbal agreements as valid contracts, provided that certain elements are present. These elements typically include an offer, acceptance, intention to create legal relations, and consideration. In this case, Elle offered to sell the property to Pete for $1,500,000. The acceptance of this offer can be inferred from Pete's expectation that he would be given the first opportunity to purchase the property. There was also an intention to create legal relations, as this promise concerned a significant transaction. Furthermore, while there may not have been explicit consideration, Pete's maintenance of the property and potential reliance on Elle's promise could be argued as sufficient consideration. However, the main challenge lies in proving the existence and terms of this promise. Verbal contracts can be challenging to enforce, as they often lack a written record of the agreement. Pete would need to provide evidence, such as witnesses or correspondence, to substantiate the existence of the promise. If the promise is legally enforceable, Elle would be obligated to sell the property to Pete at the agreed-upon price. This could potentially hinder her other property dealings, including the option contract with Jason Bourne. Jason Bourne: Elle Woods entered into an option contract with Jason Bourne, granting him the exclusive right to purchase the property for $6,000,000 within a specified time frame. This option contract is a legally binding agreement, as it is in writing and contains the essential elements of a contract. The fact that Jason acquired the option for a price below the market value does not necessarily invalidate the contract. It reflects Elle's willingness to sell at that price and does not breach any legal provisions. However, this raises questions about whether Elle received adequate consideration for the option. The option contract's terms are crucial. It determines Elle's obligations and Jason's rights. Unless the contract allows for Elle's unilateral withdrawal, she is bound to honor the agreement. Elle's willingness to sell at a lower price may have been influenced by her emotional connection to the property, which has been in her family for generations. If Jason chooses to exercise his option, Elle must sell the property to him at the agreed-upon price, as per the terms of the contract. Elle cannot unilaterally pull out of the option agreement, as it is a legally binding document.

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