Answered: 1) John and Jane 2) Jim 3) The Tenants…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

John and Jane are partners who purchase and renovate houses. Five years ago, they purchased a house in Portsmouth, New Hampshire with all of their available cash. Having no money to make repairs they asked a contractor Jim to agree to do repairs on the house for a third of the profit when the house sold. The contractor repaired the house within a year. Jim has worked with John and Jane previously there was no written agreement. Once the house was repaired John and Jane rented the house. Recently without telling Jim, John and Jane entered into a purchase and sales agreement with their tenant for a $200,000 profit. Jim found out about the proposed sale and has filed a lawsuit against John and Jane for his share of the sale profits and rental proceeds. Jim also requested and received from the Court a pre-judgment attachment which prevents the sale of the house until the lawsuit is resolved. Due to the increased value of the real estate the Tenants are now suing John and Jane asking they specifically perform the purchase and sales agreement and transfer the property to them for the agreed upon purchase price. In your initial post please discuss which form of alternative dispute resolution you would recommend for the following parties and why: 1) John and Jane 2) Jim 3) The Tenants Include in your initial response what advantages and disadvantages are present if the parties engage in alternative dispute resolution?

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