Joe Advertised His House for Sale and Sam Came to Have

question 27

Essay

Joe advertised his house for sale and Sam came to have a look at it. While there, they haggled and struck a bargain that Sam would purchase the house for $400,000. They shook hands on the deal and Sam went home. That night, while thinking about it, Sam realized that the house wasn't exactly what he wanted, and so the next day he wrote a letter to Joe stating, "I'm writing this note to let you know that I've changed my mind with respect to the purchase of your home for $400,000, and since the contract isn't valid in any case, I don't expect to hear any more of the matter. Sincerely, Sam." Joe sued Sam for breach of contract. Discuss the legal position of the parties, including any defences available to Sam.

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Definitions:

Depreciable Asset

An asset that loses value over time due to wear and tear, decay, or decline in usefulness, and whose cost can be allocated over its useful life.

Patent Amortization

The gradual expense recognition over time of a patent, reflecting its decreasing value or utility over its legal lifespan.

Indirect Method

A way of calculating cash flows from operating activities by starting with net income and adjusting for non-cash transactions.

Depreciable Asset

An asset subject to depreciation, typically tangible fixed assets excluding land, reflecting its usage, wear, and tear over time.