If a Supermarket Chain Agrees to Buy Land for a Potential

question 6

Multiple Choice

If a supermarket chain agrees to buy land for a potential store 'subject to contract', and then spends time and money obtaining planning permission for the site, what can the supermarket chain claim if the seller then refuses to conclude the deal but, instead, sells the land at an enhanced value due to the planning permission, to a rival bidder?

• A) A claim in promissory estoppel for the land.
• B) A claim in specific performance to have the land transferred to it.
• C) A restitutionary claim for a quantum meruit for work done.
• D) A claim in proprietary estoppel for the land.

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Definitions:

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, typically associated with government bonds.

Risk-Free Asset

An investment that is expected to return its principal and interest without any loss or risk of default, typically represented by government bonds.

Strike Price

The Strike Price is the predetermined price at which the holder of an option can buy (in a call option) or sell (in a put option) the underlying asset.

Black-Scholes Option Pricing Model

A mathematical model used to price European call and put options by calculating the option's expected payoff at expiration.