Smith and Roberson’s Business Law
Smith and Roberson’s Business Law
17th Edition
ISBN: 9781337094757
Author: Richard A. Mann, Barry S. Roberts
Publisher: Cengage Learning
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Chapter 10, Problem 13Q
Summary Introduction

To discuss: The decision for person W.

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On May 1, Melforth Realty Company offered to sell Greenacre to Dallas, Inc., for $1 million. The offer was made by a letter sent by overnight delivery and stated that the offer would expire on May 15. Dallas decided to purchase the property and sent a letter by registered first-class mail to Melforth on May 10, accepting the offer. Due to unexplained delays in the postal service, Melforth did not receive the letter until May 22. Melforth wishes to sell Greenacre to another buyer, who is offering $1.2 million for the tract of land. Has a contract resulted between Melforth and Dallas?
Omar, owner of a copying machine leased it to Lisa at a rental of P4,000.00 a month for a period of one year with option on the part of Lisa to buy the copying machine at the end of one year for P80,000.00. to be paid by applying the rentals, so that Lisa needs only to pay P32,000.00.Lisa failed to pay the rentals for the 4th, 5th and 6th months so that Omar terminated the lease and repossessed the copying machine, then sued Lisa for the unpaid rentals of three months or P12,000.00.Is Omar’s suit legally tenable? Explain.
In early 2020, James, Inc. announced its intention to construct a manufacturing facility in the Shenandoah Valley. To persuade James, Inc. to locate the facility in Burton County, the county government contributed a six-acre tract of undeveloped county land to the corporation. The appraised FMV of the land at the date of the contribution was $280,000. Soon after accepting the contribution, James, Inc. paid $3,300 to an attorney to do a title search to make sure that it had uncontested ownership of the land. James also paid $12,900 for a survey and site map of the six acres and $1,360 for two water wells drilled on the land. Did James recognize income because of the receipt of the land? What is the proper tax treatment of James’ $17,560 expenditure with respect to the land? In 2021, James’s attorney discovered that the estate of Elsa Reynolds claimed title to the six acres and was preparing to file suit in Virginia state court to regain ownership and possession. The attorney advised…
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