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MMLU / A developer leased with an option a 250-acre property from a widow who retained…

Problem

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question

A developer leased with an option a 250-acre property from a widow who retained the right to live in a farmhouse on the land until her death. At her death, developer had a two-year option to buy for 100,000.Shortlyafterherdeath,thefarmhousewasdestroyedbyafire.Thedevelopersentaletteralmosttwoyearslaterinwhichitexercisedtheoption.Theestaterefusedtosell.Thedeveloperbroughtsuitontheoptionandforthefirsttimeclaimeda100,000. Shortly after her death, the farmhouse was destroyed by a fire. The developer sent a letter almost two years later in which it exercised the option. The estate refused to sell. The developer brought suit on the option and for the first time claimed a 20,000 credit for destruction of the farmhouse. The court in equity granted the developer's claim and ordered a sale for $80,000. The estate of the widow appealed. Will the appellate court affirm the equity court's ruling and order the $20,000 credit to the developer for the loss of the house?
Plain-text mathematical notation (without MathML)
A developer leased with an option a 250-acre property from a widow who retained the right to live in a farmhouse on the land until her death. At her death, developer had a two-year option to buy for 100,000.Shortlyafterherdeath,thefarmhousewasdestroyedbyafire.Thedevelopersentaletteralmosttwoyearslaterinwhichitexercisedtheoption.Theestaterefusedtosell.Thedeveloperbroughtsuitontheoptionandforthefirsttimeclaimeda20,000 credit for destruction of the farmhouse. The court in equity granted the developer's claim and ordered a sale for $80,000. The estate of the widow appealed. Will the appellate court affirm the equity court's ruling and order the $20,000 credit to the developer for the loss of the house?
Original LaTeX notation
A developer leased with an option a 250-acre property from a widow who retained the right to live in a farmhouse on the land until her death. At her death, developer had a two-year option to buy for $100,000. Shortly after her death, the farmhouse was destroyed by a fire. The developer sent a letter almost two years later in which it exercised the option. The estate refused to sell. The developer brought suit on the option and for the first time claimed a $20,000 credit for destruction of the farmhouse. The court in equity granted the developer's claim and ordered a sale for $80,000. The estate of the widow appealed. Will the appellate court affirm the equity court's ruling and order the $20,000 credit to the developer for the loss of the house?

choices

  1. Yes, under equitable conversion the seller is trustee for the buyer and is responsible for the risk of loss.
  2. Yes, the developer had an equitable ownership interest in the property when it exercised its option and the seller must compensate for loss to that interest.
  3. No, the buyer acquired no equitable interest in the land or buildings until it exercised the option right before it expired; the court will order the sale at the full price without credit.
  4. No, the buyer gets no credit for the house because it was renting the land at the time of the fire and it is responsible for waste.

subject

professional_law

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Source and history

task_id
5b534ee2-f70e-5f3a-aa1d-80fcc4777b90
task_key
all--test--5b534ee2-f70e-5f3a-aa1d-80fcc4777b90
task_revision_id
1
config / split
all / test

Official source

initial import