Johnson wants to sell his farm to Davis for $225.000. Johnson tells Davis that he believes the value the farm is far more than that, and it will only go up, way up. Relying upon these statements, Davis buys the farm from Johnson for $225,000. However, Davis’s cousin Bart, who is a real estate expert, told Davis that he overpaid for the farm. On discovering this, Davis decided to sue Johnson for fraud in the inducement.
A) Based on these facts, does Davis have a cause of action for fraud in the inducement? Please discuss all relevant issues and please be specific.
B) Assume that Davis won the lawsuit. After losing in court, Johnson ran out of money and, consequently, became very depressed. Subsequently, Johnson decided to become a cyclist in hope that cycling could help him turn his life around. Fairly recently, Johnson participated in a bicycle race conducted by the US Cycling Federation. Unfortunately, a car hit Johnson during the race. He claims that employees of the Federation improperly allowed the car onto the course, as the car "came out of nowhere." The Federation claims that it cannot be held liable to Johnson because Johnson signed a release exculpating the Federation from responsibility for any personal injury resulting from his participation in the race. Based on these facts, who wins and why? Please discuss all relevant issues.
C) Johnson was also the principal shareholder in Matthew Corporation along with Wilson. The corporation was located in the city of Jonesville, Wisconsin. This corporation was engaged in the business of manufacturing paper novelties, which were sold over a wide area in the Midwest. The corporation was also in the business of binding books. Johnson decided he did not want to deal with people anymore (he even printed T- Shirts "do I look like peoples person"), so he purchased Wilson's shares of the Matthew Corporation. In consideration thereof, Wilson agreed that for a period of two years he would not (a) manufacture or sell in Wisconsin and Illinois any paper novelties of any kind that would compete with those sold by the Matthew Corporation or (b) engage in the bookbinding business in the city of Jonesville. Wilson is now regretting signing this agreement, and is asking you to make an argument that the non-compete agreement should not be enforceable. What argument(s) could you make in Wilson’s favor?
