Dave is a movie producer who entered into a written agreemen…
Dave is a movie producer who entered into a written agreement in January to sell his 10-acre estate property to Paul for $20 million. The sale was scheduled to close by March 31st. Upon receipt of Paul’s down payment of $2 million Dave vacated the estate on January 5th and went to Australia to finish up a movie, production of which had shut down due to cost overruns. Dave used the $2 million to finish the movie and sell it to eFlix, a streaming service, at the end of February. The eFlix deal would net a profit to Dave of $75 million, due and payable to Dave on June 1st from eFlix. When Dave vacated the estate on January 5th, he notified Paul that the insurance, security and caretaking contracts on the estate had been cancelled. Paul procured insurance on the property for $100,000 and engaged a management company for $250,000 to maintain security and caretaking of the property through the end of the year. On March 30th Paul deposited the balance of the purchase price ($18 million) in escrow and inquired of Dave as to possession of the property. Dave replied that he had decided not to sell, and that he would be moving back into the estate right away. The escrow was cancelled and $18 million was refunded to Paul. Paul demanded return of the $2 million down payment and reimbursement of the $100,000 insurance premium and the $250,000 security and caretaking expenses. Dave told Paul that he would “be able to make Paul whole in early July.” Assume that Paul can state a prima facie case for breach/repudiation of contract. To what legal remedies, if any, is Paul entitled? Discuss fully.
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