Business Law
Some time ago, dairy farmers owned large tracts of land in south Tempe, Arizona. The farmers used the land for grazing animals. Economic growth in this suburb of Phoenix was limited because of the state′s inability at the time to attract large businesses to the area for relocation or location of new facilities. In 1973, three farmers who owned adjoining parcels of land in the south Tempe area were approached by a local real estate agent with an offer for the purchase of their property. The amount of the offer was approximately 10% above the property′s appraised value. The three farmers discussed the offer and concluded with their need to retire, it was best to accept the offer and sell the land. All three signed contracts for the sale of their land. [unique_solution]After the contracts were entered into but before the transactions had closed, the three farmers learned that the land was being purchased by a real estate development firm from southern California. The development firm had planned, and would be presenting to the Tempe City Council, a residential community, The Lakes. The Lakes would consist of upper-end homes in a community laced with parks, lakes, and ponds, with each house in the developed area backing up to its own dock and water recreation. The development firm had begun the project because it had learned of the plans of American Express, Rubbermaid, and Dial to locate major facilities in the Phoenix area. The three farmers objected to the sale of their land when they learned the identity of the buyer. ″If we had known who was coming in here and why, we never would have sold for such a low price.″ Answer all four of the following questions: 1. Were the farmers contracts binding? 2. Is it ethical to use the strategy of an undisclosed principal? 3. What is the role of an agent in a situation in which the third party is making a decision not as beneficial to him or her as it could or should be? 4. Can the agent say anything to the third party?