Im Bibe Memorandum

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Legal Memorandum Georgia McCoy Kaplan University TO: Elaine Deering FROM: Georgia McCoy DATE: May 24, 2011 RE: IM Bibe Case Question Presented Did Owen Lotts commit fraud against IM Bibe by purchasing alcohol prior to the contract for the sale of the coffee shop? Brief Answer Yes. Mr. Lotts intentionally took advantage of Bibe’s state of intoxication by contributing more wine and persuading him to sign the agreement. Statement of Facts Last Friday, at approximately 12:30pm., insert space after 12:30 Mr. Bibe and three co-workers left the office to celebrate reaching their sales and marketing goal for last year. Mr. Bibe and two of the co-workers drank two bottles of wine with their lunch. The third co-worker, Owen Lotts, drank only water. While Mr. Bibe and the other co-workers drank wine, Mr. Lotts told Mr. Bibe that with his bonus money, Bibe could purchase his coffee shop for $300,000. Bibe declined. Lotts ordered them another bottle of wine, while he drank water, and wrote out on a piece of paper, “I, Owen Lotts, agree to sell, and I.M. Bibe agrees to purchase “The Coffee Shop” at 12 N. Main Street for the sum of $300,000.” Lotts signed the paper and gave it to Bibe who then said, “Oh, why not? I’ve always wanted a profitable side business,” and then signed it. Lotts paid the lunch and wine bill and the group left. By this time it was 3:00 p.m. and the group decided not to go back to the office. Bibe went home, about 20 miles away, and took a nap. Bibe awoke about 8:00 pm insert periods with a headache and immediately remembered the events that occurred during the afternoon. He thinks he does not want to purchase the coffee shop and is seeking legal help to see if the contract is binding. Applicable Statute Cal. Civ. Code § 38- “A person entirely without understanding has no power to make a contract of any kind, but the person is

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