Business Law Questions Regarding Lease Agreements & Financial Statements...HELP!!?

[luther]

1. Real Estate Investments, Inc., owns and manages an office building. Secure Insurance Company agrees to lease the building for five years. Under the lease, Secure is obligated to pay all of the utility costs. Two years into the term, Secure asks Real Estate to modify the lease to provide that the utility costs be split equally between them. Real Estate agrees, but later decides it does not want to share the costs and refuses to pay. Is the landlord bound to its agreement to share the utility costs? Why or why not?

2. Alpha Investments, Inc., offers to buy Beta Computer Corporation. On May 1, Beta gives Alpha copies of Beta's financial statements for the previous year. The statements show an inventory of $1 million. On May 15, Beta discovers that the previous year's inventory is overstated by $500,000, but does not inform Alpha. On June 1, Alpha, relying on the financial statements, buys Beta. On June 10, Alpha discovers the inventory overstatement. Can Alpha succeed in a suit against Beta for fraud?

[geol19]

1. The law generally states that a lease of a term greater than one year must be put in writing in order for it to be effective. It is also states that any changes and modifications to a lease agreement must also be put in writing before they are enforced. It would be very unusual for an oral agreement to override a written agreement.

2. Absolutely Alpha can sue for rescission of the contract and damages because of misrepresentation. Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.

[hampton83]

yea