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Contracts Keyed to Dawson
LaFazia v. Howe
Facts
The Defendants at first doubted the profitability of the business. The Plaintiffs showed the Defendants their tax returns, but said that since they always paid in cash and didn’t keep good records, the tax returns did not reflect the true figures of the business. They also showed the Defendants their fancy cars and homes, and pointed out that Gasrow supported a family with three children. Finally, the Defendants decided to purchase the deli, and were represented by their son, an attorney. Included in the Memorandum of Sale were merger and disclaimer clauses that they relied on their own judgment as to the prospective profit of the business; that no representations or warranties were made by the Seller; and that the agreement constituted the entire agreement. After purchasing the deli, Defendants realized that they “had been taken,” as the deli was not as profitable as they had hoped. They eventually sold the business at a loss and had $10,000 outstanding on their promissory note to the Plaintiffs. The Plaintiffs sued, and Defendants counterclaimed that Plaintiffs had made specific misrepresentations to induce them to enter into the contract. The trial judge granted summary judgment to the Plaintiffs, and Defendants appealed
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