Question 1: Blake, who had been diagnosed with Alzheimer's disease, sold and conveyed two acres of land to Khron, who paid $14,000. At the time of the sale and conveyance, Blake appeared to be competent and Khron had no knowledge of Blake's illness. One year later, Blake died. During the prior year, Blake had spent the $14,000 received from Khron. The executrix of Blake's estate sued Khron to set aside the deed and recover the land conveyed to Khron. The executrix made no offer to pay $14,000 to Khron. Will the executrix succeed? Suppose it was shown that Khron knew about Blake's condition at the time of the sale and conveyance of the land. Would this affect your answer?

Question 2: Walters, a business owner, filed tax returns for 2001, 2002, and 2003 using the cash basis. In 2004, Walters hired Erlich, a CPA, to prepare his income tax for 2004 using the accrual basis. While preparing the 2004 return, Erlich examined the prior years' returns. Based on Erlich's suggestions, Erlich prepared revised returns for the prior years, and Walters submitted these to the Internal Revenue Service (IRS), claiming an $18,000 refund. Instead of receiving the refund, the IRS claimed Walters owed $134,000 in unpaid taxes and fines. Erlich told Walters that the IRS was mistaken and that he could clean up the simple problem for a fee of $1000.

After granting several extensions, the IRS notified Walters that Monday, October 5, 2008 was the deadline for filing a protest to the proposed assessment. On Saturday, October 3, Erlich called Walters to his office to sign the protest. When Walters arrived, Erlich produced a written contract with a fee agreement whereby Erlich was to receive $1000 plus 8 percent of any monies saved on the assessment. When Walters refused to sign the new fee agreement, Erlich told him that the protest had to be in the mail that afternoon to reach the IRS by Monday and that if the protest were not filed on time Walters would be liable for the $134,000 plus additional fines that had accrued since 2005. Walters signed the fee agreement, and the protest was filed on time. After reviewing the protest, the IRS reduced the assessment to $21,000. Erlich sent Walters a bill for $10,040. Walters sued to have the new fee arrangement rescinded. What legal theory will Walters argue? Who wins? How much does Walters owe Erlich for the service of preparing the protest?