After midterm cases
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Toronto Metropolitan University *
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122
Subject
Law
Date
Feb 20, 2024
Type
Pages
10
Uploaded by CaptainMorningEmu17
1)
Is this a GP (GENERAL PARTNERSHIP) or not?
Gorski and Durocher were chartered, accountants. Gorski ran a business giving tax advice and
providing accounting services, which he operated out of the premises that he owned. In 1989,
he entered into an agreement with Durocher under which Durocher agreed to review financial
statements and prepare tax returns for Groscki’s clients for $20 an hour plus $913 a month.
They agreed that Durocher would not be classified as an employee but as an independent
contractor. That allowed Durocher to deduct certain expenses in connection with his work
against his income for tax purposes. Over time, Durocher assumed more responsibility for
managing the business and supervising the staff. Groscki increasingly worked on other business
ventures. In 1993, the name on the business letterhead and its sign was changed to say
“Groscki and Durocher.” Nevertheless, Durocher was never given signing authority for the
business bank account and did not have access to the financial records of the business. In
1993, Durocher loaned $25 000 to Groscki for the business. In 1994, Durocher terminated his
relationship with Groscki. Durocher argued that some of the firm’s business belonged to him
because he and Groscki were partners.
Durocher - GP
Groscki - NOT GP
-
He was involved in management
-
Letterhead and sign says both names
-
25k loan - contribution
-
No formal regmt to become a GP
-
‘VIEW TO A PROFIT’
-
D did not have access to all business
record
-
D did not have signing authority
-
D did not have any risk of losses
-
G owned building, equip
-
D was paid $
-
D did not share in profits since he got
his money no matter what as he was
paid to do his job
-
24k loan
→ not a GP, Groscki wins since durocher wasnt part of what a GP is or its characteristics
*Carlton case study (he incorporated many companies, wakowski gets hurt
2)
Oren & Gena - GP
Oren and Jenna carry on their business of buying and selling real estate as a partnership. Each
is entitled to 50 percent of the profits from the business. Oren bought and sold a parcel of real
estate in the name of the partnership without Jenna’s permission or knowledge. Oren took for
himself the full amount of the profits from the sale ($100 000). Is there a legal basis for Jenna to
claim compensation from Oren? If so, how much is she entitled to receive?
→
since its a GP, profit should be divided equally among both partners
3) For over five years, Rick was the CEO of JB Guitars Inc, a corporation operating a chain of
retail guitar stores. He had gained tremendous practical experience and decided to start his own
business selling guitars. When he first started working at JB Guitars, Rick agreed not to carry on
a competing business for two years after he ended his employment with the corporation. To
avoid breaching that contract, Rick incorporated a corporation named Generation X Guitars Inc
to carry on the business. He is the sole shareholder, director, and president. JB Guitars claims
that the new corporation is just a way of getting around the non-competition agreement and has
sued for a court order prohibiting Generation X Guitars from carrying on a business competing
with JB Guitars. Will JB Guitars be successful?
→ if rick had done this himself, he would violate contract
→ Used gen x to not violate contract
→ even though its a separate corporation, rick would violate 2 year non competition contract,
resulting in him being probiting from competing, since corporation was used to commit serious
wrongdoing
→ there would be no difference whether or not
→ He benefited from this
→ If Rick was a iminoirt shareholder, would it be the same?
Its app to happen?
→ its a GP, 2 people on carrying on business together, talking about profits, marketing,etc
→ if partner is violating laws, your responsible to, so she should be concerned
→ to fix this and cap on it, they should terminate partnership, if he allows to continue, this stuff
will continue
3)
Its App to happen
Tim and Elsa have taken some classes together at Ryerson University. During one of their study
sessions, they came up with a terrific idea for a new app. They decided to work together to
develop the app. Elsa agreed to take the lead on the programming for the app, while Tim took
responsibility for the markeCng. Aside from agreeing to this division of labour and agreeing to
split any profits 50-50, Tim and Elsa did not write anything about their arrangement down.After
several months of hard work, they were close to being able to launch their app. Shortly before
the launch, however, Elsa learned that Tim had cut some corners on the markeCng work. She
became concerned that some of the copy used to promote the app might violate copyright.
Furthermore, some of the markeCng techniques adopted by Tim seemed like false or
misleading adverCsing. Elsa became concerned that the techniques used for markeCng and the
promotional materials for the app might trigger liability for her.
1. Could Elsa be liable for Tim’s actions? What legal issue is central to determining whether or
not Elsa could be held liable for Tim’s actions? (Assume, of course, that Tim really is liable.)
2. Explain your answer, taking care to state the law and apply the law to these facts.
3. Identify two risk management strategies that Elsa could have or could now use to address the
risk that she may become liable for Tim’s actions. Explain how these strategies work
4)
Groundhog world
Bill once had fame and fortune as a result of a role he played in a movie about groundhogs. Bill
has now fallen on hard times. So Bill has decided to try to profit on his past glory by developing
a theme park based loosely on the movie. He plans to call his new theme park “Groundhog
World”. Bill needed money to launch Groundhog World, so he approached his sister, Anna, for
help. Anna agreed to give Bill $3million to fund Groundhog World. Bill agreed that he would pay
Anna back over ten years. Instead of interest, Anna agreed that she would accept ten percent of
the profits of Groundhog World, plus the payment of the principal amount owing. Anna and Bill
agreed that Bill would run the day to day operations of Groundhog World since Anna already
had a successful career as an investment banker. Anna would defer to Bill in terms of
operational decisions on a day to day basis. However, Anna was not content to simply give Bill
so much money. She demanded, and Bill agreed, that she be able to view the books and
finances of Groundhog World whenever she wanted. Anna and Bill also agreed that they would
meet monthly to discuss the operations of Groundhog World. Anna, being quite astute, also
insisted that her name never appear on any contracts, invoices, letterhead, or other materials
related to Groundhog World. To the outside world, Groundhog World was represented as “Bill,
doing business as Groundhog World”. The issue of the nature of the relaConship between Bill
and Anna has recently come under scruCny. Mila was a guest at the park when a Groundhog
World employee negligently ran her over with a golf cart. It is clear that Groundhog World is
vicariously liable for its employee’s negligence. The real quesCon is whether Mila can sue only
Bill, on the argument that Bill is operaCng the park as a sole proprietorship, or whether Mila can
sue Bill and Anna, on the argument that they are in a partnership with each other. Given Anna’s
wealth, Mila would prefer to characterize their relaConship as a partnership so that she can
access Anna’s assets.
1. What test will the courts apply to determine if Bill and Anna are in a partnership? (In other
words, articulate the legal test for a partnership’s existence.)
2. Make an argument in favour of the position that Bill and Anna are not partners.
3. Make an argument in favour of the position that Bill and Anna are partners.
4. Suppose that before any accidents occurred at Groundhog World, Anna decided that it would
be best if she and Bill formed a corporation that would own Groundhog World. She explained to
Bill that she was concerned about attracting personal liability if they were found to be in a
partnership. Anna is very wealthy and wants to shield her assets. Explain why purchasing
shares in a corporation and being a shareholder offer Anna more protection than being a partner
in a partnership.
5)
The bike
See this awesome bike? It’s a 2013 Specialized Dolce Elite. Suppose that YOU own this bike.
You’re planning to upgrade to the 2015 model, so you plan to sell this bike. We’re going to work
through some different scenarios about the bike. Suppose that an acquaintance has agreed to
purchase your bike. The two of you have agreed to a price ($800) and to a delivery date (next
Wednesday). You have shaken on the deal. But you never wrote it down. Does that matter?
Are oral agreements valid contracts? Or do all contracts have to be in writing?
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6)
Fobasco V Cogan (1990)
7)
The bike, 2
Suppose you post the following adverDsement on Kijiji: “For Sale: one sweet ride. 2013
Specialized Dolce Elite. Excellent condiDon; well-maintained. $800.”
• Now suppose that three people texted you (or phoned or emailed you) at exactly the same
time. Do you have one contract? Three contracts? How much trouble are you in?
→ As it turns out, you are in the driver’s seat (or saddle, as the case may be). Your Kijiji ad is
an invitation to treat. And those three messages to you are all offers. You are the
offeree and you have the power of acceptance
8)
Dickinson v dodds (1876) p.167
9)
The bike, 3a
Suppose you tell Angelique that you will sell her your bike for $800. Now suppose
Angelique tells you, “No thanks! That’s too much money!” But overnight, Angelique changes her
mind. So she calls you the very next day and says, “Hey, great news. I’ve changed my mind! I’ll
take that bike!” Do you have a contract?
10) The bike, 3b
An ethical dimension: suppose that Angelique initially tells you, “No, I don’t want the bike.” But
overnight, her own bike is stolen. So the next day, she calls you and says, “I’ve changed my
mind. I would like to buy that bike. My own bike was just stolen.” You seize the moment and say,
“Oh? Well, the price is now $1200.” Have you acted ethically? Use one of the four types of
ethically reasoning to discuss your actions.
11) The bike, 3c
Suppose that you offer to sell your bike to Efrem for $800. Efrem thinks about it and then says,
“Ok. I’ll buy your bike for $800. Of course, at that price, I expect you to throw in your Garmin
biking computer and a bike pump.” Are you now legally obligated to transfer your bike, your
Garmin and a bike pump to Efrem for $800? Why or why not? Explain your answer. 30
12) Ethical perspective: ethics vs law, p 187
13) Truth is stranger than fiction
The Scene: 1995 National League Championship Series, Game 6, Houston Astros v. St Louis
Cardinals
•Astros owner Drayton McLane wandered into the change room, told Astros Ace pitcher Roy
Oswalt "You win this game tonight, and I'll buy you a Caterpillar D6 (a bulldozer).“
•Roy did win that game.
•Now, the Astros made good on that promise (and had to amend Roy’s contract to do so). But
did they have to do so?
14) Case study one, pg 232
• (a) “This floor wax is the best made anywhere in the world”
• (b) “I personally truly believe this floor wax is the best made anywhere in the world.”
• (c ) “Studies have shown that this floor wax is the best made anywhere in the world.”
• (d) if, after trying this floor wax, you don’t agree that it is unquestionably the best made
anywhere in the world, I’ll come and polish your floors myself for a month.”
• (e) if, after trying this floor wax, you don’t agree that it is unquestionably the best made
anywhere in the world, I’ll eat my hat.”
15) The extreme biker
• Ahmad lives in Toronto and likes cycling. He’s on a trip to Vancouver and wants to try
extreme mountain biking. He’s never done this before.
• Mark has been mountain biking in British Columbia for 15 years and operates a business
offering tours of extreme bike trails.
• Ahmad contacted Mark and asked him “How difficult are the trails?”
• Mark said, “ I don’t find them difficult myself”.
• Ahmad signed a contract for the excursion and paid for it.
After a short time on the trail, Ahmad was exhausted. He never imagined it would be that
difficult. Ahmad couldn’t continue and got off his bike and walked the remainder of the trail.
Ahmad wants his money back. He feels Mark misrepresented the difficulty of the trials in order
to induce him to enter into the contract.
Do you think Ahmad has a good argument?
16) 9.2, Vancouver business school
Tuition Fees: $7000* for the 15-month program (payable in four installments of $1750)
• * Student activity fees are also assessed. Fees for the year are subject to adjustment and the
university reserves the right to change fees without notice. Please see the attached information
sheet and fees section of the university calendar.
Develop an interpretation of the clause favoring your client. Support your position using one of
the approaches to interpretation.
Students
School
Adjustment is a small alteration (5-10%)
17) Ticket contracts: 9.3 snow valley, p 222
• Issue: Is the exclusion clause enforceable against Malayko?
• Legal Test: 4 Requirements of Enforceability
-
Term must be clear and unambiguous
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Reasonable notice to affected party
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Assent by affected party
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Usually not enforced if unconscionable
• Application:
-
Multiple notices in the park and on the ticket in bright
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He didn't sign anything, but you can agree that by purchasing and entering into the
resort, using the facilities, are consistent to him agreeing with the terms and conditions
-
18) Jurisdiction clause
“The courts of [Ontario] will have exclusive jurisdiction to adjudicate any dispute arising
under or in connection with this Agreement.”
"The parties submit all their disputes arising out of or in connection with this Agreement to the
exclusive jurisdiction of the Courts of [the province of Ontario ]".
19) Ontario Cruises Inc - page 210
During the summer months, Ontario Cruises Inc (OCI) operates pleasure cruises around Lake
Ontario, one of the Great Lakes. The ticket is $50. Customers sign a waiver before purchasing a
ticket. The relevant part of that document states, “The passenger accepts all physical and legal
risks of loss or injury. Neither Ontario Cruises Inc nor its employees shall be responsible or
liable for any loss or injury suffered by any passenger that is caused by the negligence of
Ontario Cruises Inc or its employees.” Ms. Rose Adler purchased a ticket, read the “Waiver of
Liability,” and signed the document. The cruise was to be conducted aboard The Spirit of
Ontario, which is one of OCI’s ships. The boat sat alongside a pier that was owned and
operated by the provincial government. Wal- lis Boatswain, a college student, was working
during the summer for the province. It was his job to make sure that individuals—like Rose
Adler—safely got on and off boats that were next to the pier. Unfortunately, when Rose was
about to board The Spirit of Ontario, Wallis’s attention was focused entirely on an attractive
young woman who was walking by. As a result of his carelessness, Rose stumbled, hit her
head, and fell into the water. She suffered serious injuries. Rose has now sued OCI and Wallis
Boatswain. If the company did anything wrong, it is protected by the “Waiver of Liability.” Wallis
argues that he is protected by the same document. Is that correct? Explain your answer.
-
Company is covered
-
Walis is not covered since he's employed the government, not an employee of this
company (OCI)
-
“Neither Ontario Cruises Inc nor its employees shall be responsible or liable for
any loss or injury suffered by any passenger that is caused by the negligence of
Ontario Cruises Inc or its employees”
20) Business decision 9.1
21) Erin’s chocolate cranberries and her car
• Erin is almost 17 years old
• She moves out of her parent’s home
• She starts a business and requires a car
• She buys a used car for $15,000
• She paid $5000 deposit and balance payable in 12 monthly payments
• After 3 months the bearings burnt out
• Erin advises car dealer she was electing to avoid the contract
Can Erin avoid her contract
→ contract with minor → not employment/necessity → voidable → VOID
→ she has to give back the car, but she doesn't get her payments back
→ no remedy since the contract is now voidable
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22) Michael and his credit card (#4)
• Michael has a history of psychiatric issues
• Michael applied for a credit card at his local bank. He filled out the forms and submitted them.
• Shortly thereafter Michael received a credit card
• Michaels incurred thousands of dollars of credit card debt
• Michael does not make payments
• Credit card company commences legal action against Michael
• Michael’s lawyer argues that credit card agreement is voidable. There is medical evidence that
Michael was MI at time of credit card agreement.
Will the Bank succeed in its legal action against Michael?
23) Intoxicated Elwood & his piglets
• Elwood is a pig farmer
• After a July weekend of heavy drinking he staggered into Pork Bellies of America (“PBA”) and
offered to sell all his piglets in October
• Hank of PBA saw that Elwood was extremely drunk
• Hank entered into a fair contract with Elwood
• Hank and Elwood go for lunch
• Next day and over the next 2 weeks Hank reminds Elwood of the contract
• In Sept. price of pork doubled.
• Elwood informs PBA he will not deliver the pigs
Can Elwood avoid his contract?
24) Mind Games Inc & CompuNerd
Is Mind Games Inc. obligated to pay the additional amount for “time & materials”.?
25) Ethics and Economic Duress
Suppose that an Internet Service Provider (ISP) wants to purchase capacity on the broadband
network of Big Telco so that it can resell that capacity to its customers. Big Telco also provides
internet services, so it competes in retail markets with the ISP. There isn’t much competition in
the infrastructure market, so the ISP does not have much choice: it needs Big Telco’s services.
When ISP goes to negotiate with Big Telco, Big Telco imposes tough conditions and high
wholesale prices on ISP. ISP complains, but Big Telco says, “Take it or leave it.” ISP cannot
“leave it” because it has no decent alternatives.
Is Big Telco being unfair (economic duress) or it Big Telco simply engaging in “hard bargaining”?
26) Coby and Maya
• What should Maya argue to void the contract?
• What should Coby argue to enforce the contract?
→
-
Many arguments to make
-
ARGUE UNDUE INFLUENCE
-
Fiduciary relationship (doctor-patient)
-
husband/doctor has to rebut it
-
Transaction wasn’t fair
-
She did not get independent legal advice before signing
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Cannot rebut
-
Making contract unenforceable as its undue influence
-
Can also argue intoxication under prescribed medicine/ mental incompetency as she
was depressed
27) OIL AND TURNER
• Is the contract unconscionable?
→
-
Unconscionable transaction
-
Factors support being improvident bargain
-
Did not consider future implications of contract
-
Years don't make us considering his age and health
-
Contract doesn't make sense either since the lease is 5 years and to purchase after,
gives turner option to purchase land at a price that is lower today (doesn't make sense
unless they know the market will crash in a few years)
-
Paying money and 0 interest also doesn't make sense
-
Yes inequality of bargaining power as it benefitted turner, making ali having a good case
-
Turner can rebut it but it won't work since turner made sure no one was there
when signing the contract
-
Mental incapacity, alis health was deteriorating (not enough info for this point)
28) Builders and doorknobs
Facts: You contract with a builder to build ten houses to full completion. Builder builds the ten
houses and completes everything but the doorknobs. Can the Builder treat the contract as
“discharged”? What am I required to do in terms of payment?
• Issue?
• Law?
• Application?
29) Case study: Alex and ben
Suppose that Alex and Ben enter into the following contract: in return for Alex shingling Ben’s
roof, Ben will dig a well on Alex’s property. Now suppose that Alex has finished shingling Ben’s
roof. Ben, however, has not even started digging the well. It turns out that the soil on Alex’s
property is not very good for digging wells. Both parties want to wrap things up. They want to
settle this contractual matter asap. The problem here is a consideration: they need a contract to
end their contract.
Can you suggest a solution? What can Alex and Ben each offer as consideration?
30) Case study: Risk management
Suppose that Alex just wants to forget about the whole thing. (At least, that’s what Alex says
now.) Alex tells Ben not to worry about their contract. Of course, nothing is put into writing. Ben
says, “Ok!” He is happy to forget about the whole matter. But then the economy sours. Alex
loses his job. Maybe he cannot afford bottled water anymore. Or maybe he is just angry and
needs to take out his frustrations. For whatever reason, Alex calls up Ben and says, “Hey, you
still owe me a well. You never performed. Now I am going to sue.” Now, what happens? Well,
Ben might have an equitable remedy(Waiver) available to him. Still, there is going to be
litigation, lawyers’ expenses, and general ugliness. How could Ben have managed this risk in
the first place
31) CHEF PIERRE IS FRUSTRATED
Chef Pierre operates a catering service in a town in Northern Ontario. December is one of his
busiest months. He typically has many contracts for catering services in December.
Unfortunately, December also happens to be a terrible month in terms of the weather. For the
past several years, Chef Pierre has found himself in a position where catering contracts have
been frustrated due to winter storms. Chef Pierre rarely asks for deposits. (It is considered
impolite in his small town.) So when a contract is frustrated, Chef Pierre usually suffers a loss
because of the statutory rules governing frustrated contracts. How can Chef Pierre manage this
risk? Should Chef Pierre change his contractual terms? Draft a clause that might be useful for
Chef Pierre in this context.
32) Dennis and carmens motorcycle contract
33) Rabby computer inc - pendulum publishing inc
34) Case study - nancy and donald
On June 15 Nancy entered into a contract to buy a piece of land called "Central Park Estates"
from Donald. The price for the land was $500,000, and Nancy had paid $50,000 as a deposit.
The transaction was scheduled to be completed on December 6 at which time Nancy would pay
the balance of the price in return for transfer of ownership of the land. Donald refused to
complete the transaction once he learned that the land was worth $1,000,000 as of Dec. 6.
• Nancy is suing Donald for breach of contract. Assuming Nancy is successful in her lawsuit how
much Expectation Damages would she be entitled to ? Explain and support your answer
→
Expectation Damages = Expected Benefit – Expected (or remaining) Costs
• Price: $ 500,000
• Deposit: $ 50,000
• Remaining Price to be paid: $ 450,000 ($500k - $50k)
• Value of Land on date it was to be delivered: $1,000,000
• Expectation Damages = Expected Benefit – Expected (or remaining) Costs
Expectation Damages = $1,000,000 - $450,000
Expectation Damages = $550,000
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35) Victoria Laundry (Windsor) Ltd. V. Newman Industries Ltd [1949]
Facts: Contract for Boiler Delivery by boiler maker (D) and laundry owner.
Defendant broke the contract for failing to deliver the boiler 20 weeks late. P suffered two types
of losses (weekly laundry income & special government contract)
Issue: is D liable for both types of losses
Legal Test: Did the breach of contract legally cause (i.e. loss cannot be remote) both types of
losses ? A loss is not remote if the D:
(a) Subjective Knowledge -- knew that type of loss could arise due to a breach; or
(b) Objective Knowledge – a reasonable person would have recognized that such a loss
could arise due to a breach
Application:
36) Case #3 (Classique Cars Ltd. & Adam