Significance Of Manufacturers Warranty
1. Explain the significance of a ʺmanufacturerʹs warrantyʺ on products such as a camera and a radio, and discuss why, from the seller’s point of view, it may be considered necessary with respect to the Sale of Goods Act. Give an example of a situation where such a “warranty” will be ineffective.
2. Discuss the bankruptcy and insolvency process from initiation to discharge from the point of view of the creditor, indicating how that creditorʹs interests are, or are not, protected. Assuming you are a creditor, will it make any difference whether the debtor is an individual or a company?
3. Sam had been saving his money for a long time. He went to dealer, Off Road Sales, to discuss buying a four‐wheel drive vehicle. The Off Road salesman discussed several models. About the Range Rover he said, ʺThis vehicle has the best safety record of any in its class.ʺ Sam, who had lost a sister in a highway accident, was persuaded by that statement and contracted for a new Range Rover. The standard form contract said in small letters that that there were no warranties express or implied. The vehicle did not run properly; something was wrong with the steering mechanism and Sam had to wrench the wheel to prevent it from running into oncoming traffic. Does Sam have any recourse against Off Road? Explain how you have reached you conclusion.
4. Mr. Hume owes you $2000 for consulting services satisfactorily completed for him last January. He had agreed to pay you on January 20. He has not responded to your calls or letters. Six months later, you have learned the following interesting facts about Hume:
• He has a bank account
• Five years ago, he transferred his interest in the family home to his wife for $1.
• He also owes four others who have completed work for him.
• A Mr. James owes Hume $4000 for a boat sold to him by Hume.
Keeping in mind what you have read in Unit 1, what steps can you take to recover all or part of the money Hume owes you? Assess the effectiveness of each.
5. Farida is a single mother immigrant with refugee status. Her comprehension of English is low and her knowledge of the Canadian legal system is almost non‐existent. Just after she rented a small unfurnished basement suite, Roger from Fly‐by‐Night Furnishings Inc. came knocking on her door to sell her furniture. He showed her a catalogue, fabric samples, a small chair and a table that he said were of the same quality as the furniture he was selling. Since Farida desperately need furniture and the prices seemed affordable, she picked out a sofa bed, two chairs, two tables and a chest of drawers. Roger got her to sign a long contract with much small print for a total amount of
$3,000. He accepted a cheque for $2,000 – Farida’s total savings – and had her sign a promissory note, due in six months, for the balance. There was no stamp on the promissory note. When the furniture arrived six days later, it was obviously of lesser quality than the samples. In fact a leg fell off the sofa the first time Farida sat on it and when she opened up the bed, the mattress shown in the catalogue was missing. She couldn’t find a copy of the contract and when she tried to call Roger but the Fly‐by‐Night number was “no longer in service.” By that time, her cheque had been cashed so Farida thought she had no alternative but to keep the furniture. However, she decided not to make any payments on the promissory note. Six months later, she received a letter from Cut‐throat Finance Company demanding payment in full. A month later, a bailiff came to the door with a document that said he was entitled to repossess the furniture as it was part of security for a chattel mortgage. When she talked to a local lawyer she learned that a rumour was going around that Cut‐Throat was managed by Roger’s brother. If you were the lawyer, what information and advice would you give Farida about her situation, including preventative measures she could have taken if she had been aware of her legal rights?
6. There are significant examples of statutes that interfere with the free contractual nature of the employment relationship or otherwise compensate for the inadequacies of the protections given to employees under the common law. Discuss several examples of these statutes in terms of the objectives to be accomplished and whether these objectives have been met.
7. Discuss the role of the Partnership Act as it relates to people carrying on joint business activities. For example, how does it govern the activities of partners with each other and the activities of those partners with outsiders?
8. Mr. Lopez, the owner of a manufacturing business, had a large family. His six children were all in their late teens or early twenties and were in school or had jobs. However, in the summer of 2001, two of the six got laid off and the other four were having trouble finding work. Lopez spent ten days reorganizing his business to find jobs for his family. He decided that the foreman at the plant, Mr. Wedman, who had been with the firm for twelve years, seven as foreman, could go back to being a carpenter and make room for his oldest son, who had management experience. There was no written employment contract with Wedman. On Friday afternoon, Lopez called Wedman into the office and told him that on Monday he would return as a carpenter and that he would be under the direction of his son. Wedman lost his temper, yelled that he didnʹt want to be a carpenter or under the direction of a spoiled son, and that hell would freeze over before he would accept a pay cut. Lopez dismissed him immediately and with no severance pay, yelling back that Wedman was too old for the job anyway.
9. A salesman, Wally, in a menʹs clothing store has heard rumours that the store is going out of business. The boss, Raj, is out of the store when a customer, Lee, who has heard the same thing comes in and offers to purchase the entire stock, the display cases, and the fixtures. Wally accepts on behalf of Lee. Discuss the legal position of the parties. Would it make any difference to your answer if Raj demanded return of the clothing but took the opportunity to replace his outdated fixtures with new ones?
10. Mona, Asuka and Gloria are interior designers. Mona and Gloria live in rented apartments but Asuka owns a penthouse condo. When the real estate market went into overdrive, they decided to combine their talents and start a “staging” business (Supreme Staging) where they would source, deliver and arrange furniture and accessories in residential properties that were listed for sale. Each put up $20,000 to purchase initial inventory and Gloria provided warehouse space that she was using for her personal interior design business. They drew up a simple one page letter agreement where they agreed to divide the profits: 30% each to Mona and Asuka and 40% to Gloria. The staging business took off much faster than they expected. They soon realized they need the help of an accountant and some muscle power to move and deliver the furniture. Because they didn’t want the hassle of an employee payroll, they hired everyone on an independent contractor basis. Tom did all the accounting and soon had so much work that all his time was taken up by Supreme. The ten men who moved the furniture worked to a schedule and procedures set by Supreme and drove Supreme’s moving truck. However, they were expected to provide any tools that were necessary to do their job. They were soon fed up with the excessive demands of the Supreme owners and approached ABC Union to inquire about certification. When Mona learned about this she told them that they didn’t qualify to join a union but, if they did, she would fire them all. Relations went from bad to worse and the movers became careless on the job. One of them left a burning cigarette in a sofa which caused a fire that destroyed a show home. Supreme’s customers vanished overnight. The next week Tom and the movers arrived at the warehouse to find a sign saying “Closed for business.” Identify the legal issues in this scenario and the rights and remedies available to the various parties.
11. Imagine you are an interior designer and want to set yourself up as an independent business person. As the business expands, you find two other designers who want to participate in the business. Discuss in detail the advantages and disadvantages of incorporation as a method of carrying on business as compared to sole proprietorship and partnership.
12. You are a second mortgagee. Consider the various remedies that are available to you in the event of a default, and discuss the effectiveness of each.
13. Mr. Ace of Comtec Inc., a closely‐held corporation, is one of three shareholders.
After several years of considerable success, the corporation hit hard times. It
appeared to the other shareholders, Mr. Brown and Mr. Cream, that Ace had lost interest and was no longer pulling his weight. Brown and Cream voted Ace out as a director and voted not to renew his employment contract. When each of the shareholders started out they had signed employment contract forms they downloaded from the internet, including a clause: ”All information gained from the business is confidential. I agree to keep all such information secret and not use it or share it with anyone outside the business.” Upset by the firing, Ace just wanted to sell his interest and leave the corporation. The other two shareholders, however, refused to buy his shares. Furthermore, when he attempted to sell his shares to his brother, who was interested in the corporation, they refused to register the brother as a member. Ace, in frustration, took as much information as he could to Xtec Inc. in exchange for a job with them. What, if any, remedies are open to Ace against Brown and Cream? Could he have done anything to prevent this situation? What can Brown and Cream do about the loss of confidential trade secrets?
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