After midterm cases

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Feb 20, 2024

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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?
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.”
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