Aardvark Incorporated (AI) is a federally incorporated business located in Calgary, Alberta that constructs pipelines for the oil and natural gas industry. It wins a tender to construct a pipeline for natural gas from Alberta to a port in British Columbia for shipment of natural gas to markets in Asia.

The contract between the federal government and AI contains a clause which makes the contract conditional on securing all necessary environmental and other regulatory approvals including environmental assessments to maximize the protection of the environment. The proposed pipeline will run through lands to which the Tsleil-Waututh people have indigenous treaty claims. The contract price is $12.4 billion dollars CDN for the entire project

AI enters into a contract with a Hamilton Ontario based steel producing company called Steel It Inc. (SII) for the supply of steel. The contract price is $2.7 billion CDN for the supply and delivery of steel needed for the project. The contract is also conditional on obtaining all environmental and other regulatory approvals.

The project is approved by the regulators over the objections of the Tsleil-Waututh people and AI begins construction. The federal government makes progress payments totalling $1.1 billion to AI and AI receives and pays for the first shipment of steel worth $300 million. Construction proceeds from the natural gas field in Alberta until it reaches the BC border.

A federal election at this point puts the new Green Machine Party (GMP)in power which wins with a platform based on eliminating the use of all fossil fuels in Canada within 5 years. But the GMP does not win a majority of seats and must rely on the support of other parties to remain in power.

AI immediately sets up a meeting with the new government and is advised that the Prime Minister intends to and will kill the project "come hell or high water." However, AI also meets with opposition leaders who assure AI that they will try to keep the project alive.

SII is very worried about these developments and has a chance to sell all the remaining steel it has produced for the contract to another party. SII sends an email to AI asking if AI will be able to honour the contract given the change of government. AI does not tell SII about the meeting with the Prime Minister in its responding email and simply responds. "There is absolutely no cause for concern. We have met with opposition parties who will not support cancellation of the contract and the Prime Minster is very political and will not act on her agenda to kill the project."

SII ships the remaining steel to AI based on that and issues its invoice for the balance under the contract totalling $800 million. Days later GMP brokers a deal with another new party called the Old Democratic Party (ODP) who, together with the GMP, have a majority in the House of Commons and cancel the contract in a public announcement that day.

As if things were not bad enough for AI, its chief engineer turns out to have had a drinking problem and a design issue with another, older pipeline results in a rupture, causing a massive oil spill in the town of Blue Deer, Alberta. The town's water supply is polluted, all 100,000 residents are forced to move, and damages are estimated to total $21 billion or more.

Identify and explain as many legal issues which will result in legal disputes as you can. Clearly identify the parties involved in each dispute and how the resulting litigation might proceed. For the latter, assume that alternative dispute resolution is not an option.