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Ace Corporation owned a parcel of vacant land on which it stored its construction equipment. The land was not large enough for the requirements of

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Ace Corporation owned a parcel of vacant land on which it stored its construction equipment. The land was not large enough for the requirements of the company. When the adjoining landowner, Carl, expressed a desire to purchase the vacant land from the company, the directors informally considered the offer and agreed to sell the land for $150,000. According to the Corporation's by-law, major business transactions must be approved by the board of directors. The board operated on a majority rule basis. All the officers are authorized to bind the corporation in contract. No directors' meeting was held to formally deal with the matter. However, the Chief Financial Officer, Bob, on the basis of the informal agreement amongst the directors, contacted Carl and advised him of the price. The price was acceptable to the purchaser, so the Chief Financial Officer, Bob, then drew up a written purchase agreement that he signed on behalf of the corporation in his capacity as Chief Financial Officer. Carl also signed the document. The directors later decided not to carry through with the sale, and Carl brought a legal action against the corporation for specific performance of the contract. Ace Corporation and Carl reside in Ontario. A) What is the name of the legal document that must be filed by the Ace Corporation to respond to Carl's action? (2 marks) B) What defences might be raised by the corporation in this case? What legal concepts or principles are involved? (9 marks) 0) What is the likelihood that Ace Corporation's defences would be successful? Why? (8 marks) D) Assume Carl was Bob's cousin. Did Bob have to disclose this relationship to Ace Corporation's directors? Why or why not? (3 marks) E) Ace Corporation's shareholders were extremely unhappy about the legal action initiated by Carl. They blamed the board of directors for mismanaging the corporation. Please provide two (2) examples of rights or actions that shareholders can take in order to influence the operations of a corporation. (6 marks)

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