andra and Rhonda are the only shareholders of

GTA Car-Rental Ltd. ("GTA") which is a corporation. Sandra and Rhonda each hold 50% of the common shares and are the sole directors and officers of the corporation. GTA rents cars mainly to students.

Champion

's

Car Dealership

Ltd.

("

Champion

's

")

sells cars. Sandra, on behalf of GTA,

purchased 10

cars from

Champion's

for $200,000.

GTA paid the

d

own payment

of $50,000

but had to agree to pay the balance of the

purchase price

with interest in monthly payments

over 48 months.

GTA and Champion entered into the purchase and financing contract.

Sandra sign

ed the contract on behalf of GTA.

GTA

made the mon

thly payments

to Champion

for the first 6 months

. However, with the

popularity of

Uber and Lyft, students

leased fewer and fewer cars

from GTA.

By the 7

th

month

GTA

ran out of money and could not make any more monthly payments to Champion.

GTA

has no

in

come and very few assets, and certainly not enough to cover all of GTA's debts.

Champion

's

realizes

that if it sues

GTA

for breach of contract

(i.e. unpaid loan)

it will not

recover

enough money to pay the outstanding debt.

But S

andra has

very

significant assets

that will be

more than sufficient to pay the remaining debt

. Sandra is a majority shareholder

, and a director

and officer of GTA

.

She also

negotiated and

signed the contract on behalf of

GTA

.

As a result,

Champion's wants to sue Sandra

for breach of contract.

Will Champion

's

be successful in suing

Sandra for

GTA Car

-

Rental Ltd.'s

breach of the

contract?

Yes or No

.

Explain

and support

your answer by: (a) stating the legal issue(s);

(b) stating the law / legal test; and (c) applying the law to the facts