Blue Sawmill Inc. entered into a contract with Mr. Green to purchase a quantity of timber growing on land owned by Mr. Green. A price of $150.00 per cubic metre was agreed upon and the quantity set at approximately 600 cubic metres. Mr. Green was to cut, trim and timber mark the timber. Blue Sawmill paid an initial deposit of $15,000.00.

Of note: Timber marks areused to identify the specific cutting authority or geographic location where the timber was harvested. Timber marks are issued by the government. They are made up of unique sets of letters, numbers and sometimes other characters which are stamped or written on the ends of logs.

Some weeks later, Mr. Green phoned Blue Sawmill and informed them that 600 cubic meters of timber had been cut, trimmed and stacked.The total price was $94,000.00. When asked if the timber had been timber marked, Mr. Green replied that it had not. He said he was going away on a short vacation and he would timber mark the timber upon his return. In accordance with the contract, Blue Sawmill sent Mr. Green a cheque for the full price, less the deposit already paid.

Before Mr. Green returned from vacation, his sheds were destroyed by fire. Blue Sawmill insisted that they were owed 600 cubic meters of timber, as per their contract. Mr. Green indicated that, it was Blue Sawmill's timber that burned in the fire.

Blue Sawmill has come to see you to find out if they have any type of claim. Provide them with your best advice.

2. What is the difference between the actual and apparent authority of the agent?

3. Ty Sharim has been employed as an agent for Farley's Game and Fishing Lodge Inc. for the past 10 years. Farley's runs an exclusive hunting and fishing camp in northern Ontario. Ty's contractual duties include advertising the camp and soliciting customers at fish and gun shows and conventions in North America and elsewhere. One weekend while on a fishing trip with his family, Ty came across a small fishing camp that was for sale. As Ty has always dreamed of owning and operating his own business, he is thinking of putting in an offer to purchase the camp. Can Ty put in an offer to purchase the camp, or must he inform Farley's of the camp. Thoroughly explain your answer.