Business law case study

You are required to answer this part by filling in the blanks. Each blank is worth one mark unless otherwise indicated. (Ignore any criminal issues) Patricia (Pat) Pending, Marque (Marc) Deposee, Lamont Cranston and his wife, Clair Cranston, were equal owners in the invention of a flying bicycle, a novel invention with an interesting design shown below: As They planned to call it the "ET Bike", after the famous bicycle flying scene in the movie "ET Call Home". The picture below is from the movie, Universal Studies Pat and Marc were the creative members of the team and Lamont and Clair provided the funding. The foursome now wanted to commercialize their invention. Lamont had a Business Degree from the Capilano University, whereas Pat and Marc, both engineers, knew nothing about business. So, the task of starting the venture was Lamont's responsibility and, again, the financing would come from Lamont and Clair The first task was to ensure that the ET Bike intellectual property was protected. Lamont and Clair dreaded the prospect but realized that there was no alternative but to visit that necessary The first task was to ensure that the ET Bike intellectual property was protected. Lamont and Clair dreaded the prospect but realized that there was no alternative but to visit that necessary evil of business life - a lawyer! So, they made their way to the offices of Issit, Unique & Howe. As they entered the handsomely decorated offices, one of the lawyers, a large domineering woman, met them in the lobby and said, "Sue Writ's the name. Lawsuits are my game! If it moves hit it with a writ I always say!" Clair was so startled she hide behind a coatrack, while Lamont held the woman at bay with a lobby chair. He told he that they wanted to see an Intellectual Property lawyer. An obviously disappointed Sue Writ enquired, "Are you sure there is no one you want to sue?" "No, we just want to see an idea lawyer," said Lamont. In a dejected tone, Writ repiled, "We've got one of those here. Weird little lawyer. Always talking to her computer. Her name is Isadora Issit. Follow me and I'll introduce you." Clair came out from behind the coat rack and the three of them made their way through the offices, winding their way through the cacophony of clicking computer keys. As Ms. Writ had said, they found Isadora muttering to her monitor in an office cluttered with a plethora of particularly practical products. The Cranstons felt much more comfortable with the quiet Ms. Issit, who told them how they might protect the flying bike. What aspect is to be protected? (no marks) How will it be protected? (% mark) How long will the protection last? mark) 1 However, she also mention a serious IP problem they may have. However, she also mention a serious IP problem they may have. Although Lamont knew a great deal about running a business, the visit to Issit, Unique & Howe proved to be doubly helpful. Not only was Ms. Issit able to assist them with their intellectual property needs, she also introduced them to the firm's corporate lawyer, Mr. Pierce Veil. He suggested they had two options for a form of business organization - a partnership or a corporation. "However, my recommendation is that you do the latter. You have a very dangerous product, in a partnership the four of you would face potential personal liability. You would have liability for the debts and obligations under Section of the statute, and and liability under Section of the same statute for tort liability. With a corporate form of business organization, though, you can the risk and are protected." Then, Mr. Veil explained how this was so by drawing a diagram on a white board in his office: officers cove. 1 directors Ks sh sh I Explain how the Cranstons are protected from negligence and in doing so reference specific laws that apply: (6 marks) The Cranston's liked the idea of a corporation because their 17 year old son, Clayton The Cranston's liked the idea of a corporation because their 17 year old son, Clayton Cranston, was interested in business and was excited about becoming a director and officer in the company The incorporation documents were filed electronically by Mr. Veil. The name was to be Flying Bike Ventures Inc. The constituting documents filed for the company provided for Pending, Deposee, Lamont Cranston and Clair Cranston to hold voting shares and an investor, Montague Megabucks, to hold non-voting shares. Only Pending, Deposee, and Lamont Cranston would be directors, and Lamont would be the sole officer. The lawyer also advised Lamont that they should also have him draft a Now Lamont turned his attention to finding an Operations Manager to run the production of the bikes. He posted an advertisement on a job website asking for applicants with management experience in the manufacturing field. He included an application form requesting name, address, and a resume. To reduce the follow up interview he asked for the applicants to specify whether or not they had a criminal record. What statute did Lamont offend with his advertisement? Lamont was pleased with two applicants - Shane Sean O'Doul and Phyllis Frumpsteader applied for the position because from their resumes, they had the credentials necessary to do the job. During the job interview with Mr. O'Doul, Lamont asked if he was Irish Catholic, "...because we will be operating 24/7 and we don't want any religious holidays to interfere with that." O'Doul replied they would not. And in his interview with Phyllis, he asked her if she was married with children, because he did not want her family duties to interfere with her ability to do shift work. He also asked both candidates what their educational background was like. What questions are prohibited and why? Had Lamont asked the questions as follows - "Are you available to work shift work and work Had Lamont asked the questions as follows - "Are you available to work shift work and work on weekends because it is absolutely that our business operate 24/7?" Then the question might be considered permissible because the duty to be available 24/7 would be a The next task was to find suitable premises, which did not take long. Lamont meet with Gary Greed the landlord of commercial premises in Surry, BC. The building was currently rented by a firm called Peak Performance Pontoons Inc. Lamont talked to Benton Counter, the owner of PPP Inc. The lease was for 5 years which made it a Tenancy rather than a month to month lease which would be called a Tenancy. There were three years remaining on the lease, but Counter said, "PPP Inc. is moving because we needed bigger premises. Greed has agreed to let us go because rental rates in Surry have increased and he is sure that he can get more rent from a new tenant." Lamont said, "But aren't you bound to a lease?" Counter responded, "Yes, but the contract can be discharge by agreement. However, my corporate lawyer, Will Argue advised me to get a lease signed under seal. Lamont asked, "Why under seal?" So, Lamont met with the landlord. Greed provided Cranston with a document prepared by Greed but which was intended to reflect Flying Bike Ventures Inc.'s offer to Greed to rent the building. The document was called When Lamont reviewed it, he said, "The document says that the rental agreement will be in the form of the lease attached as an appendix. But there is no copy of the lease attached?" Greed replied, "Don't worry about it. It is just a standard form lease." Lamont signed it as shown below: Flying Bike Ventures Inc. Flying Bike Ventures Inc. Per Authorized Signatory Lamont Cranston Gary Greed, Landlord Next Lamont and his wife, Clair, met with their banker, Calvin Collateral, with the Lien On Me Bank, who arranged an operating line of credit. The document was signed as shown below: Flying Bike Ventures Inc. Ali Here Pers Lawn Ontario Authorized Signatory A Chat Lamont Cranston 42. C Am Seal Here Clair Cranston Calvin said, "We ran out of seals. I'll put one on later." After Lamont arranged to receive $200,000 in materials and supplies for the business on 60, 90, 120 day terms in a contract between Flying Bike Ventures Inc. and Loads of Supplies Ltd., the business began operating. 1 After only a short time in business, one of the flying bikes malfunctioned and flew into a building in Surrey causing hundreds of thousands of dollars in damages. The disaster was worse as hundreds of pedestrians saw the Flying Bike but did not know what it was. They thought Earth had been invaded by aliens from the planet Zorgon. Mass panic ensured, causing more damage. All the company's customers returned the Flying Bikes and demanded their money back Lamont told O'Doul, Frumpsteader and the company's employees, "Go home, dust off your resumes because you are all out of work. What did he do wrong saying this? After Lamont arranged to receive $200,000 in materials and supplies for the business on 60, 90, 120 day terms in a contract between Flying Bike Ventures Inc. and Loads of Supplies Ltd., the business began operating. After only a short time in business, one of the flying bikes malfunctioned and flew into a building in Surrey causing hundreds of thousands of dollars in damages. The disaster was worse as hundreds of pedestrians saw the Flying Bike but did not know what it was. They thought Earth had been invaded by aliens from the planet Zorgon. Mass panic ensured, causing more damage. All the company's customers returned the Flying Bikes and demanded their money back Lamont told O'Doul, Frumpsteader and the company's employees, "Go home, dust off your resumes because you are all out of work. What did he do wrong saying this? Answer the following worth two marks each: Who is responsible to pay the unpaid rent to the Landlord, Gary Greed, and why? Who is responsible to pay the Lien On Me Bank loan and why? Who is responsible to pay the supplier, Loads of Supplies Ltd., and why? Who is responsible to pay the employees and why? Who is responsible to pay for the damages to the Surrey building and why? Can Montegue Megabucks get his money back for his shares and why? You are required to answer this part by filling in the blanks. Each blank is worth one mark unless otherwise indicated. (Ignore any criminal issues) Patricia (Pat) Pending, Marque (Marc) Deposee, Lamont Cranston and his wife, Clair Cranston, were equal owners in the invention of a flying bicycle, a novel invention with an interesting design shown below: As They planned to call it the "ET Bike", after the famous bicycle flying scene in the movie "ET Call Home". The picture below is from the movie, Universal Studies Pat and Marc were the creative members of the team and Lamont and Clair provided the funding. The foursome now wanted to commercialize their invention. Lamont had a Business Degree from the Capilano University, whereas Pat and Marc, both engineers, knew nothing about business. So, the task of starting the venture was Lamont's responsibility and, again, the financing would come from Lamont and Clair The first task was to ensure that the ET Bike intellectual property was protected. Lamont and Clair dreaded the prospect but realized that there was no alternative but to visit that necessary The first task was to ensure that the ET Bike intellectual property was protected. Lamont and Clair dreaded the prospect but realized that there was no alternative but to visit that necessary evil of business life - a lawyer! So, they made their way to the offices of Issit, Unique & Howe. As they entered the handsomely decorated offices, one of the lawyers, a large domineering woman, met them in the lobby and said, "Sue Writ's the name. Lawsuits are my game! If it moves hit it with a writ I always say!" Clair was so startled she hide behind a coatrack, while Lamont held the woman at bay with a lobby chair. He told he that they wanted to see an Intellectual Property lawyer. An obviously disappointed Sue Writ enquired, "Are you sure there is no one you want to sue?" "No, we just want to see an idea lawyer," said Lamont. In a dejected tone, Writ repiled, "We've got one of those here. Weird little lawyer. Always talking to her computer. Her name is Isadora Issit. Follow me and I'll introduce you." Clair came out from behind the coat rack and the three of them made their way through the offices, winding their way through the cacophony of clicking computer keys. As Ms. Writ had said, they found Isadora muttering to her monitor in an office cluttered with a plethora of particularly practical products. The Cranstons felt much more comfortable with the quiet Ms. Issit, who told them how they might protect the flying bike. What aspect is to be protected? (no marks) How will it be protected? (% mark) How long will the protection last? mark) 1 However, she also mention a serious IP problem they may have. However, she also mention a serious IP problem they may have. Although Lamont knew a great deal about running a business, the visit to Issit, Unique & Howe proved to be doubly helpful. Not only was Ms. Issit able to assist them with their intellectual property needs, she also introduced them to the firm's corporate lawyer, Mr. Pierce Veil. He suggested they had two options for a form of business organization - a partnership or a corporation. "However, my recommendation is that you do the latter. You have a very dangerous product, in a partnership the four of you would face potential personal liability. You would have liability for the debts and obligations under Section of the statute, and and liability under Section of the same statute for tort liability. With a corporate form of business organization, though, you can the risk and are protected." Then, Mr. Veil explained how this was so by drawing a diagram on a white board in his office: officers cove. 1 directors Ks sh sh I Explain how the Cranstons are protected from negligence and in doing so reference specific laws that apply: (6 marks) The Cranston's liked the idea of a corporation because their 17 year old son, Clayton The Cranston's liked the idea of a corporation because their 17 year old son, Clayton Cranston, was interested in business and was excited about becoming a director and officer in the company The incorporation documents were filed electronically by Mr. Veil. The name was to be Flying Bike Ventures Inc. The constituting documents filed for the company provided for Pending, Deposee, Lamont Cranston and Clair Cranston to hold voting shares and an investor, Montague Megabucks, to hold non-voting shares. Only Pending, Deposee, and Lamont Cranston would be directors, and Lamont would be the sole officer. The lawyer also advised Lamont that they should also have him draft a Now Lamont turned his attention to finding an Operations Manager to run the production of the bikes. He posted an advertisement on a job website asking for applicants with management experience in the manufacturing field. He included an application form requesting name, address, and a resume. To reduce the follow up interview he asked for the applicants to specify whether or not they had a criminal record. What statute did Lamont offend with his advertisement? Lamont was pleased with two applicants - Shane Sean O'Doul and Phyllis Frumpsteader applied for the position because from their resumes, they had the credentials necessary to do the job. During the job interview with Mr. O'Doul, Lamont asked if he was Irish Catholic, "...because we will be operating 24/7 and we don't want any religious holidays to interfere with that." O'Doul replied they would not. And in his interview with Phyllis, he asked her if she was married with children, because he did not want her family duties to interfere with her ability to do shift work. He also asked both candidates what their educational background was like. What questions are prohibited and why? Had Lamont asked the questions as follows - "Are you available to work shift work and work Had Lamont asked the questions as follows - "Are you available to work shift work and work on weekends because it is absolutely that our business operate 24/7?" Then the question might be considered permissible because the duty to be available 24/7 would be a The next task was to find suitable premises, which did not take long. Lamont meet with Gary Greed the landlord of commercial premises in Surry, BC. The building was currently rented by a firm called Peak Performance Pontoons Inc. Lamont talked to Benton Counter, the owner of PPP Inc. The lease was for 5 years which made it a Tenancy rather than a month to month lease which would be called a Tenancy. There were three years remaining on the lease, but Counter said, "PPP Inc. is moving because we needed bigger premises. Greed has agreed to let us go because rental rates in Surry have increased and he is sure that he can get more rent from a new tenant." Lamont said, "But aren't you bound to a lease?" Counter responded, "Yes, but the contract can be discharge by agreement. However, my corporate lawyer, Will Argue advised me to get a lease signed under seal. Lamont asked, "Why under seal?" So, Lamont met with the landlord. Greed provided Cranston with a document prepared by Greed but which was intended to reflect Flying Bike Ventures Inc.'s offer to Greed to rent the building. The document was called When Lamont reviewed it, he said, "The document says that the rental agreement will be in the form of the lease attached as an appendix. But there is no copy of the lease attached?" Greed replied, "Don't worry about it. It is just a standard form lease." Lamont signed it as shown below: Flying Bike Ventures Inc. Flying Bike Ventures Inc. Per Authorized Signatory Lamont Cranston Gary Greed, Landlord Next Lamont and his wife, Clair, met with their banker, Calvin Collateral, with the Lien On Me Bank, who arranged an operating line of credit. The document was signed as shown below: Flying Bike Ventures Inc. Ali Here Pers Lawn Ontario Authorized Signatory A Chat Lamont Cranston 42. C Am Seal Here Clair Cranston Calvin said, "We ran out of seals. I'll put one on later." After Lamont arranged to receive $200,000 in materials and supplies for the business on 60, 90, 120 day terms in a contract between Flying Bike Ventures Inc. and Loads of Supplies Ltd., the business began operating. 1 After only a short time in business, one of the flying bikes malfunctioned and flew into a building in Surrey causing hundreds of thousands of dollars in damages. The disaster was worse as hundreds of pedestrians saw the Flying Bike but did not know what it was. They thought Earth had been invaded by aliens from the planet Zorgon. Mass panic ensured, causing more damage. All the company's customers returned the Flying Bikes and demanded their money back Lamont told O'Doul, Frumpsteader and the company's employees, "Go home, dust off your resumes because you are all out of work. What did he do wrong saying this? After Lamont arranged to receive $200,000 in materials and supplies for the business on 60, 90, 120 day terms in a contract between Flying Bike Ventures Inc. and Loads of Supplies Ltd., the business began operating. After only a short time in business, one of the flying bikes malfunctioned and flew into a building in Surrey causing hundreds of thousands of dollars in damages. The disaster was worse as hundreds of pedestrians saw the Flying Bike but did not know what it was. They thought Earth had been invaded by aliens from the planet Zorgon. Mass panic ensured, causing more damage. All the company's customers returned the Flying Bikes and demanded their money back Lamont told O'Doul, Frumpsteader and the company's employees, "Go home, dust off your resumes because you are all out of work. What did he do wrong saying this? Answer the following worth two marks each: Who is responsible to pay the unpaid rent to the Landlord, Gary Greed, and why? Who is responsible to pay the Lien On Me Bank loan and why? Who is responsible to pay the supplier, Loads of Supplies Ltd., and why? Who is responsible to pay the employees and why? Who is responsible to pay for the damages to the Surrey building and why? Can Montegue Megabucks get his money back for his shares and why