BUSM 1285 Business Law Case Study Assignment Angie, Bruce and Chandra are three Langara School of Management students who want to start a business together. They know that the electric vehicle market is growing and so they decide to start an electric car dealership and autobody shop, hoping that it will turn a profit. Each contributes $10,000 towards start up costs including legal fees, rent, equipment and business software. Once they have created and validated their business plan, their first step is to make an appointment with Big Bank Inc. to take out a business loan in January. Big Bank Inc. agrees to lend them $800,000 to purchase their inventory of electric vehicles, provided they pay the amount back plus $40,000 in interest. The parties agree that Angie, Bruce and Chandra's business will pay back the loan plus interest in eight monthly payments of $105,000. They also agree that they must have Big Bank's written approval before they incorporate their business. Angie, Bruce and Chandra and Big Bank all sign a contract containing those terms. The electric vehicle aficionado, Angie, uses most of the $800,000 to purchase a fleet of new electric-powered vehicles to sell. Bruce likes managing logistics and operations, and so he enters into a contract on behalf of their business with Cambridge Realty to rent an empty car dealership in Vancouver for one year. Chandra has a knack for mechanics and so she will work in the autobody repair shop. The three of them remember what they learned in their Business Law class, and realize that it would be wise for them to incorporate a company to carry on the electric vehicle dealer and autobody business. This will help them avoid personal liability in case something unexpected happens with their business. Bruce calls Big Bank and explains the situation. He asks whether he needs the written consent of the Bank in order to incorporate their company. The bank representative tells him that "it's okay" and that he can go ahead and incorporate without their approval. Bruce lets Angie and Chandra know the good news and the three of them decide on "Electric Vehicles Inc." for their business name. They incorporate their company, and they decide that they will issue 3 shares, one to each of Angie, Bruce and Chandra. Angie and Bruce agree to work as paid directors of the company but Chandra is hesitant. Angie knows that she needs Chandra's help managing the autobody shop and so she cajoles her into agreeing to be a director. Chandra was still a bit hesitant to agree to become a director, but she felt she didn't really have another option. On February 1st, Angie, Bruce and Chandra open up eVehicles Dealership and Autobody for business to the public. Angie sells electric vehicles to customers, Bruce takes care of the They receive another letter, this one from Damian's mother, complaining that Angie mislead Damian and his mom. The letter alleges that the 2023 Edison Model X car only gets a fuel efficiency of 96 miles per gallon, not the 100 miles per gallon that Angie promised. She also accuses Angie of trying to take advantage of her child by making him pay $1,200 a month for the car. She claims that since he turned 19 a few months ago he can't find a job that pays enough for him to make both his car payments and to pay his college tuition. She indicates that unless Angie lowers the payment amount to $1,000 per month, she will sue eVehicles. They receive a third letter from Eduardo requesting delivery of the red 2022 Edison SUV that they agreed was custom made for him. He has yet to receive the car, despite paying the deposit and the remaining $50,000. They receive a fourth letter from Victoria, describing the upsetting incident that occurred at the eVehicles lot. She claims that she was legitimately frightened for her safety and that eVehicles is responsible for assaulting her. She also includes a doctors note indicating that she has been recently diagnosed with an anxiety disorder as a result of her witnessing the incident. She's claiming that eVehicles owes her $100,000 in damages. Their last letter is from Wallace, claiming that he will sue eVehicles for $300,000 in damages for his broken foot and lost income from working his job in the warehouse. He also claims that because of Chandra's carelessness, he doesn't have to pay for the vehicle repairs. Angie, Bruce and Chandra come to you for advice. In your response, you should identify any and all business law issues that arose in the above scenario. For each issue, identify whether a law was violated, and include your detailed reasoning. For each letter they received, identify whether the person has a valid legal claim and whether they will be successful if they pursued legal action against eVehicles, Angie, Bruce or Chandra. operations and finances of the business, and Chandra runs the autobody shop. Business goes well, but a few unexpected events occur. One day in March, Damian, an 18-year old boy comes in to the Dealership with his mother and decides to purchase a 2023 Edison Model X car. Before signing the contract him and Angie discuss the terms. He wants to know more about the fuel mileage of the car. Angie tells him that the 2023 Model X normally gets around 100 miles for every gallon of fuel put in. She knows that it can vary depending on the kind of fuel used and the average speed of the car, but it's normally between 96 and 120 miles per gallon. Nonetheless, Damian didn't inquire further so she assumed he had enough information. Damian and eVehicles Dealership and Autobody sign a contract where Damian will pay $1,200 per month for 48 months in exchange for the 2023 Edison Model X car. Assume that there were no other express terms written in the contract. Then in April, Angie and Bruce experience a very troubling situation. One afternoon, a man walks onto the car lot and starts causing a commotion. He yells obscenities at Victoria, an elderly customer, while pouring gasoline over a red 2022 Edison SUV that she is looking at. He proceeds to light it on fire. Victoria becomes scared for her safety and leaves eVehicles immediately, in a panic. The man quickly leaves, and while Angie and Bruce try to catch up to him, they never find him again. They file a police report but unfortunately the suspect is never found. Once the fire has been put out, Bruce looks at Angie with concern. The red 2022 Edison SUV that has turned to a mound of melted plastic and scorched metal car parts was sold the day before to Eduardo according to a contract. Eduardo agreed to pay a $10,000 deposit the day he signed the contract, which he did, and the remainder of $50,000 on May 1. In return, title to the SUV would pass to Eduardo on May 1. Bruce tells Angie that this was a special edition red 2022 Edison SUV made especially for Eduardo using a pattern of fabric for the interior that has been discontinued. Angie doesn't know what she's going to do to make things right for Eduardo. Finally, in May of 2023, Chandra is working on repairing Wallace's 2016 Edison Sport Edition car. Chandra and Wallace agreed in writing that Chandra would repair the transmission and detail the inside of the car for a total price of $2,000. Chandra repairs the transmission and spends hours detailing the inside of the car. As she's backing Wallace's car out of the garage and into the parking lot, she accidentally runs over Wallace's foot. She apologizes profusely - she didn't see him standing in her blind spot while she was backing up. She tries to explain to him that she checked her rear-view mirror and the side mirrors, and even looked over her shoulder to perform a shoulder check, but she never saw him. Wallace is angry and refuses to pay for the repairs. He takes his car and drives off without paying. On an especially bad day in June, Angie, Bruce and Chandra receive a number of letters from local lawyers written on behalf of their clients. One letter from Big Bank that alleges that they have breached their contract with the bank. Big Bank alleges that they did not get written approval before incorporating their company. In their letter they state that they will sue Angie, Bruce and Chandra for breach of contract, and will seek damages of $315,000, the remaining 3 principal and interest payments to be paid.