Case 1

Igor works as a stockbroker for a company. Following procedures that he remembered reading in the company's official policy, he purchased $100,000 worth of shares on instructions from a client. Unfortunately despite Igor's repeated demands, the client refused to pay for those shares. Worse yet, during that time, the value of the shares dropped by 60%. Eventually, the company took control of the account, sold the shares for $40,000, and threatened to sue Igor for $60,000. in the company's view, the whole fiasco was Igor's fault.

Igor, on the other hand, vigorously denied liability, but was unable to find the policy document that he relied on. He was also getting worried that a lawsuit would damage his professional reputation. So, he agreed to pay $50,000 in exchange for the company's promise to drop the matter.

Two weeks later, before actually making the payment, Igor found the lost document, which proved that he could not be held liable in these circumstances.

Questions:

1. Can the company force Igor to pay $50,000?
2. Did Igor incur a contractual obligation to do so?
3. Did company provide consideration in exchange for Igor's promise?

Case 2

Duringnegotiations over a share purchase agreement, Tom states that he is willing to invest in the Unlucky Insurance co only ifit plans to :

• open an office in Vancouver and
• make him the company's medical consultant in that city.

Unlucky Insurance agrees to Tom's conditions. Tom purchases theshares. Year end comes, but the company has not fulfilled Tom's wishes.

Question:

1. Was Unlucky Insurance Co.'s agreement to do business in Vancouver, with Tom as consultant, a misrepresentation or a misstatement about its future conduct?
2. If Tom sues Unlucky insurance, do you think he will win?

HINT:

1. Analyze Case 1 in regard to "Consideration"
2. Analyze Case 2 in regard to" Terms and representations"