ETHICS, BUSINESS LAWS & SOCIAL RESPONSIBILITY

Wko Cases & Problems Case 1 The family of Jack were away on a winter vacation in California when a storm off a large branch from a tree. The branch landed on the roof of their home and causing severe damage. The neighbor of Jack, named Jill, realized that if the roof will not be quickly repaired, its furniture, fixture and carpets would be badly damaged. Jill had no way of contacting Jack. In her own initiative, she contacted two builder firms and obtained a quotation from each of them. Jill paid the builder for the cost of damage. Issues: Is Jill entitled to be reimbursed? Can invoke agency by necessity? Please state your reasons Case 2 Joker purports to accept the offer of John to sell a large quantity of crops to Peter and without authority coming from the principal, Peter. Before its delivery date, John learned that Joker has no authority. John sold the crops to other party because he cannot wait for the ratification of the agreement from the principal as the crops need to be disposed off as quickly as possible as it is perishable goods. The entire insurance policy is payable to John. Later, Peter ratifies the contract of sale. Issue: Is there a binding between Peter and John? Please state your reasons. Case 3 ABC Corporation was awarded a project to create a water supply for the town of Olds. The project involved the construction of water intake line under a portion of the riverbed. During the design of the project, they foresaw that a risk of damage from flood is real. And that is why and before the start of the project, they secure an insurance coverage for those risks. The corporation communicated to the agency, Insurance Broker, in a clear and no uncertain terms, the risks that they wanted to be covered namely the potential damage to the materials, equipment, and construction site itself. The company was satisfied with the outcome of the conversation with the agent as the agent said that the coverage of the risks will be arranged, and the insurance policy will be delivered in due time. Immediately, the agent contacted the insurance company and purchase a policy that exclude the coverage, as requested, in the event of flood. When the river was flooded, it destroyed and damaged some of the construction materials, equipment, and its site. Worse, the company learned that the insurance policy does not cover those risks that were directed as per instruction. Issue: Who is liable for the cost of damage, the agency, or the insurance company? Please state your reasons. Case 4 Jason, who has graduated from automotive program, and Gerry who is a businessman and entrepreneur entered into a partnership business of auto repair shop. In their partnership agreement, Gerry will provide on the financing and administration while Jason will act as active partner and in-charge of running the operations of the business. The agreement also stipulates that the firm should not engage in the buying and selling of vehicles. Due to financial needs, Jason sold a vehicle who belongs to a customer who had left it with the firm for repair and without the knowledge of the owner. Later, the car was recovered by the owner from Jack, who is the innocent buyer. Jack sued Jason for breach of implied condition under the contract of sale that the seller has clean title of the goods. Issue: Is Gerry liable of Jason's misdeeds? Case 5 P Corp, a retailer of women's fashion accessories, contracted Sandra as their purchasing agent. The agency contract expressly stipulates that Sandra is not allowed to enter into contract in excess of $50,000.00 without first obtaining approval from P Corp. On a number of occasions, Sandra negotiated the purchase of quantities of costume jewellery from Z Inc for prices varying between $30,000 to $45,000.00. Recently, Sandra placed an order with Z Inc for goods at a price of $60,000.00 and without consulting P Corp. Z Inc did not question the order. Two weeks after, Z Inc received payment from P Corp. Sandra was reprimanded by P Corp and, again, reminded of her $50,000.00 limit. Despite the warning, Sandra placed another order of $55,000.00 from Z Inc. This time P Corp refuse to pay and demanded Z Inc to take back the goods. Issues: Is Sandra acting on actual or apparent authority? Is the principal bound by the action of the agent, Sandra? Please state your reasons. Case6 Therien, an independent contractor, operated a trucking business. He drove one truck and hired drivers to operate the others. Therien was engaged in the business for several years and has been doing business with City Construction Company. Teamsters is a trade union within the definition of that expression in the Labour Relations Act. The City Construction Company entered into a collective agreement with the Teamsters' Union requiring, as one of its terms, that all employees be union members. Therien agreed then to hire only union members for the operation of his truck. However, he declined to join the union personally because he wished to maintain his relation as an independent contractor in dealing with City Construction. He further claimed that, in the capacity of an employer in his own right, he was forbidden by the Labour Relation Code from participating in union activities. The union opposed his view, and because of the union's threat to picket the City Construction, the general manager of the company informed Therien that the company must terminate his services. Therien suffered a significant loss of business, and sued the union, claiming damages for its wrongful conduct. The union defended on the grounds that, first, it was not a legal entity and so could not be sued. Second, it had not been guilty of conduct that might constitute a tort. Issues: Is the union a legal entity, i.e., capable of being sued? If yes, then the union cannot be subjected under the tort law. Please state your reasons