Flora was the manager of a mid-size real estate agency in Kelowna. She supervised the work of twenty sales personnel.

Flora decided to organize a special breakfast meeting at which an analyst guru would be invited to speak to her sales staff. She wanted the occasion to be "special".

Flora decided to order three dozen gourmet donuts for the event from the Donut Delight ("DD") bakery around the corner. She made it crystal clear to the DD employee who took her order that she wanted the donuts to be filled with DD's famous raspberry jam confection.

On the day of the breakfast event DD delivered the donut order, but to her horror Flora learned that the donuts contained an inferior peanut butter product, and not the special raspberry jam she had ordered. Flora refused to pay for the donuts, and she told DD to take them back.

DD refused to take the donuts back. Instead, DD sued Flora for the full agreed cost of the donuts.

1. What are the legal issues that arise in this case? (2 marks)

2. What are the legal tests that the court will apply to decide the case? (1 mark)

3. Discuss how the legal tests should be applied to the facts of the case, and state the likely outcome of the dispute between the parties. Give reasons for your answer, referring to the relevant legal tests. (2 marks)