Last year, Simone bought a car on August 15 and insured it with the Rebel Alliance Insurance Company, for whom Darth was the local agent. On the following July 29, Darth telephoned Simone about renewing her policy and learned she was on vacation at her summer cottage. Acting on behalf of Rebel Alliance Insurance Company, Darth wrote to Simone at her cottage:

"As you know, your car insurance policy with us expires on August 14. We

will renew this policy on the same terms unless notified to the contrary by

you. You may sign the application form enclosed and pay after you return

to the city."

On her way back from her holidays on August 16, Simone struck and injured a pedestrian with her car. The pedestrian claimed $100,000 damages from Simone and, on referring the matter to Reliable Alliance Insurance Company, Simone was informed that her policy of insurance had expired without renewal on August 14.

QUESTIONS

1. What is the legal issue or issues arise upon these facts? (10 marks)

2. What are the legal principles that apply to the issue or issues? (10 marks)

3. Is there any additional fact which, if provided, would provide a clear solution to this problem? (10 marks)

4. You are Darth's supervisor at Rebel Alliance Insurance. Write a brief memorandum to Darth explaining the principles of offer and acceptance in Canadian Contract Law. (10 marks)

5. STYLE 10 marks will be given for grammar, style, spelling, and properly formatted references.

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