Mai Zhou is the owner of a family-operated restaurant in Victoria, British Columbia called "Mai's Modern Taverna" (the "Taverna"). The taverna has been a wild success since it opened back in 1997 pleasing customers with its seasonal menu consisting of fresh BC ingredients. Recently, Mai's commercial grade oven died and needed to be replaced; given that the oven was in constant use, this was a very important purchase for Mai. After looking at a variety of retailers, Mai stumbled into a store called "Cooks Inc." and saw the perfect commercial oven: the Atosa 60" Gas Range (the "Atosa") manufactured by Atosa Inc. The Atosa had 10 stove-top burners and two separate ovens for fast-paced cooking. Despite the steep price tag (the Atosa was $4,800), Mai decided it was perfect and it came with a one-year manufacturer's warranty which covered parts and labour. Cooks Inc. delivered Mai's Atosa to the restaurant, professionally installed it, and sent the old oven for recycling. When Mai turned the Atosa on for the first time, it worked like a charm and Mai was thrilled. Mai cooked on the range for over six months without any issue. Six months after the purchase Mai started to notice that food was burning despite it being cooked properly. Mai noticed that the stove-top burners where having large and frequent flare-up where the flames would suddenly burst; these flare-ups were causing the burning and also make the burners dangerous to cook on. Mai called a professional serviceperson who determined that the Atosa gas lines where starting to disintegrate which was causing the flare-ups. According to the serviceperson, Mai's Atosa was not to be used until the gas lines and wiring of the Atosa could be replaced (costing around $4,000). Mai immediately wrote to Atosa Inc. so that they would honour their warranty. Unfortunately, Atosa had declared bankruptcy shortly after Mai purchased the oven and, as a result, the warranty was useless and the company could not be sued. Mai is now looking for a way to sue Cooks Inc. 1. Explain and the full legal test to determine if the Sale of Goods Act applies to the transaction (4 marks) 2. Taking into account the facts, describe the specific implied term that Mai should argue was breached Cooks Inc.? Would that specific claim be successful on the facts? Answer by explaining and applying the relevant law. (4 marks)

Question 2 options: