Ouestion 2

Assume that a contract was formed June 16th between Topical Inc. and SS for the issuance of 100,000 shares in settlement of the account and the following scenario occurred.

On June 7th, Health Canada had requested that Topical Inc. complete further six (6) month study to confirm the safety of its product. Andy did not disclose this request to SS or to anyone other than the employees who would conduct the study. Details of the request were posted on Heath Canada's website, although there was no other public notice of the additional requirement for approval.

Upon publication of this news by a reporter on June 20th, the shares of Topical Inc. plummetted to $ .01 per share.

SS wishes to set aside the agreement to accept the shares and pursue its claim for the outstanding legal fees.

Required: Explain the basis upon which SS will proceed and whether the application will be successful. Make sure you discuss the applicable principles as part of your answer.