Problem 1

Cratchit has sold Christmas trees for the past five years. Each year he had purchased the trees from Marley who had a small tree farm in Northern Ontario. In order to ensure that he would have an adequate supply, Cratchit entered into a contract with Marley on September 15 to purchase all of her available trees at a price of $30.00 per tree. The contract read as follows: "Cratchit agrees to purchase and Marley agrees to sell all of her Christmas trees (approximately 500) for $30.00 per tree. All trees are sold without warranty. Same terms as last year apply." On December 1, Marley cut the trees (which totalled 478), tagged them and placed them on the delivery truck. Orders were prepared directing the driver to make the delivery to Cratchit. Marley texted Cratchit to advise that the trees were on the way. Later that day the delivery truck slid off the road, resulting in the destruction of the trees. Cratchit purchased 500 "Douglas Pine" trees from another supplier at $40.00 per tree. Subsequently Cratchit received an invoice from Marley for the full purchase price of $14,340.00. Upon further investigation, he has also discovered that 100 of the trees that were shipped were "Scotch Pine" trees and the balance were "Douglas Pine" trees. Cratchit's profit on the sale of "Douglas Pine" trees is $40.00/tree as opposed to $30.00/tree for "Scotch Pine" trees. In the previous years Marley had delivered only "Douglas Pine" trees. Cratchit refuses to pay and sues Marley for breach of contract. Marley counterclaims for the price of $14,340.00. Required: Explain the legal positions of Cratchit and Marley and the likely result. Be certain to cite all relevant legal principles including the relevant portions of the Sale of Goods Act

Problem 2

Brad, Erica and Katharine have established separate advertising businesses. Brad and Erica operate as sole proprietorships. Katharine has incorporated a company, Katco Inc., to run her business. Katharine was recently the successful bidder for the production of an advertising campaign for Mickey Best's Beer Inc. ("MBB"), a brewery started by sports legend Mickey Best. Since she did not have the resources to complete the campaign, she suggested to Brad and Erica that they complete the job together. Brad, Erica and Katharine agreed that although the contract, as signed, was with Katco Inc., they would all contribute equal amounts of capital, staff and time and divide the profits equally, subject to a commission fee of $75,000.00 which would be payable to Katco Inc. for arranging the contract. 2 The campaign was successful with each of the parties earning $200,000.00. On January 1, MBB told Katco Inc. that they would not be renewing the contract. In response to her inquiries MBB revealed that it has signed an agreement with Bradco Ltd., a corporation recently formed by Brad, for advertising services for the next year at a price of $400,000.00. Erica and Katharine come to you for advice and want to commence legal action against Bradco Ltd. and Brad for all profits, and/or an injunction to prohibit Bradco Ltd. from proceeding with the contract. Brad claims that since Bradco Ltd. is a new corporation, any past dealings which Brad may have had with Erica or Katharine do not apply to Bradco Ltd. and in any event that they were never partners and therefore all clients were "up for grabs". Required: Advise Erica and Katharine whether they have any basis to commence an action against Bradco Ltd. or Brad. Are Brad, Erica and Katharine (or Katco Inc.) partners? Be certain to explain the applicable principles as part of your answer. Would the situation be any different if Katharine (rather than Brad) was personally hired by the brewery as an in-house employee in charge of advertising? Why or why not?

Problem 3

Katharine and her family had brewed beer for years and, through a process of trial and error, had come up with a number of unique recipes. As part of the contract with MBB, Katco Inc. was to work with MBB's brewers to create and market a new light beer. Katco Inc. provided MBB's brewers with the recipe for "Molly's Great Draft"; a recipe originally created by Katharine's Aunt Molly. Katco Inc. devised a marketing campaign around the new beer, shortening the brewer's name to "Mickey's" and promoting the beer as "Mickey's Great Draft" and as "MGD". Shortly after the launch of the campaign, MBB was served with two lawsuits: (i) Aunt Molly claims that she has patent rights to the formula for "Molly's Great Draft" and sues for an accounting for all profits; (ii) Miller Brewing Company, a large brewing company located in the United States claims that the use of the name "Mickey's" and "Mickey's Great Draft" infringe upon its trademark registration and brand names "Mickey's", "Mickey's Fine Malt Liquor" and "Miller Genuine Draft". It further claims the initials "MGD" are a recognized nickname of their beer and that the use of all of the names infringes its intellectual property rights. MBB claims that its beer tastes significantly different from Miller Brewing Company's beer and that its marketing colours and logo are also significantly different. Required: Examine the legal principles and issues that will be considered as part of both lawsuits and the likely result. Could MBB have avoided the problem by marketing the product as "Molly's Great Draft"? Would Aunt Molly's consent be required?

Problem 4

Katco Inc. has further legal problems. Andrew, who was in his final year as a Brock co-op student had commenced work with Katco Inc. on January 1st and was to continue working until May 31st in order to complete his final co-op term. Katharine was distressed that Andrew regularly came to work wearing sweat pants, t-shirts and hoodies, which she considered to be unacceptable attire and she complained a number of times. Andrew told Katharine that he did not understand her problem since he was working in front of a computer all day and did not meet any clients. He preferred to be comfortable rather than fashionable. On March 17th Andrew came to work with spiked, coloured hair, two new earrings, flip flops and beach shorts claiming it was his "March Break" outfit. Katharine told him to go home and change and, when Andrew protested, fired him in front of the receptionist and three clients in the reception area. Katharine told Andrew that he was incompetent, unpresentable and would never become successful because of his attitude. In subsequently discussing the firing with the receptionist, Katharine learned that Andrew: (i) had taken client's files home on weekends to complete work which was a breach of confidentiality rules; (ii) had completed marketing programs for his mother and two cousins during office hours and had not billed them for his services; (iii) had made a copy of Katco Inc.'s graphics software which they had developed and taken it home. Andrew has commenced an action for unjust dismissal and is seeking damages of $85,000.00. He claims that since he cannot complete his co-op accounting term he will not be able to graduate and will therefore be forced to spend an additional year at Brock University and therefore will lose a full year's salary. He also claims that during his time at Katco he felt unsafe and distressed because of Katharine's constant complaints about this clothing. Andrew claims an additional amount of $200,000.00 for mental distress. Psychiatric evidence indicates that Andrew did suffer emotional distress and damage to his self-esteem as a result of the firing and was considering abandoning his aspiration to go into marketing or advertising as a result of Katharine's comments. The psychiatrist was unable to provide an opinion as to whether the work environment was toxic or unsafe. Required: Outline the issues which will be raised by the parties and the outcome of the action. Be certain to explain the applicable principles and their relation to the facts of this case.