Provide a couple paragraphs piece arguing for and against or when applicable to potential responses. 1. Hopkins Steel Ltd. was a long-established corporation operating in Ontario. A few years ago it decided to change its bank and moved its account to the Canadian Business Bank. Before accepting the account, the bank made various inquiries and, in particular, examined the audited accounts of Hopkins over the preceding three years. The accounts showed a consistent record of profitability, growing steadily over the years. With this information the bank agreed to extend a line of credit to Hopkins and, over the following year or so, made advances to it totalling more than $2 million.

Shortly thereafter, Hopkins ran into serious trouble and eventually was forced into bankruptcy with debts in excess of $2 million.

The bank brought a claim against Cross, Jones, and Sparrow, the accounting firm that had audited the annual accounts of Hopkins during the years in question. The bank claimed that the accounts for the preceding years, which it had examined before granting the loans, were inaccurate and had been negligently prepared and that Hopkins was already in serious trouble before the bank accepted it as a client.

In each case, the audited accounts contained the following statement:

We have examined the balance sheet of Hopkins Steel Limited as at [date] and the statements of earnings, retained earnings, and changes in financial position for the year then ended. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests and other procedures as we considered necessary in the circumstances.

According to the evidence, during the years in which Cross, Jones, and Sparrow provided services to Hopkins, it also from time to time provided further information with respect to Hopkins to third parties, such as creditors and a bonding insurer for the company, and provided Hopkins with a number of copies of its financial statements and audit reports.

Does the bank have any claim against the accounting firm? 2. Waymart Ltd., a full service department store, introduced a customer rewards program to encourage loyalty among shoppers and increase sales of low volume products. The program allowed customers to accumulate "W dollars" with each purchase at the store; these dollars could be redeemed toward purchases of select items. The bottom of each customer receipt states its W dollar value, and customers simply bring the receipt to the store and "spend it like money."

Every Monday, the store manager designates slow-moving products eligible for purchase with W dollars. Eligible products vary weekly depending upon which items have not sold. The marketing department put together a TV advertisement showing a family enjoying a summer afternoon in their backyard. An eight-person hot tub sat beside new patio furniture while one person barbecued on an expensive grill. The family was eating hamburgers and drinking lemonade from pretty plastic glasses. The caption read "Fulfill your dreams with W dollars."

Susan was planning to buy a $5000 hot tub at another store when she saw the advertisement, so she began collecting Waymart receipts. She bought all her groceries, household, and family supplies at Waymart, as did her mother and sister. Together they collected $3000 worth of W dollars in just four weeks, but she never saw a hot tub in the store. She did see patio furniture and barbecues, but she never saw them marked as eligible W dollar products. She went to the customer service counter and asked about buying a hot tub using her points as part of the purchase price. The clerk told her that Waymart did not carry hot tubs and that the W dollar campaign applied to lower priced items such as groceries and dishware.

Can Susan sue for breach of contract? Give reasons for your opinion. What could Waymart have done differently to protect itself from this legal risk? 3. John Gifford and his friend Karl Holtz were enthusiastic followers of the commodities market, the market in which such products as wheat, cotton, tobacco, and coffee are bought and sold for future delivery. However, they did not have sufficient capital to engage in the market themselves, and so they played a game: They would "buy and sell" futures in various commodities under three-month contracts for delivery and then "settle" their fictional gains and losses on the delivery date. Karl did very well in the game and over a two-year period "earned" over $100 000 at John's expense.

One day John finally said to Karl, "I think I have a real winner here: The price of coffee is going to rise sharply in the next three months. At what price do you want to sell to me?"

Karl disagreed with John's prediction and replied, "I'll sell you $20 000 worth of coffee at today's price. The price is going to drop, and you'll lose as usual."

"For once, not only am I right, but I'm prepared to back up my words. Are you?" asked John. "Let's make this a real transaction. If the price goes up, you pay me the difference. If it goes down, I pay you."

"Okay, it's your funeral. It's a deal," Karl replied, and they shook hands on it.

Three months later, the price of $20 000 worth of coffee had risen by 30percent, making John richer by $6000. When John demanded payment, Karl said he didn't have that much in the bank but grudgingly gave John three cheques for $2000 each, one payable immediately and the other two postdated one month and two months, respectively.

John cashed the first cheque at Karl's bank at once. A month later, he used the second cheque to buy a used car from Grace Bukowsky. She has not yet presented it to Karl's bank for payment. John still has the third cheque.

Karl has heard from a friend studying law that the whole transaction might be "illegal." Give him your opinion with reasons. 4. Paul, a third-year university student, was in the habit of selling his used textbooks at the conclusion of each term. He usually recouped about 50 percent of their original cost. Unfortunately, when he posted his accounting textbook for sale online, he quickly discovered that a new edition of the book had been published, and there was little interest in his edition. He contacted the publisher using a fictitious name and requested a sample copy of the new edition. He told the publisher he was an accounting instructor considering adopting the book for a new course being introduced at the university. As a result, the publisher agreed to supply a copy of the new edition, provided that Paul paid the shipping cost and agreed to review the book for the publisher. Paul agreed. When Paul received the sample book, he promptly posted it for sale online. Joan, a second-year student at another university, was happy to purchase the new edition for 75 percent of the bookstore price. When Joan accessed the textbook website using the code provided with the book, the publisher became aware that the book was in the hands of a student and not an instructor. The publisher never would have agreed to release the book to a student without payment of the full list price. The publisher blocked Joan's access to the textbook website and demanded she return the book. If the matter goes to court, will Joan have to return the book? Why or why not? What recourse will Joan have against Paul?