Question 1 Finally, Carol and Sidney are ready to open their business. The business is to operate from the May 24th weekend to October 31st each year. The business has ten employees who work as cooks, servers at the "burger pit" restaurant located on the premise, oversee the bungee jumping and steer the white-water rafts.

One of the individuals working for Fearless is Martin. Martin was hired to operate the rafts. A raft operator must be carefully trained as navigating through whitewater with customers can be very dangerous. Carol and Sidney felt they were lucky to land Martin as he was previously been employed for six years by one of their competitors. In fact, they had actively lured him away.

Martin arrived late for work from time to time but the problem was not chronic and Carol and Sidney have never made an issue out of it. However, one night, after working for Fearless for two seasons, Martin showed up late for work and appeared to be somewhat intoxicated. Sidney spoke with him and immediately could smell liquor on his breath. In front of two other staff members, Sydney and Martin had the following exchange:

Sidney: "Martin this is the last straw! Drinking while operating a raft is dangerous and will not be tolerated!"

Martin: "Hey, why am I being singled out? Do you really think that at an outdoor camp, I'm the only staff member who enjoys a drink? Anyway, I am not drunk and can explain the smell."

Sidney: "We are not talking about other staff members. We are talking about you! I want you out of here! Your fired, get out now!

3. Martin is upset. He found the dismissal humiliating. Does he have any recourse? Be sure to address what the courts will consider in awarding any damages he might have suffered. (eight marks) Question 2 Three years after starting Fearless, Carol and Sidney decide to ask Michael to join the business. Michael shares Carol and Sidney's love of the outdoors. They are also attracted by the $50,000 he has agreed to invest in the company. After receiving legal advice, they decide to register the business as Fearless White Water Rafting Incorporated.

The shareholders and board of directors are as follows:

Carol, 40% of the common shares, Chair of the Board and CEO Sidney, 40% of the common shares, Director Michael, 20% of the common shares, Director

The business decides to upgrade the sports equipment, rafts and office equipment required to operate the business.

4. As part of its plan to upgrade its rafts, Fearless enters into a contract with Canada Rafts Inc. to supply four new ultra-light river rafts. It will take Canada Rafts Inc. a month to fully build the rafts. Before the rafts are built, the supplies needed for the construction are no longer available due to an international dispute. The contract between Fearless and Canada Rafts Inc. is (2 marks):

(a) Discharged by agreement as every commercial contract has an implied term that the contract will come to an end if there is a negative regulatory change; (b) Discharged by the doctrine of frustration as an event outside either party's control has made the contract impossible to complete (c) Fully enforceable and Fearless should sue for damages (d) None of the above