QUESTION 1 - Prince, a chartered accountant employed as a controller and living in Calgary, was bored with his job. He applied to an Ottawa-based software company that was advertising for a chartered accountant to help in the development of new accounting software. At the job interview, Paulson, the manager of research and development, described the new venture and told Prince that the position would involve advising on accounting standards for many new products, addressing such things as cash-flow management, inventory controls, accounts receivables, and more. Prince was told that the company would commit significant funds to the project for the next 10 years. This position was the first of many accounting jobs. It was implicit that Prince (if hired) would become senior management, supervising the subsequent hires. Formal plans were still before the executive committee but would be in place before the start date of May 1. This was exactly the type of new challenge Prince was looking for, so when Paulson called to offer him the job of manager, financial standards, Prince accepted immediately. A few days later he received the employment contract by email, signed it, and returned it by courier. The job description said that Paulson would supply accounting expertise as required by the employer. Prince and his wife quit their jobs, sold their house in Calgary, bought a smaller, more expensive house in Ottawa, and moved across the country.

When the executive committee met in April to consider the development plan, they decided the plan was too aggressive and approved only the development of one aspectcash-flow management. The project would be funded for only five months. Prince commenced work on May 1 and helped design the cash-flow software. When he asked Paulson about the next phase, he was told only that it was not firm yet. No other accountants were hired, and after five months, Prince was transferred to the accounting department to do typical controller work similar to his job in Calgary. He was unhappy with the transfer and quit.

Identify the possible causes of action, and assess their chances of success. Would it make a difference to your answer if the contract of employment included a term that the employer might transfer or reassign the employee to another position within the company at any time and a term that said that all agreements between the parties were included in the written document?

QUESTION 2 - Daly, a U.S. citizen, began negotiations with Stevens of Vancouver to investigate and stake mineral claims at the head of the Leduc River in British Columbia. Daly had discovered evidence of deposits there some 20 years earlier.

On January 13, Daly wrote, "A large mining company in Boise is showing an interest. To protect my interest it will be necessary for me to arrive at some definite arrangement soon." Stevens replied on January 17, "Perhaps we can make some arrangement this summer to finance you in staking claims for which I would give you an interest. I would suggest that I should pay for your time and expenses and carry you for a 10 percent interest in the claims." Daly replied on January 22, "Your proposition appeals to me as being a fair one."

Soon after, Daly was called to active duty in the United States Naval Reserve Engineering Corps and was sent to the Marshall Islands. Correspondence continued with some difficulty, but on February 28, Daly wrote, "As I informed you in a previous letter, your offer of a 10 percent interest for relocating and finding these properties is acceptable to me, provided there is a definite agreement to this effect in the near future."

On March 5, Stevens wrote, "I hereby agree that if you will take me in to the showings, and I think they warrant staking, I will stake the claims and give you a 10 percent interest. The claims would be recorded in my name and I will have full discretion in dealing with themyou are to get 10 percent of the vendor interest. I can arrange to get a pilot here."⁴⁴Daly replied on April 12, "If you will inform me when you can obtain a pilot, I will immediately take steps for a temporary release in order to be on hand."

On June 6, Stevens wrote, "I was talking to a prospector who said he had been over your showings at the head of the Leduc River, and in his opinion it would be practically impossible to operate there, as the showings were behind ice fields that, along with the extreme snowfalls, make it very doubtful if an economic operation could be carried on. I now have so much work lined up that I doubt if I would have time to visit your showings and do not think I would be warranted in making the effort to get in there due to the unfavourable conditions. I must advise you, therefore, not to depend on making this trip, and suggest if you are still determined to go in, to make some other arrangements."

Daly did not reply. On his return from the Marshall Islands the following year, he did, however, follow up his interest in the property. He discovered that in July, Stevens had sent prospectors into the area and, as a result of their investigations, had staked claims in his own name and later sold them to a mining development company. Daly brought an action against Stevens claiming damages for breach of contract.

Should Daly succeed in his action? Explain.

QUESTION 3 - 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?

QUESTION 5 - Carter left a position where he was earning $48 000 a year to accept a position as general manager of Buildwell Limited at the same annual salary. All negotiations leading up to his appointment were carried on orally between Carter and Webster, the president of Buildwell Limited. Both parties assured each other in various conversations that the employment would last "for life"; they agreed that each year Carter would receive a bonus, and that if he was not satisfied with it, he could terminate his employment, but that the company could not terminate his employment unless he "did something wrong."

Over the succeeding few years, Carter's salary was increased from $4000 to $5000 per month, and he received, in addition, annual bonuses of up to $4000. A letter to Carter announcing his last bonus was signed by both the president and vice-president of the company and included the words, "And we want you to know that with all the experiences we are going through in connection with the business, your efforts are appreciated."

Shortly afterward, Webster died, and immediately the company dismissed Carter without explanation, paying him one month's salary. Carter then attempted to go into business forhimself but without success. He sued Buildwell Limited for wrongful dismissal, claimingbreach of his employment contract. Can Buildwell Limited successfully plead theStatute ofFrauds?