Situations for Discussion

1.Trackers is a manufacturer of steel tracking, which is used by customers in a variety of applications. Trackers' business is booming, and its scheduling is tight for meeting delivery commitments. Trackers is contacted by a representative of Coasters, who inquires whether Trackers is capable of providing track for a special roller coaster in Florida, and if so, what price Trackers could offer and when it could deliver. Trackers knows that Coasters is a leader in the industry and would be a valuable customer. What factors should Trackers consider before responding to the Coasters inquiry? What are the risks and benefits of agreeing to fill Coasters' order?

2.Jason, the owner of a furniture store, is thinking about hiring an independent contractor to do deliveries for him. If the individual contractor proves unreliable, Jason is, of course, entitled to sue to recover his losses. How does inadequate performance by the independent contractor put Jason at risk and how can that risk be reduced? [footnotes deleted]

3.Melissa, an accounting student, interviews for a job with two firms. She really wants to work for Firm X but gets an offer of employment from Firm Y first and accepts it. A week later she receives offer from Firm X, which she also accepts. She does so because she believes she is economically better off with firm X and will be able to "cancel" her acceptance with Firm Y.

a.What is Melissa's legal situation now?

b.Even assuming that she is better off economically by joining firm X, what other costs does she face?

c.Do you think that Firm Y will sue Melissa for breach of contract because she has accepted an employment offer elsewhere?

d.What could Melissa have done to prevent this situation from occurring in the first place?

e.What should Melissa do now?

4.Samantha Jones entered into a contract with Jason Black to act as a contractor for a new house she is having built. She was anxious to have the house built as soon as possible, and upon receiving Jason's estimate that the work, including labour and materials, will cost $250 000, she immediately paid a $50 000 deposit. However, since receiving Samantha's deposit, Jason has been contacted by a developer who is willing to pay him a significant amount more to work on a new housing development, provided that he begin immediately. Jason does some calculations based on the current market. He decides that the amount the developer is offering is enough that he can afford to return the deposit, compensate Samantha for breaching the original contract, and still come out ahead on the development contract. He lets Samantha know that she will have to find a new contractor and begins work on the housing development. When he calls Samantha a few months later to offer her compensation, she informs him that she has finally been able to hire a new contractor, but that the estimate for the work has now doubled. In the intervening months, the costs of labour and materials have skyrocketed. The house that originally would have cost $250 000 will now cost her $500 000. Do you think that Jason should be responsible for the additional costs of building Samantha's house, even though they very much exceed his original estimates?

5.Mr. Leopold applied to his provincial government for a student loan and was advanced $13 500. The loan agreement obligated the government to advance further funds midway through the school year. Mr. Leopold stopped attending classes in September for medical reasons but did not advise his university's Student Services Office of this, contrary to a term in his loan agreement. He also used the funds for living expenses instead of for tuition, contrary to the loan agreement. The university determined that Mr. Leopold was not eligible for the second installment of his loan, and the government therefore refused to advance it. Mr. Leopold sued the government for breach of contract and sought damages in the amount of $1.5 million. Do you think Mr. Leopold's action should be successful? Why or why not?

6.A 22-year-old Grande Prairie man was shocked to receive an $85 000 cellphone bill from Bell Canada. The reason for the high cost was that the customer had been using his cellphone as a modem for almost two months. In one month alone, he downloaded what amounted to 10 high-resolution movies, according to Bell. The customer contended that he did not realize what the cost would be to use the modem system and that Bell should have alerted him as his cellphone bill began to climb precipitously. Bell acknowledged that accessing the modem services is costly but also emphasized that to do so, customers are required to register online and must agree to contractual terms that show the higher fees. It also admitted that its newly implemented data-usage monitoring system failed to pick up the customer's high usage. In the meantime, Bell has offered to reduce the bill to approximately $4000, but the customer is refusing to pay even that sum. Who is right in this dispute and why? What additional information do you require to answer this question?