Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This is relevant to contract law ----------------------------------------------- The Red Bus Limited (RB Ltd) had decided to negotiate a merger with another bus company, the Coast

This is relevant to contract law

-----------------------------------------------

The Red Bus Limited (RB Ltd) had decided to negotiate a merger with another bus company, the Coast 2 Coast (C2C Ltd) Limited. At the first meeting, RB Ltd stated that the merger was needed to improve its performance and that it was very important to see a true statement of C2C Ltds accounts in order to make a decision. In response, C2C Ltd said it would bring its accounts up to date to show how well the company was performing. The accounts presented for 2017 showed a net income of $66,000 prior to tax. C2C Ltd further stated that based on the figures presented they would make a profit of $25,000 for the year ending 31 March 2017. Convinced that the profit would allow the company to increase the number of buses and expand the business, RB Ltd agreed to the merger. On 31 March 2017 the final statement of accounts for C2C Ltd showed a $50,000 loss instead of the $25,000 projected profit. C2C Ltd did not reveal that it was technically insolvent and intended to stop its operations if negotiations with RB Ltd were unsuccessful. RB Ltd has alleged that the forecast for 31 March 2017 was inaccurate. The representative from C2C Ltd has emailed a reply that the statement was merely an opinion about future performance. RB Ltd has a claim for damages and needs a remedy for the problem that has arisen.

Based on the facts given, advise RB Ltd why you believe that you will be able to argue a successful case on their behalf.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Theory And Practice

Authors: C. William Thomas

1st Edition

0534013880, 978-0534013882

More Books

Students also viewed these Accounting questions