Tomis Vice-President for business development atSchadenfreude Recreation Inc. (SRI).SRIsendsTomto Asia for 6 months to meet with suppliers to develop and acquire new products forSRI.Tommeets with dozens of companies and tests numerous products. One product, a hair restoration cream, proves to grow hair on bald Orangutans. Tom recommends to the Board of Directors thatSRIbuy the distribution rights for the cream for Canada and the United States.Theydeem the US rights too expensive but authorize Tom to buy the rights for Canada for $2 million.

Tom negotiates the purchase of the distribution rights for the Cream from an Indonesian company, owned and controlled by Tom's brother in law Robert. Tom and Robert never liked each other and neither did each other any favors.Tompurchases the distribution rights for Canada for $2.5 million forSRI. Seizing on the opportunity, he incorporates his own company and purchases the rights to distribute the cream in the United States for $5 million.

Question23

What should you conclude from the fact that Robert is Tom's brother in Law?

a.

Tom is legally justified in negotiating with Robert as long as he declares that Robert was his brother in law after the purchase.

b.

Tom needed to declare that Robert is his brother in law and SRI should decide whether Tom could negotiate with Robert;

c.

Tom is legally justified in negotiating with Robert because no favors were exchanged;

d.

Tom is forbidden from negotiating with Robert even if no favors were exchanged;

e.

Tom is legally justified in negotiating with Robert as long as the purchase is the best deal for SRI;

Question24

SRI reprimands Tom for overpaying for the Canadian Distribution rights but ultimately accept the contract. The Cream has $10 million in sales in Canada in the first year. Tom's company has $50 million in sales in the U.S. Which of the following best describes SRI's rights regarding Tom's acquisition of the US distribution rights?

a.

The US distribution rights are a business opportunity which belong to SRI even if SRI rejected them;

b.

The US distribution rights are a business opportunity which belongs to Tom because SRI did not have a Patent or Trade Mark;

c.

The US distribution rights are a business opportunity which belongs to Tom because he is not a mandatary.

d.

The US distribution rights are a business opportunity which belong to SRI because SRI rejected them;

e.

The US distribution rights are a business opportunity which belongs to Tom because he developed it;

Question25

Which of the following cases is most relevant to the Tom's acquisition of the U.S. distribution rights?

a.

Canadian Aero v. O'Malley;

b.

Wong vs Leung;

c.

Dr. Dowell v. Notary Hay-Ellis;

d.

Martha Stewart case.

e.

Peso Silver Mines v. Cropper;