Question #2, Total Marks: 26 Tom and Cindy decide to set up a business delivering consumables to locations in the Medicine Hat area - both Tom and Cindy contribute money to the venture, play key roles in the management of the business and think that it will be very successful given the current business environment. Shortly after rolling out their marketing campaign, they get a call from Judy; Cindy takes the call and begins their first negotiation. Cindy finds out that Judy is acting on behalf of a small arts supply distribution company, Artworks Warehouse Ltd. (Artworks) and Artworks is looking for a service provider to distribute art supplies to clients in southeastern Alberta and southwestern Saskatchewan, including the Medicine Hat area. During the negotiations Cindy meets with Judy on several occasions and one of their meetings has taken place in Judy's office at Artwork's offices in Medicine Hat. During that meeting Cindy noted that Judy's office had her name on it and the corporation's directory identifies Judy as the Senior Vice President in charge of purchasing. Also, at Cindy's first meeting with Judy, Judy handed her a business card with her contact information on it under the Artwork's company logo. After about a month of negotiations, Cindy and Judy enter into an agreement under which Tom and Cindy will deliver Artwork's supplies to their clients in the Medicine Hat area. Page 7 of 8 Unfortunately, Cindy's naivete coupled with Judy's superior experience has resulted in Cindy entering into a contract that she and Tom cannot handle and they soon have to breach the agreement. Artwork's reputation is hamed as a result of the failure to provide the timely delivery of the art supplies and Artwork's suffers considerable losses; to recover its losses, the company sues Cindy and Tom. Cindy is quite concerned as the she has virtually no personal assets and the losses alleged by Artworks greatly exceed the money that she and Tom contributed to their business. a. Identify the type of business association which describes Tom and Cindy's venture and discuss: i how the breach of the delivery agreement (presuming that liability is established) may affect Tom's liability for Artwork's losses. Include any applicable legislation in your response, tie the law to the facts and draw a conclusion (10 Marks) it how Cindy's actions as they relate to entering into the agreement with Artwork, while working on behalf of their business, may bind Tom, consider the Cindy's authority and her position in their venture in your answer. Include any applicable legislation in your response, tie the law to the facts and draw a conclusion (10 Marks) Question #2, Total Marks: 26 Tom and Cindy decide to set up a business delivering consumables to locations in the Medicine Hat area - both Tom and Cindy contribute money to the venture, play key roles in the management of the business and think that it will be very successful given the current business environment. Shortly after rolling out their marketing campaign, they get a call from Judy; Cindy takes the call and begins their first negotiation. Cindy finds out that Judy is acting on behalf of a small arts supply distribution company, Artworks Warehouse Ltd. (Artworks) and Artworks is looking for a service provider to distribute art supplies to clients in southeastern Alberta and southwestern Saskatchewan, including the Medicine Hat area. During the negotiations Cindy meets with Judy on several occasions and one of their meetings has taken place in Judy's office at Artwork's offices in Medicine Hat. During that meeting Cindy noted that Judy's office had her name on it and the corporation's directory identifies Judy as the Senior Vice President in charge of purchasing. Also, at Cindy's first meeting with Judy, Judy handed her a business card with her contact information on it under the Artwork's company logo. After about a month of negotiations, Cindy and Judy enter into an agreement under which Tom and Cindy will deliver Artwork's supplies to their clients in the Medicine Hat area. Page 7 of 8 Unfortunately, Cindy's naivete coupled with Judy's superior experience has resulted in Cindy entering into a contract that she and Tom cannot handle and they soon have to breach the agreement. Artwork's reputation is hamed as a result of the failure to provide the timely delivery of the art supplies and Artwork's suffers considerable losses; to recover its losses, the company sues Cindy and Tom. Cindy is quite concerned as the she has virtually no personal assets and the losses alleged by Artworks greatly exceed the money that she and Tom contributed to their business. a. Identify the type of business association which describes Tom and Cindy's venture and discuss: i how the breach of the delivery agreement (presuming that liability is established) may affect Tom's liability for Artwork's losses. Include any applicable legislation in your response, tie the law to the facts and draw a conclusion (10 Marks) it how Cindy's actions as they relate to entering into the agreement with Artwork, while working on behalf of their business, may bind Tom, consider the Cindy's authority and her position in their venture in your answer. Include any applicable legislation in your response, tie the law to the facts and draw a conclusion (10 Marks)