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COMMERCIAL LAW OPTIONAL PRACTICE FINAL EXAMINATION MARCH 2013 PLEASE HAND IN A HARD COPY TO DEBRA HARRIS IN HA 360 ANY TIME BEFORE APRIL 20TH WORTH: 3% TOWARDS CLASS PARTICIPATION Instructions: (a) Identify the legal issues raised in the questions. (b) Then discuss these issues, incorporating into the discussion, the relevant materials studied in the course. The source of any legal principles stated should be identified. (c) Attempt to resolve each problem into a solution, although the method and reasoning are more important than the conclusion reached. (d) Facts not stated may be assumed but the necessity for making the assumptions and their relevance should be clearly established in your answer. (e) This examination is designed to reveal skill in recognizing legal problems, understanding of materials studied in the course, and the ability to use those materials in handling new situations. (f) “Dividends” are to be reaped from well-organized, well-reasoned and complete answers.
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QUESTION 1: While walking home from classes, tired and weary, Paul saw a “For Sale” sign in one of his favorite chocolate shops. He stopped in, and was greeted by George, the long-time owner. The addicting smell, and the sample of chocolate Paul ate, made Paul think that this could be the business of his dreams. After a brief discussion, George gave Paul a copy of the financial statements for the business, which Ace Accountants, a firm of chartered accountants, had audited for the September Annual General Meeting. Paul quickly scanned the materials and saw that the business appeared profitable, and that if he acted quickly he could reap the profits of Valentine’s Day and Easter. He bought the business through Never Too Much Chocolate Ltd. in which he was the sole shareholder. He left the storefront sign as “George’s Chocolates” and decided to continue to use George’s stationery until it ran out. Sales were good for the first few months, but suddenly Paul realized that the profits were not meeting his projections. After examining the financial statements, Paul located two areas of concern – a rent increase, and the drop in revenue due to lower receipts from American buyers due to the higher Canadian dollar, neither of which had been reflected in the audited statements, and both of which had had a continuing negative financial impact dating from the previous February. Together these two items meant that the business had not been profitable, and had in fact lost $20,000. It is now May and Paul wants to get out of the business.
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  • Spring '10
  • elaine
  • Law, legal principles, b2u

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