Case Study Assignment: “Sidney & Nancy” Business Law

There is a valid contract between Compact and International Trade because of the signed agreement from the two parties. Sidney and Nancy called on several of national business systems and persuaded several to switch then business with offers of reduced service charges and faster turnaround. They were particularly proud that they were able to persuade the regional office of international tire Inc. to bring all their computer repair work to compact. On June 1st, 2011 compact business systems signed a three-year agreement with International Tire Inc. terms of the contract included the requirement that compact would repair all international tires computers in timely manner and international would send all its computer repairs to compact during the 3 years period. The contract was Sidney greenwood. Another term of contract required compact to pick up, repair and return the computers within an “average time of approximately 4 business days”.

There was a valid contract between compact and International tire Inc. and the contract was breached. International Tire Inc. had breached the contract. By early November, the average time compact took to repair a computer had slipped from 4 days to 7 or 8 business days. After several complaints from International to compact, International advised compact that it was cancelling the contract because compact had breached a condition of contract. International stopped sending its computers to compact for repair.

After the contract has been breached in addition to that during the last two months of their first year, the economy went from bad to worst. Orders dropped off, suppliers were screaming for payment in full on their overdue accounts, and the bank was threatening to seize the collateral posted as security for their loan. Sidney and Nancy decided that they had enough and decided to declare bankruptcy. Believing that uncle feed was in the clear, it seemed like they had nothing to lose. The bank could go pound salt’. In the week before Sidney and Nancy were to visit their lawyer to discuss the bankruptcy process, they wrote cheques to three of their suppliers whom they felt had treated well and whom they did not want to leave holding the bag. They also arranged to sell off some unused inventory to a discount warehouse for 30% of its original value. In early Jan 2012, they met their lawyer to start bankruptcy proceedings. They disclosed their financial situation, including the most recent loan arrangement they had with the bank. Although the lawyer only gave initial loan agreement with bank a cursory look. The delivery van, which was leased could be returned to the leasing company without any additional costs and they would simply abandon the lease for their building they were using as a workshop.

Sidney and Nancy were fortunate to get a large contract from another tire manufacture-American Tire Corporation-based in Nova Scotia. This contract was a fixed price contract. Sidney and Nancy negotiate a deal that would pay $100,000 per year for 4 years for keeping ATC’s computers working in tiptop shape. The contract contained Sidney and Nancy cost exposure because ATC’s ability to utilize their services was limited to having Sidney and Nancy repair an upgrade a maximum of 1300 computers a year. Both parties executed a contract covering this work. A few days after the contract was signed, Nancy notice that the contract stated that the annual payment would be $10,000 per year. Around thanksgiving 2011, things started to go wrong. Nancy, who had agreed to take care of the administrative end of the business, had fallen behind in paying firms bills and several suppliers were becoming impatient. At the same time, payments were not coming from their customers and Nancy was too busy spending time in chasing the delinquent accounts. Mainly because of this, cash flow was tight.

In this case, I believe Shawna must take legal action against compact because she had a problem with her computer, so she went to get the repair done in compact. Instead of doing what exactly is needed to be changed, the compacts desk clerk advised Shawna that the only way to improve the computer would be for her to purchase compacts deliver upgrade package for $750.00. When her parents returned home and found out how much she had spent to repair the computer her mother called a friend in the computer repair filed who advised her that the repairs should have cost no more than $200. That means she can sue the company for giving her wrong advice and for extra charges made on her. In the court action, Shawna would be the plaintiff as she bought case against compact and compact would be defendant. She will be successful because it goes on company’s reputation.

Shady can successfully sue compact in court for the return of his money because the software did not work after he got his computer home and, he was charged double for each download. Shady will be successful because compact is trying to cheat customers and shady is the third person. Taking money and not giving accurate result to the customers kills the company’s fame in market and it would be great loss for both. Therefore, court takes legal action and shady get positive vibes.

Passing off: Making false representation likely to induce a person to believe that goods or services are those of another.

Here in this issue passing off is related to lucky desktop. On April 15, 2011 one of compacts customers lucky accounting delivered one of its (lucky) desktop HQ computers to compact. Compact was asked to upgrade the computer and install new operating system known as vulnerable. When lucky employee returned to compact, compact informed that HQ computer had been stolen in a break in the night before compact had installed surveillance cameras in the store and there was a sign on the door identifying an alarm company. Compact had stopped paying for alarm monitoring company to save money and surveillance cameras were just dummies. Compact would be defendant and lucky employee would be plaintiff. This could be serious issue because compact is misleading every customer. There would be severe losses to company like the court could charge a fine, or the customer can sue the company or overall company can also be terminated from list.

Tortious interference, also known as intentional interference with contractual relations, in the common law of torts, occurs when one person intentionally damages someone else's contractual or business relationships with a third party causing economic harm. This refers to a situation in which a third party intentionally causes a contracting party to commit a breach of contract. This is done through inducement or by disrupting a party’s ability to perform their contractual obligations. The purpose of tortious interference laws are to enable two or more parties to enter into a contract or business relationship and fulfill their respective obligations without third-party interference. In this case, the plaintiff would be the former company that Sidney and Nancy are working for, the “National Business Systems,” and the defendant would again be Sidney and Nancy. The facts that would support a possible claim for this would be the valid contract that they had with the company that required them to not work for a competitor or start up a competitive business within 3 years after leaving the said company. Moreover, the defendants also have the knowledge about the said contract and the fact that the contract was indeed breached. In this situation, the available remedies would include legal damages and equitable relief wherein legal damages can encompass economic losses, such as lost profits, as well as punitive damages, that are awarded to plaintiffs as a way of punishing malicious wrongdoers. Equitable relief, on the other hand, may consist of an injunctive order preventing the tortfeasor from benefitting from their interference.

Defamation is an issue in this case because compacts good reputation was damaged. Sidney and Nancy were defendants and compact was plaintiff. Because Sidney and Nancy failed to handle the business, their contracts and agreements with International companies were breached. There are no possibilities to protect Sidney and Nancy because they committed many mistakes, one after the other and failed to pay bills. Their shop was also damaged and now they are left with nothing.

Sidney and Nancy gave no thought to the non-competition clause they had signed with national when they were hired. All employees of national were required to sign a non-competition covenant stipulating that they would not work for a competitor or start up a competitive business within three years after leaving national business systems. There was no geographic restriction contained in the non-competitive clauses national business systems had customers all over the world.

Here trespass relates as committing an offense against a person because of how the leasing company has not been given any authority to do the said task of their agent who would just get the truck without anyone from the company has given them the authority. The plaintiff on this case would be the Compact and the defendant would be the leasing company, specifically the person who has ordered the agent to do the task with regards to the truck that they want to sneak out of the Compact’s firm. It was trespassing because the other company was not informed of the said task and the agent has forcefully broken the lock of the firm in order to get in which is considered to be illegal. The most probable outcome or remedy for this would be for the Compact to fix this case on the court because of how the other company has also greatly damaged the firm, which was the only possessions, left of the company.

The steps that Sidney and Nancy did before they went to visit their lawyer to discuss the bankruptcy process was that, they wrote cheques to three of their suppliers whom they felt had treated them well and who they did not want to leave. They then arranged to sell off some of the unused inventory to a discount warehouse for 30% off its original value. They pocketed the cash that they received from the sale believing that they were entitled to it as compensation for all of their hard work. However, on January 2007, they have already disclosed their financial situation, including the most recent loan arrangement they had with the bank. Although the lawyer only gave the initial loan agreement with the bank a cursory look, he assured them the inventory was the only security the bank was entitled to. The delivery van, thus, which was leased could be also returned to the leasing company without any additional costs and they would simply abandon the lease for the building they were using as a workshop. In legal terms, these steps were known to be called as the protective provisions, the suspension of attachments, the settlement of the insolvent person’s estate, creditors, effect of discharge and the preferences and transfers at undervalue.

In the week before Sidney and Nancy were to visit their lawyer to discuss the bankruptcy process, Sidney and Nancy wrote cheque of three of their suppliers whom they felt had threaten them well and who they did not want to leave holding the bag. The legal term used for this would be “Equity”. They also arranged to sell off some unused inventory to a discount warehouse for 30% of its original value. The legal term used for this would be “Liquidation”. They pocketed the cash they received from sale, believing that they were entitled to it as compensation for all their hard work. Legal term used for this would be “Lien”.

Lucky have possible cause of action against compact as the computer was stolen. Theft and fraud can be filed against compact because HQ computer was given to repair, but someone stole it. However, in this lucky might not be successful because the HQ computer was stolen. Neither compact nor lucky had any insurance coverage on HQ computer. Moreover, most importantly the area was under dummy camera surveillance. Therefore, there are no proofs against compact. Nevertheless, lucky can take civil action to get compensation from compact instead of criminal action, or lucky might do this as well as bringing criminal charges against compact. But lucky can only claim compensation from compact if they can prove in court that they are entitled to it. However, unfortunately, there is no proof. The standard of proof is lower in civil courts than it is in criminal courts, so it may be easier for lucky to prove case against compact.