Question

(Please help this in a good explanation based on which Canada laws applied in each case, not only short answers)

Sonny Chu is a university student majoring in entrepreneurship and international business. Two years ago, while on a student exchange program in China, Sonny came up with an idea for an Internet business. In China, Sonny had been able to purchase tailor-made silk suits for $250 to $400. The equivalent suits cost $1500 to $1800 in Canada. Sonny believed that he could offer the tailor-made silk suits to Canadians at close to the same price that he had paid for the suits if he could solve the difficulty of having customers take their own suit measurement.

Back in Canada, Sonny worked with a design student, and together they were able to develop a simplified method of taking suit measurements. With this problem solved, Sonny set up a website for his business called “This Suits Me.” The website featured several suit styles, a range of silk fabric swatches, and instructions for taking measurements. Customers could easily order suits by clicking on the style and fabric and sending in their measurements by following the simplified instructions provided.

To handle the Chinese end of the business, Sonny employed Dong Lee, a student he had met on exchange trip. Dong was born in China and is very familiar with the fabric industry, as both his mother and father are dressmakers. His job for Sonny involves purchasing silk fabric, engaging the services of Chinese tailors. The arrangement proved to be very profitable, and, within six months of establishing the website, Sonny was meeting all his sales targets. However, a couple of recent developments threaten the success of Sonny’s business.

Dong agreed to pay $100000 to a Chinese supplier for several bolts of silk fabric. Although the fabric is beautiful and will make wonderful suits, Sonny believes that Dong has agreed to pay too much for the fabric and, further, he does not think that his business can afford the purchase at this time. Sonny wants to cancel or renegotiate the contract. He is also very angry with Dong because Sonny had expressly told Dong he could not enter into any contracts on his behalf in excess of $25000 without getting his permission first.

Sonny has also discovered that Dong has been purchasing fabric and engaging tailors on behalf of some of Sonny’s competitors. When confronted with this information, Dong stated that he did not see any problem with his actions as he had not signed any exclusive representation contract with Sonny.

a) Applying the relevant principle of agency law, identify and discuss the nature of the legal relationship between Sonny and Dong. Discuss whether there has been any breach of duty. (5 marks)

b) Applying the relevant principles of agency law, discuss whether Sonny is bound by the expensive fabric contract Dong entered into with the Chinese supplier. (5 marks)

Answer 1

-    According to organization law, when chief gives an operator an express power, and the specialist disregards the express position, at that point the specialist is considered to have abused their obligation towards their head.

Positively, in view of office law, Sonny and Dong had a legitimate relationship that falls under operator head relationship. This clarifies why Dong had the position to go into buy contracts in the interest of Sonny. Notwithstanding, Dong had an express power that restricted him on the sort of agreements he should enter: he shouldn't enter buy contracts above $25000 without the endorsement of Sonny. Conversely, Dong marked a buy contract worth $100000 with a Chinese provider. Hence, he abused his acquiescence obligation toward Sonny.

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No, Sonny isn't bound by the costly texture contract Dong went into with the Chinese provider.

With an express position that expressed Dong had no authority of Sonny to sign agreements above$ 25000 for the benefit of tune, at that point this implies, in light of organization law, Dong was following up on his own when he marked the costly texture contract with the Chinese provider. Hence, Sonny isn't bound to the agreement and can't be considered answerable for the agreement commitments.

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