ASSIGNMENT INFORMATION

Centre for Business

School of Management

Business Law

LAW1011

Professor: Sarah Levy

Assignment #2

Due: 11:59pm August 10th 2022

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Instructions

This assignment asks you to answer 5 short answer questions based upon the
following fact pattern:

Ted’s Fruit Wholesalers sold several hundred pounds of fruit to Caroline’s Cider
House Ltd. After several months, Caroline’s had still not made payment on its
purchases. Caroline’s, did not dispute its liability. Caroline, “the controlling
mind, sole officer, and director,” explained that Caroline’s simply could not pay
the bill. Caroline claimed that Ted’s contract was with Caroline’s Cider House
Ltd. And not Caroline.

For one of the questions, you are to reference the case E.M. Plastics v. Abby Signs
and Lardeur, 2009 BCPC 18 in your answer. You will find the case summary
posted with the assignment instructions on BlackBoard.
This assignment is worth 15% of your final mark. Each question is equally
weighted at 20%. All answers should be typed, in full sentences and 1.5 spaced.
You will be graded on the quality of your writing and reasoning.

Each answer should be between 150-300 words. Focus on what is asked of you in
the question. All answers will be evaluated based upon the rubric that has been
posted to Blackboard.
All assignments are to be submitted via Blackboard.

This is an individual assignment. Your answers must be your own work (see:
https://coned.georgebrown.ca/policies/plagiarism-academic-honesty/) No direct
quotes or citations should be used in your answers. If you choose to quote a
case, please limit the quote to one sentence, and be sure to cite the case
appropriately after by putting the case name in brackets afterwards. Aside from
this, everything should be in your own words.

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Questions

1. Review the case E.M. Plastics v. Abby Signs and Lardeur, 2009 BCPC 18,
which is included with your materials for this assignment. After reading the case,
answer the following question:

Is Ted’s Fruit Wholesalers v. Caroline’s Cider House Ltd. a case in which the
Court would pierce the corporate veil? Your answer is to be one or two paragraphs
in length, and you should demonstrate that you understand the reasoning of the
court in E.M. Plastics. As well, your answer should be supported by one other
resource, which must be a Commercial or Business Law Textbook.

2. Under what circumstances would Caroline be liable for the debts of Caroline’s
Cider House Ltd.? Would there be a difference in terms of liability if the business
was structured as a sole proprietorship or as a general partnership? Your answer
should be

by a Commercial or Business Law Textbook.

The following questions are to be answered and supported by a Commercial or
Business Law Textbook.

3. What is meant by a corporation’s having a separate legal identity?

4. If two people enter into a business together with the object of making money but
lose it instead, can the business still be a partnership?

5. Partners have fiduciary obligations to each other. Explain what this means and
give examples.

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DEVELOPMENT:

1. According to the information of this case, I think that due to various factors
presented, the court must lift a corporate veil. A decisive factor in thinking
this is the fact that the manager of Caroline Siders House, defaulted on the
goods purchased from TedFruit Wholesalers.

Another important factor is that Caroline says she has no personal debt with
Ted but the company she runs (Caroline Siders House) does have a debt with
Ted Fruit Wholesalers, thus attempting to separate the identities of the
owner and the company. As there are no more directors in the company to
collect the debt with Ted, it is necessary to ask the owner to comply with
said payment

2. Caroline is the only director of Caroline Cider House; therefore, she is

responsible for fulfilling any obligation acquired by the company. Watson,
2019 says that when you are the sole owner of a company, the owner incurs
the costs and benefits of said company, therefore, since Carolina is the sole
owner, she must bear the costs of her company.

If the company were co-owned by more people, the payment of the debt
cannot be the responsibility of Carolina, but that amount must be divided
among all the co-owners (Watson, 2019).

3. According to the case of E.M. Plastics v Abby Signs and Lardeura,

Corporate Legal Identities are recognized by law for having their own legal
existence, which is summarized in that a company may have rights in which
its owners cannot intervene once the company has the legal identity.

4. When two people are together in a business which instead of generating

profits is generating losses, it is still a partnership because the partners share
both the losses and the profits. In a partnership, the owners or partners share
profits and losses equally. On the other hand, this does not exonerate the
responsibility of each of the company's partners to fully comply with each of
their obligations, as in this case the payments owed.

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5. Having fiduciary obligations in a company means that each of the partners
must proceed correctly and reliably when managing each of the company's
resources, they must always work watching over and seeking the common
interest which promotes said company, make decisions seeking the
collective benefit and dividing the profits equitably among the contributing
partners.
On the other hand, failure to comply with the duties will result in the
obligation of the responsible partner to pay the other partners for the losses
or gains resulting from said breach.