Reference no: EM133192510

INSTRUCTION:
As in the assignments and midterm, your task is to identify the most important legal issues and elaborate on them to the best of your ability. As before, think of this examination as a "Where's Waldo" challenge where your job is to find the main legal issues. Correct identification of the issues is worth 50% of the grade. The remaining 50% will be based on the quality of your elaboration of the issues and explanation of your position using the course materials.

Your word count should be around 1500 - 2000 but this is a rough guideline.

You must identify at least 5 bona fide legal issues and elaborate upon them. You can add issues if you see more. This will count for additional marks if you are correct. The tort issue is from the last term, incidental and not an issue per se for this exam, so don't dwell on it but instead focus on the resulting issues covered in Lectures 7 to 12.

PROBLEM:
Ray, Jay and Kay (RJK) are a partnership that produce technical writing for its clients. The three partners are all technical writers, but Ray has semi-retired as of December 31, 2021, and has verbally agreed that he is only to get 20% of the profits in 2022. He intends to work 2 days weekly. Jay and Kay agree verbally that they will split the remaining profits 40/40.

Ray is approached by World Health Help Centre, (WHHC) which is incorporated under the Canada Not for Profit Act. Its mission is to refurbish used medical devices for sale at a reduced price to the developing world as well as to hospitals in Canada. They ask Ray to do some of the technical writing for the operational manuals that accompany their refurbished devices. He is a volunteer and does not get paid for this work.

Ray spends all of his spare time on the project for WHHC and advises WHHC that RJK will stand behind the accuracy of the writing. Unfortunately, Jay and Kay have no knowledge of this. Ray makes a serious mistake in the instruction manual produced for a refurbished ultrasound machine, the result being that technicians and doctors at a hospital in Vancouver miss a cancer diagnosis and the patient, Hector, dies because of the missed diagnosis. The hospital releases Hector's patient information to WHHC to warn them about possible litigation in the future.

Hector's family sues the hospital and WHHC and WHHC third parties Ray, Kay and Jay individually. The claim is for $ 1 million. WHHC has insurance but the deductible is $500,000.

WHHC's board meets to discuss the case. They have generated a surplus of $750,000 over the past year but decide they cannot distribute the entire surplus to the members because of the $500,000 lawsuit. They hold back $500,000 in case they lose the litigation and distribute the remining surplus of $250,000 as a dividend.