Reference no: EM133583044

A group of high school friends want to start a cookies business in Canada but not sure how or where to start. None of them has any previous business experience. There is also a shortage of money so all seem to agree that they will need to do most of the tasks needed themselves.

During a friendly and casual discussion, one suggested that the group should start the business in Ontario and then, based on how things go, they might expand it to other provinces. The group is planning to bake their cookies using the finest of organic ingredients including organic dough. Organic ingredients however are pricey. For this reason, one casually pointed out: "No worries, we could claim that we sell organic cookies, even if this is not exactly accurate". Yes, a second suggested: "We could even claim that a Canadian celebrity has endorsed our cookies. It is a kind of free marketing". Here, a third group member got too excited and pointed out: "We are going to be rich. Even if we cannot fulfill the contracts we sign, you can blame it on me. I am, after all, just a 16-year-old boy. But I have one condition, if we expand, we only employ young people. I do not know how to deal with elderly people". "This is not a problem," the fourth added, "We can add this clause when we draft our first contract".

The group understands that anticipating and avoiding legal challenges is a must if they were to be successful in their business endeavour. So, after having their laugh, the group decided to ask you as an "expert" for advice.

In addressing this case, students will critically analyse and apply concepts related to the Canadian legal system, tort, professional liability and contract law (units 1-5) to address the following:

1. What are the major requirements of a valid and enforceable contract in Canada? Remember, one of the group's members is a 16-year-old boy.

2. Assuming the group will start the cookies business in Ontario, what legislation covers this contract?

3. The group does not like to go to court to sort any potential litigations, what should they do?

4. Can this group of high school friends be bound by an employment agreement?

5. Is it acceptable for one contracting party to encourage another not to fulfil his/her contracting duties?

6. What are some of the legal ramifications the group might face if one of the group's members pretended that a Canadian celebrity has endorsed their cookies?

7. Finally, the group asked you to help them getting some funding. You really want to help but you are not qualified in finance. What are some of the ramifications of providing incomplete or misleading information by an expert like yourself?