Business Law
Contracts Case Study
The purpose of this assignment is for you to identify and apply contract law to a hypothetical
situation and review dispute resolution methods
Task: You are helping with legal research. In preparing a memo reviewing the issues in Sunita
Sharma’s case, you recognize numerous issues. So, you will select only three (3) distinct
issues. identify and analyze three legal issues in the scenario. Make assumptions and
inferences where you feel they are appropriate and tied to the facts. Your legal analysis will be
included in the opinion letter to the client. While Sunita is an educated, professional client, she
knows very little about the law. She needs you to explain the contract law principles and apply
them to the facts. You will need to provide case law examples to help her understand and
ultimately explain what it means to her. Please choose your language carefully to make it easy
for her to understand the legal concepts and recommendations. I am expecting a memo that is
around 1900 words.
CASE STUDY #2 SCENARIO
Sunita Sharma is a high-end architect and interior designer. She owns a company called YYC
Design Co., which primarily offers architectural and interior design services to commercial
customers. Occasionally, she will take on residential work but only by referral.
She has recently taken on Samantha Lindt and Nabil Youssef as residential clients. She did so
only because Samantha Lindt is the CEO of one of her biggest corporate clients, Fire and Ice
Properties Inc (“F&I”), and it is critical to Sunita’s business to keep this commercial client
happy. F&I has an annual interior design budget of $275,000, and historically, the accounting
department always promptly paid Sunita’s bills when she worked them. Sunita anticipates that
YYC Design Co. will be the interior designer and architect of F&I’s newly acquired building.
Still, the bidding process for the project has not commenced.
Nabil is Samantha’s husband, who has been living with Samantha for about a year. Nabil is a
freelance writer and editor specializing in travel and food writing. Nabil is currently writing
articles for World Travel Guide on Mexico, where Nabil and Samantha first met. Nabil and
Samantha hired YYC Design Co. to change their Canmore condo drastically. Samantha is very
busy and told Sunita that Nabil would make all of the necessary decisions regarding the
renovation and redesign of the apartment. He was the creative one in the relationship anyways.
Sunita worked with Nabil to design an upscale, cozy mountain retreat. While Nabil was
generally cost-conscious, he splurged on a custom-made soapstone gas fireplace to be the focal
point of the living room design. The fireplace had to be pre-ordered from Edmonton, and the
manufacturer required pre-payment before delivery. The manufacturer also had a no-return
policy since the product was custom-made. Sunita explained this to Nabil before placing the
order.
The fireplace, including delivery, costed $9,547. After Sunita’s 30% markup ($2,864.10), the
total quote for the fireplace was $12,411.10. In addition to the fireplace, Sunita quoted $2,585 for
her design work. She also quoted $8,600 for labour, $3,975 for the additional furniture, accents,
and wallpaper, that would be used in the design, and $765 for miscellaneous materials (i.e.
natural gas installation for the fireplace). The full value of the contract was $28,336.10 before
tax.
Both Samantha and Nabil signed the contract (see below). Since the fireplace was not returnable,
the contract provided that payment for the fireplace ($12,411.10. before tax) was due upon
execution of the contract. Trusting she would receive payment, Sunita ordered the fireplace
shortly after the contract was signed. The parties agreed that the interior work would be
commenced once the fireplace arrived. Samantha and Nabil never paid for the fireplace.
The fireplace arrived on October 6, 2022. Sunita could not reach Nabil by telephone the day it
came but left a message telling him that the fireplace had arrived and that he should call her to let
her know when she could start the job. The same day, Sunita also emailed an invoice that
indicated
that $14,996.11 plus tax was due and owing (for the fireplace and the design work that had
already been completed). She addressed the invoice to Samantha Lindt and Nabil Youssef at
their email addresses. She included a note requesting that the couple contact her as soon as
possible so she could get started on the job.
After a week with no word from Nabil, Sunita called and left another voicemail message. The
following day Sunita arrived at work to find a return voicemail message from Nabil.
In the voicemail, Nabil apologized for not calling sooner and said that he simply forgot with all
the commotion of his latest trip. He then said that he changed his mind and, instead of the
fireplace and cabin feel, had hired Modern Talking Ltd. to redesign the interior to reflect an edgy
and contemporary look with ceiling-to-floor bookcases, dark colors, and a zen garden inside. He
concluded by saying that he was on his way to the airport and would be out of the country again
for the next month but that he would be willing to pay to ship the fireplace back to the
manufacturer.
Sunita is extremely upset. However, she does not want the conflict to adversely affect her
relationship with Samantha and F&I. This is the first time she has faced a similar situation, and
she is unsure how to proceed. She believes she has rights under the contract but must mitigate
her losses, but she does not know what that means.
She has contacted the fireplace manufacturer to see if it would accept a return of the fireplace.
The manufacturer advised that it would not accept a return under the terms of the sale. However,
after inspecting the fireplace on October 10, she noted that it was missing a crucial part, without
which it would not work.
Sunita would prefer to get the contract’s total value but is also willing to forego some of it to
ensure the relationship with Samantha and F&I is unaffected. She is also interested to know her
options regarding the fireplace. The terms and conditions of Custom Fireplaces Ltd. are attached.
