Bora, a contractor, was looking to purchase a significant quantity of wood for upcoming construction projects. He went to a store owned by a company called "The Woods Ltd." There he chatted with a salesperson, Malcolm. Malcolm was authorized by The Woods Ltd. to negotiate with customers but was not authorized to sell lumber at less than $1,000 per board-foot. After some discussion, Malcolm, keen to close the deal, agreed to sell Bora the lumber he needs at a price of $950 per board-foot.

(a) Will The Woods Ltd. be bound by the contract entered into by Malcolm? Why or why not? [3 points]

Bora ends up buying $30,000 of wood from The Woods Ltd., but it turns out that the wood sold to Bora is rotted/defective. He goes back to The Woods Ltd., but they refuse to give him a refund.

(b) What kind of claim could Bora bring against The Woods Ltd. and what do you think about his chances of success? [2 marks]

Bora has heard around town that The Woods Ltd. is in severe financial difficulty. It turns out the rumours are true. The Woods Ltd. owes $900,000 to its creditors and it only has assets amounting to $500,000. Despite this failed venture, The Woods Ltd.'s two shareholders, Sheilah and Morris, are still doing quite well for themselves.

(b) Bora instead decides to bring an action against the two shareholders of The Woods Ltd., Sheilah and Morris. Discuss the law and Bora's chances of success in this lawsuit. [2 points]

(c) Discuss The Woods Ltd.'s legal options for dealing with its current financial difficulties. [3 points]