Hide Assignment Information

Group Category

Case Study Groups

Group Name

Group $7$

Instructions

Business Law

BUS$2010$

$$SIDNEY & NANCY$$

Instructions:

$1.$ This assignment is to be completed in groups of $3-5$ students. Each group is required to work independently from the other groups and to submit only its own work.

$2.$ Read the attached case and answer the questions that follow. Marks for each question are as stated.

$3.$ Answers must be word$-$processed. Spelling, punctuation, and grammar count and will be marked. Include a cover page with case title, course and section number, my name, the date and the names $($and section numbers$)$ of the members in group.

$4.$ It is a requirement of this course that every group member actively

contribute to this group project. Students who contribute nothing or very

little to the group effort should expect to receive a mark of zero on the

project. Students who contribute only a minimal amount to the group

should expect to receive a maximum mark of $55\%.$ Such a determination is at the sole discretion of the instructor.

$5.$ The best answers will demonstrate that the group has preformed research beyond the textbook and class handouts where necessary.

$6.$ This assignment is to be done in two parts. Part one is worth $10\%$ of the course mark. Part two is worth $15\%$ of the course mark.

$7.$ The answers will be submitted both electronically through eConestoga and in hard copy to the office of the instructor on or before the due date. Any submission that shows an inordinate similarity to another document may be given a $0$ and may be considered plagiarism.

$8.$ Each group will also complete a Student Contribution Report for each part of the

assignment and submit it when the assignment is handed in$.$ Each member of the group must participate in the preparation of the report and sign the second page of the document.

THE CASE

Sidney Greenwood and Nancy Fitzgerald had worked for National Business Systems, an international computer repair service, for ten years. It therefore came as a surprise when they both received lay$-$off notices on a Friday afternoon late in December $2020.$ Both were given severance packages that matched their seniority so they decided that this might be a good opportunity to launch their own business repairing computers and related equipment for businesses in their community. Both were single, so no one else would be affected if the business failed. Sidney had graduated from a community college with a diploma in computer technology while Nancy had left high school after grade twelve, having taken several business courses prior to graduating.

They decided to establish a partnership and to call their firm Compact Business Systems, closely resembling a large successful firm in another city called Compaq Business Systems. Since they had no plans to expand their business beyond their own community, they did not think that the similarity in names would pose a problem. In fact, Sidney and Nancy so admired the colours used in the Compaq Business Systems$$ logo that they used similar gradient tones of red on all their signage and advertisements. Sidney and Nancy also named their premium same day

service: $$Presidio Service$($a name similar to$,$ but not exactly the same as$,$ one already trademarked by Compaq Business Systems$)$ and this became their most popular standard of service far outselling their three day $$Invest Service.$$

Sidney and Nancy had signed a non$-$competition clause with National when they were hired but they forgot completely about that and did not consider it at all. All employees of National were required to sign a non$-$competition covenant stipulating that they would not work for a competitor or start up a competitive business within three years after leaving National Business Systems. There was no geographic restriction contained in the non$-$competition clause, as National Business Systems had customers all over the world.

In considering their start up costs, the pair determined that they would need a small shop to conduct their business from, some testing and repair$-$equipment, a modest inventory of electronic components and a delivery van to pick$-$up and return equipment they would repair. They would also need to do some advertising in the local newspaper to get their name in front of the public.

Pooling their resources they found they had a shortfall in start$-$up capital of about $$50,000.$ Because neither Sidney nor Nancy owned a home or had any major assets, the bank would not lend them the money without a guarantor. Nancy$$s uncle Fred was fairly well off and agreed to sign a continuing guarantee for the necessary funds, insisting that $$$$50,000$ was as much as he was prepared to $$be on the hook for$,$ so they better make do$.$ This limitation however, was not written into the agreement with the bank, nor was the bank made aware of it$.$

Compact Business Systems opened for business on March $1,2021.$ In the first couple of months after start$-$up the business was