BUSINESS LAW 402
This is your midterm examination. It is worth 20% of your final mark. There is only one question
with multiple parts. Your answer to one part should not necessarily dictate your answer to
another. You are to answer in the examination booklet. You may use any form of answer you
choose, i.e. essay style, point form etc. You may use any writing implement of your choice.
The important thing in answering the questions is that you provide me with as much as you
can in the way of the legal principles that apply to the cases. The “right” answer is not the
important thing. The legal arguments to support your answer are what I give marks for.
Cynthia and Patty were tenants in small house near the University. The landlord they have
always dealt with is called Brian, who says he represents the owners. They originally had a
written lease agreement, but the agreement expired in May, 2013. Brian keeps saying that he will
sign a new one with them but he never gets around to it. Cynthia and Patty have been paying rent
of the same amount as the old contract required ($1,200.00 per month) and regularly request the
written lease renewal. They have also been asking for some repair work to be done as Brian had
said he would months previously. Brian never gets back to them although he does cash their
cheques. The appliances do not work well and various other things needed to be repaired or fixed
up. Cynthia and Patty have in the past often not waited for the landlord to fix things, but have
had minor repairs done themselves. They deduct the amount of the bill from the rent. They have
fought with their landlord over this, but they have still done it multiple times. They have also
done a number of home handyman type projects such as installing new light fixtures, re-facing
kitchen cabinets and adding new hardware throughout the kitchen and bathroom.
Suddenly on December 2 , st,3, Brian tells them that their rent is increased to $2,000.00 a
month starting January 1 2014 and that if they don't like it, they can get out. When they object
and refuse to pay, he serves them with a