Chad Was the Best Private Detective in the West

question 36

Multiple Choice

Chad was the best private detective in the west. His system for tracking persons who have caused themselves to disappear was markedly superior to that of others. Sally, his only assistant, was considered so valuable that he always had her sign five-year contracts with non-disclosure clauses. Sally took notes at a private meeting between Chad and a representative of the RCMP who was negotiating a contract with Chad for tracking down two criminals. Sally and Chad took care that the discussions were understood to be confidential - regarding both the information from the RCMP and from Chad about his methods. Sally was approached by a competitor of Chad, Mr. Adolph, who offered her three times her salary if she would break her contract with Chad, sign with him, and bring him information about Chad's tracking system. After some months, she did just that. Furthermore, she told Adolph the details of the information given to Chad by the RCMP, which caused the RCMP embarrassment, time, and money. Which of the following is true?

• A) Sally owes no fiduciary duty to Chad even though she had a trusted position as an employee.
• B) Chad could sue Sally for breach of her employment contract, not only on the clause relating to the term of her employment, but also on the non-disclosure clause.
• C) Chad could sue Adolph for the tort of passing-off.
• D) The RCMP could not sue Chad for breach of confidence because the information disclosed by Sally was not novel know-how that was giving the RCMP the cutting edge in business competition.
• E) Chad could sue Sally for disclosing the information only if he had signed a non-disclosure clause.

---

Definitions:

CVP Analysis

Cost-Volume-Profit Analysis is a method for assessing how fluctuations in costs and sales volumes impact the operating and net income of a business.

Depreciation Expense

The allocated amount of the cost of a tangible fixed asset written off as an expense in the company's accounts over its useful life, reflecting the asset's consumption or loss of value.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much contributes toward covering fixed expenses and generating profit.

Variable Selling Costs

Expenses that vary directly with the volume of products sold, such as commissions and shipping fees.