Investors purchased shares in a business coaching school. The investors claimed that the entrepreneurs did not promote the school, the funds paid were not used for the school and they even diverted work to another school owned by them.
The Court held that the contract was not drafted as investment agreement but rather as a share purchase agreement under which the entrepreneurs sold the investors 2.5% of the activity and right to profit of the school. Thus, the entrepreneurs were not obligated to expend the funds for the promotion of the enterprise and were allowed to expend them as they wished. However, because the entrepreneurs did not actively act to promote the school and even diverted work to another school ran by them the Court held that they are to reimburse most of the investment amount.