Business Law
Study Guide Questions
Course Introduction
Business Law introduces students to the foundational principles and frameworks that govern commercial transactions and the operation of businesses within the legal environment. The course covers essential topics such as contract formation and enforcement, agency relationships, the structure and regulations of different business entities, intellectual property, employment law, and issues concerning the sale of goods. Attention is also given to ethical considerations and dispute resolution methods, including litigation and alternative dispute resolution. Through real-world examples and case studies, students will develop the skills to identify and analyze legal issues in business contexts, ensuring compliance and informed decision-making in professional practice.
Recommended Textbook
Business Law in Canada 11th Canadian Edition by
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Page 2
Richard A. Yates
Chapter 1: Managing Your Legal Affairs
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127 Verified Questions
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Sample Questions
Q1) Which of the following statements regarding provincial law societies is False?
A) Provincial law societies may restrict the use of contingency fee agreements.
B) Provincial law societies may set maximum contingency fees for certain types of cases.
C) Provincial law societies may offer a fee mediation service.
D) Provincial law societies provide online information on lawyers' fees.
E) Provincial law societies provide free legal services to people in need.
Answer: E
Q2) What is "duty counsel"?
Answer: Duty counsel refers to lawyers who assist individuals in court who are not represented by a lawyer.
Q3) What should clients do if they believe they have suffered a financial loss because of their lawyer's misconduct?
Answer: They should not procrastinate and may need to seek legal advice from another lawyer.
Q4) What is the main role of a lawyer?
Answer: To provide legal advice relevant to a client's situation.
Q5) When should a client ideally first discuss the issue of fees with a lawyer?
Answer: Fees should be discussed during the initial consultation.
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Chapter 2: Introduction to the Legal System
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Sample Questions
Q1) Which of the following is a legal right under the Charter?
A) Everyone has the right to not to be deprived of their property.
B) Everyone has the right to be employed.
C) Everyone has the right to freedom of expression, regardless of whether it interferes with the freedom of others.
D) Everyone has the right not to be exposed to any unreasonable search and seizure.
E) Everyone has the democratic right to vote, regardless of age or mental capacity.
Answer: D
Q2) The body of rules developed by the Court of Common Pleas, Court of King's Bench, and Exchequer Court became known as ________.
Answer: the common law
Q3) Why is law important?
Answer: It determines how effectively we interact with one another. It governs personal and commercial relationships.
Q4) Explain what role precedent plays in the civil code legal system.
Answer: Prior judges' decisions are merely persuasive, not binding. The Code is binding.
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Chapter 3: The Resolution of Disputes: the Courts and Alternatives to Litigation
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Sample Questions
Q1) When, in a battery case, the court has to decide whether the nasty names Joe called James justified James hitting Joe, this is an example of a question of fact.
A)True
B)False
Answer: False
Q2) Mildred and Sam's marriage breaks up and a creditor is suing Mildred for $5000 because she co-signed for the loan for the purchase of the car. Which court would deal with this action in your province?
A) The small claims court
B) The family court
C) The superior trial court
D) The surrogate court
E) The provincial youth court
Answer: A
Q3) The Supreme Court of Canada only hears appeals from other courts.
A)True
B)False
Answer: False
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Chapter 4: Intentional Torts and Torts Impacting Business
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Sample Questions
Q1) Explain how your right to defend yourself is limited.
Q2) Explain under what circumstances the defence of qualified privileges can be lost.
Q3) "The person who committed the assault and battery must have intended to hurt the other person." Comment on the accuracy of that statement.
Q4) Pursuant to privacy acts, remedies ranging from damages to injunctions and accounting for profits may be awarded.
A)True
B)False
Q5) Until recently, there was no tort of invasion of privacy in common law, but in at least one province, an American legal concept was imported and adopted as a privacy tort. This tort is known as
A) defamation.
B) invasion of privacy.
C) intrusion upon seclusion.
D) nuisance.
E) interference of privacy.
Q6) Explain the difference between qualified and absolute privilege.
Q7) When is a passing-off action appropriate?
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Chapter 5: Negligence, Professional Liability, and Insurance
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Sample Questions
Q1) Last month, Rueben removed a tall tree in his backyard. He left the large hole because he intended to plant a new tree when the rains began. Sunday, he invited his neighbour, Joe, to come over to watch the Olympics. When Joe came, he cut through the backyard and fell into the hole and broke his arm. Which of the following is true with regard to the liability of an occupier of land?
A) The standard of care is set by a federal statute and is therefore the same for all the provinces.
B) An occupier owes a duty only to "licencees."
C) There is no duty of care owed to persons who come onto another's property whether invited or not; persons must take responsibility to look after themselves.
D) The standard of care imposed on the occupier is set by provincial statute.
E) A tenant cannot be liable; only the owner can be sued.
Q2) Children are not held liable for their torts.
A)True
B)False
Q3) What test is used to establish a duty of care?
Q4) Explain what is meant by an insurable interest.
Q5) Distinguish between a fidelity bond and a surety bond.
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Chapter 6: The Elements of a Contract: Consensus and Consideration
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Sample Questions
Q1) What are the ways in which an offer can come to an end prior to acceptance?
Q2) Only the person or group to whom an offer is made can accept it.
A)True
B)False
Q3) What is "quantum meruit"?
Q4) On Friday, Harlan offers to sell Lily his motorcycle for $1000. When Lily hesitates, Harlan tells her to take her time deciding, promising her he will give her the weekend to make up her mind. On Saturday, Harlan runs into Lily at the mall and informs her he has sold the bike to Angie instead. What recourse does Lily have?
Q5) One of the requirements in a contract is that there be an exchange of consideration between the parties. Explain what is meant by consideration.
Q6) Explain the principle of promissory estoppel and how it relates to the requirement of consideration in contract law. In your answer, explain any limitations on its availability.
Q7) A binding contract that will subsequently be put into a more formal document is known as ________.
Q8) What is a "subject-to clause"?
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Q9) A term making a contract conditional on future events is known as ________.
Chapter 7: The Elements of a Contract: Capacity, Legality, and Intention
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Sample Questions
Q1) Explain how an insurance contract avoids being void as a wager.
Q2) Joe had a classic Buick automobile and he agreed to trade it to Sam for a specified amount of cocaine. Sam took the car and, three days later, before he could deliver the cocaine to Joe, his cocaine was seized by the police and he was arrested. Joe is now bringing this action claiming that he's entitled to the car back. Indicate what arguments are available to Joe and the likelihood of him obtaining his car back.
Q3) Joe sold Harry his barbershop, but Harry wanted a commitment on Joe's part that he would not open up another barbershop in the area after he got the money. Explain how the parties could include a clause in their agreement to that end without it being void as a restraint of trade.
Q4) How do the courts determine whether a customer should have taken an exaggerated claim seriously?
Q5) Give three examples of contracts that would be considered void because of illegality.
Q6) If a person says that he had not intended to be bound by an agreement when he entered it, there can be no contract.
A)True
B)False
Page 9
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Chapter 8: Factors Affecting the Contractual Relationship
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Sample Questions
Q1) Where one person transfers his rights to benefits under a contractual relationship to a third party, this is an example of ________.
Q2) Outline the restrictions on the ability of a person to claim non est factum.
Q3) Explain what is meant by a "constructive trust."
Q4) Discuss how privity of contract affects the position of people who are not parties to a contract. In your discussion, include an examination of the Supreme Court decision in London Drugs Ltd. v. Kuehne & Nagel International Ltd.
Q5) Explain what is meant by a "statutory assignment."
Q6) Victims of misrepresentation who have affirmed the contract are bound by the affirmation and cannot later insist on A) rescission. B) remedies. C) breach. D) original positions. E) quantum meruit.
Q7) Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.
Q8) Distinguish between duress and undue influence.
Page 10
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Chapter 9: The End of the Contractual Relationship
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Sample Questions
Q1) Sam agreed to manufacture and supply 25 specially adapted computers for Joe to use for simulated horse racing in his string of hotels throughout the province. Unfortunately, after Sam almost completed the computers, the province passed a law prohibiting the manufacture and sale of this kind of machine. Joe had paid a deposit of $5000, but Sam had incurred $30,000 of expenses in manufacturing these machines. The total purchase price agree upon between these parties was $50,000. Joe sued Sam for the return of his $5000 deposit. Sam, in turn, sued Joe for a contribution towards his loss. Discuss the legal position of the parties.
Q2) An injunction is designed to punish someone for breaching a contract.
A)True
B)False
Q3) Legal tender in Canada consists of government-produced coins and bills of any amount or quantity.
A)True
B)False
Q4) Explain under what circumstances the tender of performance and its refusal will be treated as performance of the contractual obligation.
Q5) Explain what is meant by specific performance in contract law.
Q6) Explain how a contract can be discharged by agreement.
Page 11
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Chapter 10: Agency and Partnership
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Sample Questions
Q1) Information that comes to the agent because of his position as agent must be passed on to the third party.
A)True
B)False
Q2) Explain under what circumstances a principal will be responsible for the wrongful acts of an agent who's not an employee.
Q3) Discuss the concept of vicarious liability as it relates to employment and agency law.
Q4) Identify the true statement concerning the law of principal and agent.
A) Agency is only created by way of a contract.
B) The principal and his agent owe each other the same duties.
C) An agent who puts himself in a position where his interests conflict with those of his principal is in breach of his duties even though no actual harm comes to his principal.
D) An agent with no express authority can never bind his principal into a contract with a third party.
E) An agent can never be liable to the third party himself while the principal will bear no such liability.
Q5) To what does the term "estoppel" refer?
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Chapter 11: Corporations
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Sample Questions
Q1) Which of the following attracts the dissent procedure, which can result in the corporation being forced to buy the shares of a shareholder at market value?
A) When the directors have hidden behind the corporate structure to do a wrong sufficiently serious that the courts would have lifted the corporate veil.
B) If the directors of a non-reporting corporation fail to allot new shares proportionately to the members.
C) When the directors of the corporation fail to enforce a right, duty, or obligation owed to the corporation that could be enforced by the corporation.
D) When the directors conduct the affairs of the corporation in a manner oppressive to one or more of the members.
E) When major changes are made in the best interests of the corporation that will adversely affect one group of shareholders.
Q2) How can a corporation be brought to an end?
Q3) The separate existence of a corporation is said to be a legal myth. Discuss the development of this myth and its value in our society today.
Q4) Distinguish between a par-value share and a non-par-value share.
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Page 13
Chapter 12: Employment
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Sample Questions
Q1) Why is the distinction between employment and an independent contract important?
A) An independent contractor cannot be sure that he will be paid.
B) An employee has the right to wages.
C) An employee can bind the employer in a contract he enters into on behalf of the employer.
D) An employer may be held responsible for torts committed by the employee.
E) Employees can withdraw their services.
Q2) What is the effect if a contractual term does not comply with the minimum standards set out in employment standards legislation?
Q3) Joe had been working for Sam in a supervisory position for 14 years when Sam called him into the office, told him that he didn't have any more work for him to do, and told him that he would be expected to be off the job and the relationship terminated by the end of the month (1-1/2 weeks away). During his 14 years of employment, Joe had worked in a number of positions, but when he assumed his most recent supervisory position one year prior, he had signed an agreement stating that he was only entitled to one week's notice. This agreement also provided him with a substantial raise. Discuss the legal position of the parties.
Q4) Why should employers avoid the temptation to make an employee so uncomfortable he will quit?
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Chapter 13: Intellectual Property
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Sample Questions
Q1) A "passing-off action" prevents a person from misleading the public into thinking it is dealing with some other business and applies whether or not a registered trademark is involved.
A)True
B)False
Q2) Trademarks are to prevent the deception of people who think they are dealing with the company usually associated with the symbol.
A)True
B)False
Q3) In Canada, the Federal Court of Appeal recently allowed for a patent of methods of carrying on business, but business method patents have been available in the United States for some time.
A)True
B)False
Q4) Discuss the various remedies that are available and their effectiveness when intellectual property such as copyright and patent are interfered with.
Q5) What is an Anton Piller order?
Q6) What rights are obtained by the granting of a patent?
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Chapter 14: Real and Personal Property and Protection of the Environment
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Sample Questions
Q1) "When a tenant has signed a two-year lease and then for some reason finds himself in the position where he has to leave, the landlord has an obligation to try to rent out the premises to someone else." Explain the accuracy of that statement.
Q2) Describe the environmental review process in place under federal legislation.
Q3) Indicate three ways that the laws related to residential tenancies have been modified by statute in your jurisdiction.
Q4) Which of the following is one of the implied rights of a lessee of a commercial tenancy?
A) That the lessee will deliver vacant possession to the new tenant at the time they agreed the lease period would start.
B) That the lessee can use and enjoy the premises for all usual purposes without physical interference from the lessor.
C) That the lessor will repair unfurnished premises.
D) That the lessor is assured against the interference by a third party.
E) That the lessee will give the lessor possession.
Q5) Candice tells you she has "sublet" her property. What does this mean?
Q6) Indicate what is meant by real property.
Q7) What is meant by a chattel?
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Chapter 15: Priority of Creditors
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Sample Questions
Q1) When the value of the security is not great enough to cover the debt, a secured creditor is an unsecured creditor for that outstanding amount.
A)True B)False
Q2) Bankruptcy is a wholly voluntary process designed primarily to protect debtors from abusive creditors.
A)True B)False
Q3) Distinguish between bankruptcy and insolvency.
Q4) Explain two methods for a debtor becoming bankrupt.
Q5) Discuss situations in which a secured creditor may opt not to seize property used as security and the rationale for taking this approach.
Q6) Give three examples of types of things that can be used as security under the Personal Property Security Act.
Q7) Settlements involve the transfer of assets for nominal or no consideration.
A)True B)False
Q8) What is a bankruptcy offence? Give an example.
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Chapter 16: Sales and Consumer Protection
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Sample Questions
Q1) A type of sales practice in which the purchaser supplies a seller with a list of friends or acquaintances and receives a benefit when sales are made to those people is known as
A) referral selling.
B) direct sales.
C) one-off marketing.
D) preferred selling.
E) consumer sales.
Q2) The Gift Card Regulation stipulates that gift cards are allowed to have expiry dates.
A)True
B)False
Q3) Explain under what circumstances the sale of goods must be evidenced by writing.
Q4) The principles of freedom of contract and caveat emptor have been completely done away with by the Sale of Goods Act.
A)True
B)False
Q5) Sales made to consumers at their dwellings or places of business are known as ________.
Q6) When a buyer defaults, the seller has an unpaid ________ against the goods.
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