Commercial Law
Textbook Exam Questions
Course Introduction
Commercial Law is a branch of legal studies that focuses on the principles, statutes, and case law governing business and commercial transactions. This course covers topics such as the formation and enforcement of contracts, the sale of goods, agency, negotiable instruments, and secured transactions. Emphasis is placed on understanding the rights and obligations of parties engaged in commerce, as well as the legal frameworks supporting fair business practices and dispute resolution. Through case studies and practical examples, students gain an in-depth understanding of the legal environment affecting companies, entrepreneurs, and consumers in both domestic and international markets.
Recommended Textbook Legal Fundamentals for Canadian Business 3rd Edition by Richard A. Yates
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10 Chapters
1473 Verified Questions
1473 Flashcards
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Chapter 1: The Canadian Legal System
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) Which of the following is correct with respect to stare decisis in the common law?
A)Statutes play the same role as the code used in the French system.
B)It prevents a higher court from overruling a lower one.
C)It is based on trial by battle and trial by ordeal.
D)This term refers to the role played by the law of equity in our system.
E)It allows decisions of the courts to be set by precedent.
Answer: E
Q2) A negotiation will most likely lead to agreement when the parties are:
A)Equal in power
B)Coercive
C)Vulnerable
D)Uncommunicative
E)Aggressive
Answer: A
Q3) A British Columbia judge is required to follow the decisions of a higher court in Alberta.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Torts and Professional Liability
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) A person could be liable for the tort of trespass:
A)For attending the "garage sale" at the designated time
B)For leaving packages in the wrong person's garage
C)For sleeping in the garage with the owner's permission
D)For leaving the wrong packages in the right person's garage
E)For accidentally knocking down the garage in a car out of control
Answer: B
Q2) Distinguish between libel and slander.
Answer: Libel is written defamation and slander is spoken defamation.(In some jurisdictions, libel includes any form of broadcasted defamation.)
Q3) Contrast the use of the terms assault and battery in tort law as compared to their use in the Criminal Code.
Answer: Battery, in almost all tort cases, also includes an assault, so it has become common to simply use the term assault to cover situations where physical contact is involved.Under the Criminal Code, the term assault includes physical contact (which would be referred to as battery in tort law).
Q4) Explain how your right to defend yourself is limited.
Answer: You are permitted to use only reasonable force to defend yourself.
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Page 4
Chapter 3: Formation of Contracts
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Negotiations between Dave and Mary resulted in the following agreement: Dave would sell his property to Mary for the sum of $150 000, closing date to be August 10, 2004.When the two completed their discussion, Mary paid Dave $5000 as part payment of the purchase price and received a receipt.The contract was not in writing.On August 10, Mary tendered the remainder of the money, but Dave refused to convey the property.Mary sued Dave for breach of contract.On these facts, which of the following is true? (Assume that all facts can be proved.)
A)Mary can enforce this contract if the receipt specified that the part payment was for the property in question.
B)Mary cannot enforce the agreement because all of the consideration was not paid.
C)Mary cannot enforce this contract because the contract was not evidenced in writing.
D)Mary cannot enforce this contract because the contract was not in writing.
E)Mary cannot enforce the agreement because she had not paid Dave all of the money.
Answer: A
Q2) What is the age of majority in your province?
Answer: The age of majority is 18 or 19, depending on the province.
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Chapter 4: Enforcing Contractual Obligations
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177 Verified Questions
177 Flashcards
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Sample Questions
Q1) The longer Adolph stayed on this job, the more he hated it.He thought the boss was too demanding.He especially disliked being reprimanded for being late.One afternoon, he was asked by a secretary to take a letter to the boss for his signature.The boss had had an eye operation and was recuperating at home.Adolph got two signatures, one on the letter and one on a note promising to pay Adolph $1000 in consideration for services rendered.The boss was not careless, but couldn't read the papers.What plea or argument, if any, could the boss use to avoid paying on the promissory note?
A)Unconscionability
B)Duress
C)Shared mistake
D)Rectification
E)Non est factum
Q2) Discuss what happens when the parties to a contract make mistakes with respect to what they have agreed.
Q3) If a warranty in a contract is breached, what rights does the non-breaching party to that contract have?
Q4) For a contract to be frustrated, performance must be impossible.
A)True
B)False
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Chapter 5: Legislation in the Marketplace
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105 Verified Questions
105 Flashcards
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Sample Questions
Q1) Mrs.Quale bought a new sewing machine from Androcles' Sewing Centre because she thought that, as well as using it herself, her daughter, Susan, would also be able to use it for her high school home economics projects.Unfortunately, because of a manufacturing defect, the machine ran wild when Susan was using it and it destroyed her project, sewed the end of her finger, and sprayed oil all over the carpet.Androcles' Sewing Centre had bought the machine from Midmen Distributors Ltd., which had bought it originally from the manufacturer, General Stitchers Inc.Which one of the following statements is false with respect to the available remedies in this situation?
A)Midmen Distributors Ltd.has an action against General Stitchers Inc.for breach of an implied condition of merchantable quality.
B)Midmen Distributors Ltd.bears no liability here because it was just an intermediary in the distribution chain.
C)Androcles' has an action for breach of contract against Midmen Distributors.
D)Susan has an action in tort law against General Stitchers Inc.
E)Mrs.Quale has an action against Androcles' for breach of an implied condition of reasonable fitness for a particular purpose.
Q2) Explain the purpose of the bankruptcy process.
Q3) Explain what is meant by merchantable quality.
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Chapter 6: Agency and Employment
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158 Verified Questions
158 Flashcards
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Sample Questions
Q1) A contract entered into by an agent cannot be ratified inadvertently by the principal.
A)True
B)False
Q2) Explain what is meant by an agent's fiduciary duty.Give three examples of how that fiduciary duty can be breached.
Q3) An agent with no express, implied, or apparent authority to do so identified himself as an agent for his principal, and on behalf of his principal bought a computer.The principal refused to ratify the contract.On these facts, which of the following is true?
A)The seller could sue the principal for breach of warranty of authority.
B)The principal would have to pay for the computer because the agent was an agent for that principal.
C)The agent could be sued by the seller of the computer for breach of his warranty of authority.
D)The seller of the computer could sue the agent for breach of contract for saying he was an agent.
E)A third party cannot sue an agent even under these circumstances.
Q4) Distinguish between a rights dispute and an interest dispute.
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Chapter 7: Methods of Carrying on Business
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Explain under what circumstances a shareholder's right to sue against oppression arises.
Q2) Explain what is meant by pre-emptive rights.
Q3) A partner's liability for the torts of his or her partners extends beyond those committed on company business.
A)True
B)False
Q4) There is one common method of creating corporations used across Canada.
A)True
B)False
Q5) Jones is a partner in a law firm in a small town, and he is also doing legal work out of his home in the evenings for himself.Explain the rights of his partners in this situation.
Q6) When two people enter into a partnership by agreement but neglect to set out the terms of such agreement, or where the parties becomes partners inadvertently, where are the terms and arrangements of that partnership set out?
Q7) Joe and Mary promote several dances at school and split the profits.Will this be enough to establish a partnership?
Q8) Indicate the main disadvantages to incorporation.
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Chapter 8: Property
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) When a person has the right to go across land to get to another location, this is referred to as what?
Q2) Explain what is meant by bonding.
Q3) The term "equity" is often used to refer to the value left in an asset after what is owed on it is subtracted.
A)True
B)False
Q4) Distinguish between real and personal property.
Q5) Explain what is meant by a landlord's obligation to provide quiet enjoyment.
Q6) In a three-year commercial lease, the tenant must give the landlord two months' notice before leaving.
A)True
B)False
Q7) A right of way can be acquired by prescription when a person's habitual use of land is not interfered with by the owner.
A)True
B)False
Q8) Explain what is meant by an insurable interest.
Q9) What is a surety bond?
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Chapter 9: Ideas and Information
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131 Verified Questions
131 Flashcards
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Sample Questions
Q1) What is an Anton Piller order?
Q2) Discuss how the common law protects intellectual property.In your discussion, indicate why it was necessary to introduce statutes in some areas.
Q3) Which of the following is true with respect to the duty owed when a person is in possession of confidential information?
A)The nature of the duty is not to disclose confidential information about a business that would cause harm to the business or bring personal benefit.
B)There is an obligation of duty, but it stems from contract law.
C)A duty is only owed when the information is copyrighted or patented.
D)The duty is owed only between partners within a partnership.
E)There must be a fiduciary duty in order to have a legal obligation not to disclose confidential information.
Q4) Where intellectual property is involved, what could be added to a contract or licence to strengthen the argument in support of an injunction if a breach does take place?
Q5) Indicate the kinds of things that are covered by trademark legislation.
Q6) What is the period of protection associated with patent law?
Q7) What period of protection is granted under industrial design legislation?
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Chapter 10: Electronic Commerce and International Trade
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) International business contracts may also include specialty contracts such as a bill of lading, letters of credit, or insurance.
A)True
B)False
Q2) The objective, in Canada, of the Uniform Electronic Commerce Act (UECA) is primarily:
A)To define what constitutes a violation of privacy
B)To make electronic documents and signatures as binding on parties as written ones.
C)To restrict internet pornography.
D)To restrict internet gambling
E)To provide a series of remedies for internet commerce retail abuses primarily from "offshore" enterprises
Q3) In most cases, it is best for parties to a contract to include a provision in the agreement to have any disputes between them arbitrated, usually using one of the international arbitration services available for that purpose.
A)True
B)False
Q4) Describe electronic signatures with respect to capacity.
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