Commercial Transactions
Study Guide Questions
Course Introduction
Commercial Transactions provides a comprehensive exploration of the legal framework governing the sale and transfer of goods, payment systems, and secured transactions. The course covers foundational aspects of the Uniform Commercial Code (UCC), including Articles 2 (Sales), 2A (Leases), 3 (Negotiable Instruments), 4 (Bank Deposits and Collections), and 9 (Secured Transactions), and emphasizes practical applications in both domestic and international commercial settings. Students will analyze contract formation, performance, remedies for breach, and security interests, developing a strong understanding of how law facilitates and regulates business transactions in the modern economy.
Recommended Textbook
Business Law in Canada 10th Canadian Edition by Richard A. Yates
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16 Chapters
2735 Verified Questions
2735 Flashcards
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Chapter 1: Managing Your Legal Affairs
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136 Flashcards
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Sample Questions
Q1) The time and cost to be incurred by hiring a lawyer is irrelevant.It is always worthwhile to get legal advice from a lawyer.
A)True
B)False
Answer: False
Q2) What are disbursements and what do they generally include?
Answer: Disbursements are out-of-pocket costs incurred by the lawyer on the client's behalf.They typically include court filing fees,long distance telephone charges,courier charges,expert fees,and photocopying costs.
Q3) What is the Canadian Bar Association and what is its purpose?
Answer: The Canadian Bar Association is a professional organization representing judges and lawyers.One of its purposes is to enhance the profession and the commercial interests of its members.
Q4) What must a businessperson consider before asking a lawyer for assistance in making a business decision?
Answer: The time and cost,and whether the client could effectively find and understand the relevant information on his or her own.
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Chapter 2: Introduction to the Legal System
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Sample Questions
Q1) With regard to the Constitution of Canada,which of the following is true?
A) Our Constitution provides for a single system of government.
B) The Constitution Act, 1982 provides which matters can be dealt with only by the federal government.
C) The British Parliament can continue pass legislation that affects Canada.
D) The Constitution Act, 1982 contains a Charter of Rights and Freedoms that curbs the power of the federal and provincial legislatures.
E) Federal judges have been given the sole power to amend the Charter of Rights and Freedoms.
Answer: D
Q2) Why is law important?
Answer: It determines how effectively we interact with one another.It governs personal and commercial relationships.
Q3) Legislation prohibiting all prison inmates from voting in federal elections was found to constitute an unjustified denial of the right to vote.
A)True
B)False
Answer: True
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Chapter 3: The Resolution of Disputesthe Courts and Alternatives to Litigation
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Sample Questions
Q1) Which of the following is incorrect with respect to the function of the small claims court?
A) The monetary jurisdiction of the court is limited.
B) The procedure is the same as the provincial superior trial court.
C) Lawyers usually don't attend.
D) The recovery of costs to compensate for legal fees is severely limited.
E) The provincial government appoints the judge.
Answer: B
Q2) Several provinces have implemented "mental health courts." These specialized courts focus on
A) cases involving Aboriginal offenders and victims.
B) the treatment and rehabilitation of those who have committed criminal acts due to mental disorders.
C) the punishment of those who have committed criminal acts due to mental disorders.
D) single-level courts, whereby judges in this court are given the powers of both the superior trial courts and territorial courts for those with mental disorders.
E) domestic violence cases involving spousal, elder, and child abuse.
Answer: B
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Chapter 4: Intentional Torts and Torts Impacting Business
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Sample Questions
Q1) You cannot trespass in a public mall.
A)True
B)False
Q2) Which of the following is true with regard to the torts of assault and battery?
A) Both torts are "actionable per se"; that is, a person can successfully sue without having to prove damages.
B) The amount of damages paid to Joe, injured by another's battery, will be an amount to cover the extent of injury suffered by a normal person regardless of Joe's actual injuries.
C) A person will always succeed with the defence of self-defence even if he used excessive force.
D) Although assault and battery are often both present in an incident, it is technically possible to be assaulted without being battered.
E) For consent to be an effective legal defence to a claim of battery, the person hit must have been surprised by the incident.
Q3) An act that breaches a contract is inherently wrong.
A)True
B)False
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Chapter 5: Negligence, Professional Liability, and Insurance
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159 Flashcards
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Sample Questions
Q1) What is the test used for legal causation?
Q2) What is the remoteness test used for?
Q3) Explain under what circumstances remoteness can be used as a defence in a negligence action.
Q4) Insurable interest means that the insured must have a personal stake or interest in whatever is being insured and can only claim on the insurance to the extent of the value of that interest.
A)True
B)False
Q5) Does liability vary with age? Explain.
Q6) Once it has paid out on the loss,an insurance company can step into the shoes of the insured and pursue a claim against the person who caused the loss.
A)True
B)False
Q7) The forfeiture rule will not allow a criminal to profit from a crime,but does not affect those claiming through the criminal's estate.
A)True
B)False
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Chapter 6: The Elements of a Contractconsensus and Consideration
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Sample Questions
Q1) Sarah wanted an antique lamp for the bedroom.While in a second-hand shop,she saw a lamp that she really wanted marked $100.She offered the owner $75 for it.He said "I'll take $95." She answered "$80!" He said,"Lady,you're pushing me a bit,aren't you? I'll take $90,that's it." She said "OK I'll pay $90 if you throw in this old 'Vote-for-Trudeau' button." He said,"Forget it,lady,my shop is closed," and asked her to leave.She said,"OK,I accept your offer of $95." He made no response.If she sues for breach of contract,which of the following is true?
A) There is no contract because his offer to sell for $95 lapsed after a reasonable time.
B) There is a contract because at one time he offered to sell the lamp for $95 and she accepted it.
C) There is a contract because he wanted to sell the lamp for $95 and she was willing to pay that much.
D) There is no contract because his offer to sell the lamp for $95 was rejected by counter-offer, and her offer to buy it for $95 wasn't accepted.
E) There is no contract because his offers to sell the lamp for $95 and $90 were revoked and he didn't accept her offers.
Q2) What is an interim agreement?
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Chapter 7: The Elements of a Contract capacity, Legality, and Intention
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Sample Questions
Q1) When will the court waive the requirement of writing?
Q2) Joe was unable to find work in the city where he lived and had to go to the mining camps up north to find work.When he left,he agreed to send his wife $500 a month from his pay for the support of her and the children.In fact,he had some unexpected expenses and failed to send the promised funds for two months.Which of the following correctly states the legal position of the parties?
A) Since this is a domestic relationship, there is a presumption that there is no contract.
B) Since this is a domestic relationship, there is a presumption that there is a contract.
C) Because of the marital obligation, there is always an enforceable contract in these circumstances.
D) The court will make no presumptions in these circumstances because there is never a contract between husband and wife.
E) The court will enforce the promise only if they determine it to be reasonable.
Q3) Indicate what types of contracts are binding on infants.
Q4) What is an executed contract?
Q5) Indicate the distinction between a guarantee and an indemnity.
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Chapter 8: Factors Affecting the Contractual Relationship
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Sample Questions
Q1) Duress takes place when one person takes advantage of another's vulnerability because of a special relationship with that person.
A)True
B)False
Q2) In 978011 Ontario Ltd.v.Cornell Engineering Co.,a businessman signed a contract without reading it.He later discovered it contained a provision with which he did not agree.What did the Court hold?
A) The Court refused to grant an equitable remedy to correct a mistake that the businessman himself had allowed.
B) The Court held that the contract was void due to a lack of consensus.
C) The Court held that the contract was unenforceable due to a lack of consensus.
D) The Court ordered rectification to correct the mistake in the contract.
E) The Court ordered severance due to a lack of intention to be bound to the particular provision.
Q3) What is the parol evidence rule?
Q4) Explain what remedies are available to the victim where misrepresentation becomes a term of the contract.
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Chapter 9: The End of the Contractual Relationship
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Sample Questions
Q1) The courts will grant an order of specific performance to compel performance of a contract for personal services.
A)True
B)False
Q2) On the theory that all land is unique,the courts in the past have been willing to award ____________ whenever the parties to the purchase of land breached their contract.
A) damages
B) quantum meruit
C) specific performance
D) injunctions
E) an accounting
Q3) What is the result of a breach of a minor contractual term?
Q4) Explain how a fundamental breach affects the application of an exemption clause.
Q5) When a condition is breached,the victim can only sue for damages but must continue to perform their obligations under the contract.
A)True
B)False
Q6) Explain what is meant by "specific performance" in contract law.
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Chapter 10: Employment
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Sample Questions
Q1) The process by which a third party imposes a solution to a dispute on the employer and union is called
A) binding arbitration.
B) certification.
C) conciliation.
D) job action.
E) mediation.
Q2) (Modify this question for your province.)To which legislation would a person turn when they have been discriminated against when seeking employment?
A) Bill of Rights
B) Human Rights Code
C) Labour Relations Code
D) Charter of Rights and Freedoms
E) Employment Standards Act
Q3) Explain when an employer can be held liable for the wrongful acts of an employee.
Q4) Explain why picketing can be effective.
Q5) What is the three-part test used to evaluate if an occupational requirement is justified?
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Chapter 11: Agency and Partnership
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Sample Questions
Q1) Which of the following statements is correct with respect to limited partnerships?
A) A limited partnership is created where all of the partners state in the partnership agreement that they will not be responsible for debts arising out of the partnership business and register as such with the government.
B) A limited partner is totally protected and can lose no money.
C) A limited partner can lose his status as a limited partner if he participates in the management of the business.
D) There can be no limited partnerships in Canada. If limited liability is desired, a corporation must be created.
E) There can be only one limited partner in any partnership, no matter how many partners are involved.
Q2) Discuss the problem of liability with respect to partnership and how this difficulty can be overcome,if partnership is chosen as the method of carrying on business.
Q3) What is an enduring power of attorney?
Q4) A sole proprietor is free from regulatory control.
A)True
B)False
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Chapter 12: Corporations
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Sample Questions
Q1) John and two friends incorporated a closely held corporation.Each bought an equal number of common shares in the corporation.Each became a director,an officer and an authorized agent of the corporation.Which of the following is true?
A) As director, each owes a fiduciary duty to the creditors of the corporation.
B) The corporation is more highly regulated and less free of government regulations and control than a broadly held corporation would be.
C) Each of them, as directors, owe a fiduciary duty to each of the others, as shareholders.
D) Since the corporation is a legal fiction, all of its activities must be carried out through principals.
E) If the affairs of the corporation are being conducted in a manner that is unfairly prejudicial to any one shareholder, that shareholder could seek relief from such oppression from the courts.
Q2) How can a corporation be brought to an end?
Q3) A shareholder has an obligation not to compete with the corporation.
A)True
B)False
Q4) To what does "franchising" refer?
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Chapter 13: Real, Personal, and Intellectual Property
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Sample Questions
Q1) A distinction between real property and personal property is that the former cannot be moved while the latter can.
A)True
B)False
Q2) When a Court orders that any profits made from wrongdoing be paid over to the victim,this is known as
A) statutory damages.
B) punitive damages.
C) an accounting.
D) compensatory damages.
E) an injunction.
Q3) A finder has no obligation to return found goods to the proper owner.
A)True
B)False
Q4) Distinguish between real property and other forms of property.
Q5) A remainderman is a third party with the right to the remainder of the fee simple after the death of life tenant.
A)True
B)False
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Chapter 14: Information Technology and the Internet
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Sample Questions
Q1) Which of the following statements regarding the registration of domain names and trademarks is true?
A) The registration of domain names overrules trademark law.
B) A business is entitled to its own unique domain name regardless of trademark law.
C) Where trademarks are infringed, it will be no defence to show that the offender registered a domain name.
D) Registration of domain name precludes someone from registering a trademark.
E) The Canadian Internet Registration Authority determines whether a domain name constitutes trademark infringement.
Q2) Attempts at self-regulation of the internet have been largely successful.
A)True
B)False
Q3) In assessing damages for defamation over the internet,the size of the audience is irrelevant.
A)True
B)False
Q4) The selling of securities also poses particular problems when done online.Discuss.
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Chapter 15: Sales and Consumer Protection
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Sample Questions
Q1) With respect to a sale of goods,which one of the following statements is false?
A) In a retail sale of new goods, the seller can always exclude liability for breach of all implied terms in the Sale of Goods Act by a carefully drawn exemption clause.
B) A seller who has been given a cheque that "bounces" (dishonoured for insufficient funds) in payment for goods that he still possesses has a choice of rights against the goods themselves and an action for breach of contract against the buyer.
C) The Sale of Goods Act provides terms that will be taken to be part of a contract for goods even though the parties failed to mention anything about such matters.
D) In commercial transactions, a buyer of goods has the protection of the "fit for purpose" provision, but legislation enables the seller to exempt himself from liability.
E) The Sale of Goods Act permits commercial parties to exclude the Act if they mutually want to.
Q2) "The purpose of the Sale of Goods Act is to impose terms into the contract that are even and fair,that don't benefit one side over the other." Discuss the accuracy of this statement.
Q3) Distinguish between a sale and an agreement to sell.
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Chapter 16: Priority of Creditors
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Sample Questions
Q1) "Bankruptcy is a convenient way to avoid paying your debts." Discuss the accuracy of this statement.
Q2) Explain the role of the trustee in bankruptcy proceedings.
Q3) Settlements involve the transfer of assets for nominal or no consideration.
A)True
B)False
Q4) As long as the debtor lives up to the terms of an accepted consumer proposal,creditors cannot take action against him or her.
A)True
B)False
Q5) What obligations are placed on the owner of property in respect of builders' liens?
Q6) Owen had borrowed money from a credit union to purchase a car,and the credit union had required a security against the car,which they registered under the Personal Property Security Act.As well,Owen's father guaranteed the loan.Some months later,Owen decided to go back to school,and he had to sell the car to do so.He returned to the credit union and,at his request,the credit union gave up the security they had against the vehicle,knowing that they still had the loan guaranteed by Owen's father.Explain the wisdom of this move.
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