Legal Environment of Business
Chapter Exam Questions
Course Introduction
This course provides an overview of the legal principles and frameworks that shape the business environment. Topics include the structure and function of the U.S. legal system, sources of law, contract law, torts, product liability, corporate governance, agency relationships, and regulatory issues affecting businesses. Students will examine how laws protect both businesses and consumers, the implications of ethical decision-making, and current legal issues relevant to commerce. The course emphasizes the practical application of legal concepts to real-world business scenarios, enabling students to make informed managerial and entrepreneurial decisions within a legal framework.
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) Mandamus involves the decision-maker being required to make a decision.
A)True
B)False
Answer: True
Q2) Which of the following is a legal right under the Charter?
A)Everyone has the democratic right to vote regardless of age or mental capacity.
B)Everyone has the right to be employed.
C)Everyone has the right not to be deprived of his or her property.
D)Everyone has the right not to be exposed to any unreasonable search and seizure.
E)Everyone has the right to freedom of expression even if it interferes with the freedom of others.
Answer: D
Q3) Why is law important?
Answer: Business activities involve significant human interaction.Our business relationships involve important rights, responsibilities, and obligations.These take the form of legal rules, so it's important to understand law as we participate in business.
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3
Chapter 2: Torts and Professional Liability
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143 Verified Questions
143 Flashcards
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Sample Questions
Q1) 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).
Q2) If someone sells imitation Seiko watches without permission, for what can that person be sued by Seiko?
Answer: Passing-off
Q3) With intentional torts such as assault and battery, false imprisonment, or trespass, it is necessary that actual damage be shown.
A)True
B)False
Answer: False
Q4) Distinguish between assault and battery.
Answer: A battery involves actual physical contact, whereas an assault involves situations in which the act complained of creates fear or apprehension in the mind of the victim of imminent physical contact.
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Chapter 3: Formation of Contracts
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Harry saw Joe in his classic Buick at a local drive-in restaurant, and told Joe that he'd like to buy the car.He offered Joe $1500.Joe said he had to think about it and that he'd let Harry know.Two days later, Joe decided that he needed the money and couldn't afford to keep the car.He wrote Harry a letter accepting the offer and mailed it that afternoon.The next day, Harry phoned Joe, saying that he'd changed his mind and that he needed the money for something else.Joe told Harry about the letter, and in fact Harry received the letter later that day.Joe insisted on going through with the deal.Explain the legal liability of the parties.
Answer: This can go both ways.If it was reasonable to respond by mail in these circumstances, then the post-box rule applies.The contract came into existence when the letter was posted, and there is a binding contract.If it wasn't reasonable to respond by mail, then the acceptance must be communicated, and so the acceptance would not be effective until received, which was after the attempted revocation.Therefore, there would be no contract.
Q2) A letter of revocation takes effect when received by the offeree.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Enforcing Contractual Obligations
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177 Verified Questions
177 Flashcards
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Sample Questions
Q1) A holder in due course is in the same position as the person from whom a negotiable instrument was received.
A)True
B)False
Q2) Adams signed a contract in which he promised to sell his house to Jefferson for $225 000.The "deposit" to be paid was set at $4000, and the liquidated damages clause provided that the deposit would be forfeited in the event that the buyer breached the contract.The buyer did breach the contract.Because the cost of housing was falling, it was difficult, even after a reasonable time had passed, to find a new buyer.The highest offer was $218 000.Adams accepted.Which of the following is true with regard to Adams's remedies?
A)Adams could sue for an injunction to stop Jefferson from buying another house.
B)Adams would be entitled to the $4000 only, if the court held that the deposit was an honest attempt of the parties to estimate damages.
C)Adams must sue for specific performance, which is the only remedy, an equitable remedy, available to the parties in land transactions.
D)Adams would be entitled to damages for money lost-$7000 plus selling costs.
E)Adams could ask the court to order an accounting.
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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) Explain the relationship between risk and title and how they are dealt with in the Sale of Goods Act.
Q2) A businessman knew that he was facing substantial losses from pending litigation.Shortly before declaring bankruptcy, he transferred his interest in the matrimonial home to his wife.What was the result?
A)The court allowed the transfer, determining that the wife was not a co-conspirator.
B)The court declined to exercise jurisdiction, because a bankrupt has no status to appear in court.
C)The court reversed the transfer, determining that it was a bankruptcy offence under the Bankruptcy and Insolvency Act.
D)The court reversed the transfer, because it was unnecessary; the wife would automatically receive the matrimonial home once the bankruptcy took effect.
E)The court allowed the transfer, because transfers between spouses are exempt under the Bankruptcy and Insolvency Act.
Q3) "Signing a guarantee is a mere formality." Comment on this statement.
Q4) When goods are sold, who normally bears the risk?
Q5) Distinguish between conditions and warranties in a sale of goods contract.
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Page 7
Chapter 6: Agency and Employment
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158 Verified Questions
158 Flashcards
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Sample Questions
Q1) If you hire Gnowsky to act as your agent, which of the following is true with regard to the duties he owes to you?
A)Gnowsky need not tell you everything relevant to his task that a reasonable person would consider might affect your decision making.
B)Gnowsky need not use reasonable care, skill, and diligence in his service to you.
C)An agent may delegate his authority without the authorization of his principal.
D)Even when Gnowsky is acting as your agent, he need not put your interest above his own.
E)Gnowsky's failure to obey you and to act within the authority given him would allow you to sue him for breach of contract.
Q2) Where an agent has been guilty of fraudulent misrepresentation, the agent must sue the principal.
A)True
B)False
Q3) Indicate how much notice an employee is entitled to when being dismissed.
Q4) Distinguish between a strike and a lockout.
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Page 8
Chapter 7: Methods of Carrying on Business
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) In a franchise arrangement, describe the advantages offered in such a business structure to the franchisee.
Q2) Which one of the following statements is correct with respect to the law of partnership?
A)Partners are responsible for any contracts entered into by the partners related to the partnership business.
B)Partners are only responsible for contracts entered into by the partnership if the third party knew that the person it was dealing with was a partner in the partnership.
C)A partner is responsible for contracts with third parties entered into by the partners only where it has been clearly stated by the partner to the third parties that he is entering the contract on behalf of the partnership.
D)Partners cannot bind their partners in contract without specific written authority.
E)Every partner is responsible for every contract entered into by the partnership.
Q3) Securities regulations are a federal responsibility.
A)True
B)False
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9
Chapter 8: Property
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) If a person wanted to build a log cabin in a new subdivision.what might prevent him or her from doing so?
A)Restrictive covenant
B)Federal statute
C)Prescription
D)Easement
E)Strata regulations
Q2) Which level of government has jurisdiction to pass laws to protect the environment?
A)Provincial
B)Federal
C)Municipal
D)All of the above
E)Neither the federal, provincial, nor municipal government has jurisdiction.
Q3) In some jurisdictions, the landlord is permitted to take a pet damage deposit (where pets are allowed) in addition to the security deposit.
A)True
B)False
Q4) What is a fidelity 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) Health information is not specifically protected by legislation in any province.
A)True
B)False
Q2) A person can obtain copyright protection only when the idea upon which the work is based is original.
A)True
B)False
Q3) Explain how a patent granted in Canada provides certain rights to the patent holder in some other countries.
Q4) Indicate four remedies that may be available to the victim of the breach of copyright.
Q5) Employers are particularly vulnerable to the misuse of their computer resources by employees. Discuss.
Q6) Ownership of a copyright can be sold.
A)True
B)False
Q7) What qualifications must be met in order for something to be patentable?
Q8) Trademarks can be challenged up to 15 years after registration.
A)True
B)False
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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) Discuss alternate dispute resolution with respect to international transactions.
Q2) "Existing laws have proven useless with respect to the internet." Discuss the accuracy of this statement.
Q3) Explain the following statement: "Once a judgment has been obtained, there remains the problem of enforcing it" with respect to international disputes.
Q4) The Canadian government was successful in forcing the Canadian components of eBay to disclose their financial records on certain "power sellers" to Revenue Canada.
A)True
B)False
Q5) Canadian courts may decline jurisdiction if the court can be convinced that it would be more reasonable for some other jurisdiction to deal with the matter, especially where an action has already been started in that other jurisdiction.
A)True
B)False
Q6) Discuss the problems associated with business and the internet.
Q7) Explain the role of Incoterms in international transactions covered by the International Sale of Goods Contracts Convention Act.
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