Law Final

With regard to the law of corporations, which of the following is true? A) A creditor of a corporation could sue for some remedy if the directors of the corporation voted for a resolution to pay a dividend when the corporation was insolvent. B) "Relief from oppression" provisions allow a party who has contracted with the corporation to force the corporation to honour a contract it has signed in an irregular manner. C) A director of a corporation could not be personally liable on a promissory note even if he just signed his own name as long as at the time he intended to sign on behalf of the corporation. D) If a minority shareholder is treated unfairly, the appropriate relief to request is that the court "lift the corporate veil." E) In many jurisdictions, pre-emptive rights entitle a shareholder to pass on their right to vote to someone else.

Creditor of a corporation

Which of the following is a true statement about the employer-employee relationship? A) An employee for a company could not also be an agent at the same time for the company. B) If an employer contracts to paint Mr. Shore's barn and sends the employee out to do the painting, if the employee is not paid he can sue his employer or Mr. Shore for his wage. C) The critical factor in this relationship is control; the employer tells the employee not only what to do but also how to do it. D) One responsibility of an employer is to provide the employee with lifetime work availability. E) An employee does not owe a fiduciary duty to his or her employer.

Critical factor

Although Zlotnic had been in business a long time, he had been forced to borrow heavily in the last few years. When his debt reached the limit of his line of credit, $100,000, the manager of the RegalBank called him in for a talk. Subsequently, Zlotnic sold his house for $250,000 to the Johnsons. He contracted to buy another from the Scotts. From the proceeds he anticipated receiving from the Johnsons, he assigned $200,000 to the Scotts, the purchase price of Scott's house, and assigned $50,000 to the Regal Bank to reduce his debt. The assignment to the Scotts was in writing; the assignment to the bank was not. The Scotts gave written notice of the assignment to the Johnsons on March 1, the day the money was owed to Zlotnic. Johnson verified the assignment and paid out the $200,000 to the Scotts. On March 2, the Regal Bank gave written notice of its assignment to the Johnsons. Unfortunately, at that time only $45,000 was owing to Zlotnic because the Johnsons had paid $5,000 to the Canada Revenue Agency for Zlotnic. On these facts, which of the following is true? A) The assignment to the bank is a statutory assignment. B) Zlotnic needed the permission of the Johnsons, the debtors, before he could make any assignments. C) The assignment to the bank is not enforceable because it was not in writing. D) The bank has no claim since the Johnsons didn't owe Zlotnic the specified $50,000 at the time of the assignment. E) Regal Bank must take "subject to the equities" between Zlotnic and the Johnsons; i.e., it can't receive the whole $50,000.

"Subject to the equities"

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 $4,000, 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) He could sue for an injunction to stop him from buying another house. B) He could ask the court to order an accounting. C) Adams must sue for specific performance, which is the only remedy, an equitable remedy, available to the parties in land transactions. D) He would be entitled to the $4,000 only, if the court held that the deposit was an honest attempt of the parties to estimate damages. E) He would be entitled to damages for money lost$7,000 plus selling costs.

$4,000 only

Pat O'Grady owes Robinson $5,000 in cash, but resented Robinson talking about O'Grady's debt among mutual acquaintances. O'Grady wants to know which of the following tactics would be legal performance. A) Pay him on time but with a cheque. B) Pay him on time in $5 bills. C) Not pay Robinson until Robinson came for it. D) Pay Robinson on time but pay it all in dimes. E) Deliver the money to his house instead of to his office at 3:00 a.m. on the due date.

$5 bills

X contracted with Z. X promised to pay $500; Z promised to build a cabinet to hold X's DVD's. The essential terms included the type and quality of the wood, the dimensions, and the date of completion - February 13, 2011. The work went more easily than expected and Z said to X, "If you pay me another $85, I will have this finished and be out of here by February 10." X agreed. If the cabinet was done to specifications by the 10th, but X refused to pay anything, Z would be entitled in law to A) $585. B) only $85. C) $500. D) nothing. E) a "fair price."

585

Which of the following shows the use of the doctrine of promissory (equitable) estoppel? A) Ralph told Mary that he would give her his old boat. If he doesn't, Mary could use the doctrine to force him to do so. B) A defendant can use this doctrine as a defence against a plaintiff insisting on his full legal right when he had promised to forgive the defendant some of his obligation. C) If Nancy accidentally ran her car over her neighbour's bushes, she could use the doctrine as a defence. D) If Ho requests services from Jones and there is no mention of price, if Ho doesn't pay Jones, this doctrine can be used to force Ho to pay a reasonable amount. E) This doctrine can be used by a plaintiff to enforce a written promise signed and sealed (i.e., a seal has been affixed next to the signature of the promisor).

A defendant can use

If a corporation had been wronged by negligent and fraudulent acts of one of its directors and consequently suffered a $45,000 loss, and the board of directors would not take any action on behalf of the corporation against the wrongdoer, which of the following is true? A) If the company failed to commence an action through its authorized agents (e.g., its directors), no action could be taken, because a corporation is merely a legal concept and must act through its authorized agents. B) The shareholder could proceed under the "dissent" procedure and force the corporation to pay them a fair market value for their shares. C) The shareholders could force the directors to start the action on the basis of their "pre-emptive right." D) The shareholders could sue the corporation for oppression. E) A derivative action allows a shareholder to commence an action on behalf of the corporation.

A derivative action

Your brother wants to borrow $8,000 from the Bank of Britannia and has asked if you would guarantee the loan. You have been told the following with regard to guarantees. Which of the following statements is false? A) You, as guarantor, may be relieved of your obligation if the bank does anything to weaken your position, e.g., by agreeing with your brother to increase the amount without your consent. B) A guarantor, like an indemnitor, becomes primarily liable on the debt as soon as the document is signed. C) If he defaulted on his payments and you had to pay the debt to the bank, you would be subrogated to the rights of the bank; i.e., you would get the bank's right to sue your brother. D) As guarantor, you can use any defence against the bank that your brother could use. E) A legally enforceable guarantee must satisfy all the elements required to create a binding contract.

A guarantor, like an indemnitor

With respect to a sale of goods, which one of the following statements is true? A) In private personal transactions, a buyer of goods has the protection of the "fit for purpose" provision. B) 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. C) 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. D) The Sale of Goods Act provides terms that are not to be part of a contract for goods even if the parties failed to mention anything about such matters. E) The Sale of Goods Act does not allow the use of exemption, exculpatory or limitation clauses.

A seller who has been given a cheque

In which of the following relationships is a fiduciary duty owed? A) An employer to his employees B) The director of a corporation to the shareholders C) The officers of a corporation to the shareholders D) A principal to his agent E) The director of a corporation to the corporation

Corporation = corporation

In which of the following situations would it be legal for the employees to strike? A) The A.F.I.O., the properly certified bargaining agent for the employees of Ace Manufacturing Ltd., were demanding an unreasonably high wage settlement from the employer, which would bankrupt the firm if accepted. The employer refused to agree to this and the employees went out on strike. B) Ace Manufacturing made armaments and some were sold to South Africa. When the employees found this out, they went out on strike, demanding that the practice stop. C) The employer introduced some new policies into the plant that, while they did not violate the terms of the collective agreement in place, were very much resented by the workforce. The employees then participated in a deliberate process of sabotage and slowdown to show their displeasure. D) The A.F.I.O. was approached by a group of employees working for Ace Manufacturing Ltd. to see if they would organize the work force and unionize it. When the employer discovered this, he fired that group of workers and the rest went out on strike. E) A collective agreement was in place between Ace Manufacturing and its employees, and that contract was blatantly breached by the employer, resulting in the employees going out on strike.

A.F.I.O, properly certified bargaining agent

Carlos visited Vancouver last summer and instead of going back to Ontario he stayed and enrolled at Simon Fraser University. He needed money but didn't need things left in Ontario, including his car. In mid- December, he wrote a friend and offered to sell the car for $4,000 and told him to send him a letter with his answer. His friend received the letter on January 2, checked his financial situation, and sent a letter of acceptance January 3. Meanwhile Carlos, short of cash and not hearing from his friend, sold the car to Mr. Reno on December 31. Carlos received his friend's letter January 8. On these facts, which of the following is true? A) The acceptance was effective before it was received, so there was a contract between Carlos and his friend. B) All methods of acceptance are effective upon receipt by the offeror. C) The letter of acceptance was effective when it was received, and by then Carlos had sold the car, so there was no contract. D) In order for there to be a binding contract, there must be an offer and receipt of the letter. E) Sending an acceptance by mail was not a reasonable method of acceptance in this situation.

Acceptance was effective before it was received; no contract

Jed, who lived on Cape Breton Island, needed money for a trip to France. He decided to sell his electric guitar. On Monday, October 29, he called the owner of a music store in Halifax and offered to sell his Fender Stratocaster guitar for $400, the offer to be open until Friday noon, November 2. Jed told the store owner to send a letter of acceptance since he (Jed) would be away for a few days. The store owner examined his inventory and mailed a letter of acceptance on Thursday, November 1. When Jed returned home on Saturday, November 3, the letter had not yet arrived, so that afternoon he sold the guitar to a music teacher in his town. The store owner in Halifax sued for breach of contract. Which of the following is true? A) The letter of acceptance was effective when it was received, and by then Jed had sold it, so there was no contract. B) The offer lapsed before the store owner accepted. C) The offer was revoked before the store owner accepted. D) Sending a letter by mail was not a reasonable method of acceptance. E) The acceptance was effective before the offer lapsed, so there was a contract between Jed and the store owner.

Acceptance was effective before offer lapsed

Bob in Burnaby called Ed in Toronto and offered to sell him 40 kilograms of smoked salmon at $15 per kilogram. He requested that Ed phone him back by noon the next day. That way, Bob could offer it to someone else if Ed wasn't interested. Instead of phoning, Ed sent a letter of acceptance, in which he said that he would have his agent pick up the fish. On these facts, which of the following is false? A) If using the mail was unreasonable, the acceptance was effective when it was mailed. B) The place of formation of the contract, if there was one, was Burnaby if the use of the mails was unreasonable. C) If using the mail was unreasonable, the acceptance could not be effective until it was received. D) The place of formation of the contract, if there was one, was Toronto if the use of the mails was reasonable. E) Although a response by phone was requested, a response by mail would be effective if received before noon the next day.

Acceptance was effective when mailed

Parents are responsible for their children's actions in which one of the following situations? A) Where an infant borrows money for college tuition B) Where the child enters into a contract for a new stereo C) Where an infant was acting as agent for the parents D) Where the child carelessly breaks a window in a neighbour's house E) Where a child purchases a needed new jacket

Acting as agent

Sam hires Joe to negotiate and sign a contract with Ken on Sam's behalf. Which of the following is true? A) If Joe acts outside his express authority and negotiates and signs the contract with Ken, Sam may not be a party to that contract. B) If Joe acts outside his implied and express authority, Sam will owe him for his services. C) If Joe acts within his apparent authority, but outside his express or implied authority, Sam will be bound by the contract, but may sue Joe for breach of his agency contract. D) If Joe acts outside his express, implied, and apparent authority, he could be sued by Sam, but not by Ken, because he has no contractual relationship with Ken. E) If Joe acts outside express, implied, and apparent authority, Sam is not bound by the contract, even if he ratifies the contract.

Acts within apparent

In British Columbia, which of the following is correct with respect to the law of infants? A) An infant is bound by his contract for necessaries and beneficial contracts of service. B) An adult cannot enforce any contract against an infant while the infant is still under age unless the contract is made binding by another statute (e.g., government student loans). C) An infant is not bound to repay his government student loan. D) If the adult did not know he was dealing with an infant, the adult is not bound by the contract. E) A contract with an infant is "absolutely void" except those contracts for necessaries and beneficial contracts of service.

Adult cannot enforce

If an agent breaches his duty to his principal, his principal can sue the agent successfully for A) breach of the agency agreement. B) breach of agency act. C) breach of warranty of authority. D) wrongful representation. E) the tort of deceit.

Agency agreement

The office manager of a real estate agency was at an office supply store to replace a filing cabinet when he saw a demonstration of a new Xerox copier. Undoubtedly, the agency would benefit from the copier, especially since it had the capability of enlarging the original - a good feature when dealing with the small print of contracts. The next day, he called the manager of the store to discuss the machine further. The seller said that it was "ten years ahead of the competition," that it "was rated as maintenance-free by an independent consumer research group," and that he had "sold five to other real estate agencies in this area" and "had only one left." The agency, relying on these statements, asked to have it delivered. When it arrived, the office manager had learned that every statement made by the seller had been false; furthermore, the seller did not send out the machine discussed, but the old model. Which of the following is true? A) The agency would have to keep the machine, but could sue the seller for damages for the tort of deceit. B) Had the office supply store sent the right machine, the agency would have had no remedy. C) The agency would have a remedy for breach of contract, but no remedy for other statements that merely persuaded it to enter the contract. D) The agency could have returned the machine even if it had been sent the right model, since the remedy of rescission was available to it for misrepresentations made. E) This is a "buyer beware" situation and the buyer has no remedy.

Agency could have returned

Which of the following is true with respect to the agency relationship? A) An agent's apparent authority may be implied from the position that the agent holds in the employer's organization. B) When a principal has specifically limited the authority of the agent, that agent can never bind the principal in a contract, even if the agent acts outside his authority. C) An agent acting gratuitously can never bind the principal. D) Actual authority is the authority the principal has implied in conversations with a third party. E) An agent's authority is limited to whatever authority the principal specifically gives the agent.

Agent's apparent authority

You owe Mr. Store $900 for goods received and want him to take $800 in full satisfaction of the debt. Which of the following is false? A) If he actually takes the $800 in full satisfaction of the debt, statute law in many jurisdictions prohibits him from suing you for the $100. B) If Mr. Store agreed to take the $800 as full payment, but before taking it changed his mind, he would be entitled to the entire $900. C) If you pay the $800 before the actual due date in consideration for his taking this as full payment, he cannot sue for the other $100. D) If he agrees with you and does take the $800, even if it is paid early at his request, he can still later sue you for the $100 forgiven. His promise not to demand the $100 from you was a gratuitous promise and therefore not binding. E) If Mr. Store agreed to take the $800 as full payment in exchange for your promise to sweep the floor of his store, he cannot sue for the

Agrees with you and does take

Al sells gravel to Bob on credit, and Bob sells it to Chuck, an innocent purchaser. Then Bob runs away with the money, without paying Al. Who will get the gravel if the court holds that the contract between Al and Bob was "void"? A) Bob B) Chuck C) Al and Bob D) Al E) Bob and Chuck

Al

Which one of the following statements about bankruptcy is false? A) A debtor who has been discharged from bankruptcy is released from his previous financial obligations. B) All creditors of a bankrupt debtor are treated equally and will receive shares of the assets directly in proportion to how much is owed to each of them. C) Bankruptcy law may allow a debtor to escape from having to pay his debts. D) Bankruptcy law is identical in every province of Canada. E) Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to a trustee who acts on behalf of creditors

All creditors of a bankrupt debtor

Identify which of the following statements is true about secured transactions in provinces having a personal property security act. A) This kind of transaction, which formerly was legal, is now prohibited by law in all provinces. B) Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes. C) Only tangible personal property can be used as security. D) All kinds of security arrangements involving personal property as collateral now come under one statute. E) An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved.

All kinds of security arrangements

An agency relationship can be created by: A) Ratification B) Actual authority C) Estoppel D) Apparent authority E) All of the above

All of the above

The Ontario Consumer Protection Act requires that the supplier disclose to the consumer, before the consumer enters into an internet agreement, detailed information including which of the following statements: A) The name of the supplier and, if different, the name under which the supplier carries on business. B) An itemized list of the prices, including taxes and shipping charges, at which the goods and services are proposed to be supplied to the consumer. C) The telephone number of the supplier, and the address of he premises from which the supplier conducts business. D) The consumer need be notified of any cancellation, return, exchange, or refund conditions. E) All of the above statements are included.

All of the above

Which of the following is a fiduciary relationship? A) Shareholders and the corporation B) Agent and the third party C) Director of the corporation and the shareholders of the corporation D) Directors of the corporation and the corporation E) Officer of the corporation and the shareholders

Corporation = corporation

Which one of the following is correct with respect to the rights of partners unless they have agreed otherwise? A) All profits are shared equally between the partners. B) Personal expenses incurred by the partners in the course of business are reimbursed. C) Only the partners that have contributed the largest capital amount have the right to share in management. D) No major decision can be taken without a majority vote agreement of all the partners. E) Partners can sell their share of the partnership to another person without the agreement of the partners.

All profits

A continuing guarantee A) allows a breaching party to pay an amount specified in a contract, rather than facing a lawsuit for damages. B) allows a creditor to advance further funds without affecting the obligation of the guarantor to pay in the event of default. C) is a primary obligation of a third party to pay a debt along with a debtor. D) is a written commitment not to pursue a legal claim against another. E) is an equitable principle assuring that when security is repossessed, there will be a period of time during which the debtor can still make payment.

Allows a creditor to advance

In his last year of high school, Larry saw a friend's computer and felt that the word-processing function would help him get through high school. He visited Computer Heaven Ltd. and contracted for an Apple Macintosh, printer, paper, and the program. The total cost was $2500. He paid $500 down and promised to pay another $500 next July 3, when he reached the age of majority, the remainder to be paid in monthly installments of $250. By July 3, Larry had graduated, thanks to his passing mark in English, and had no more use for the computer. Furthermore, he wanted to use his $500 birthday/graduation present for a down payment on a compact disc player and speakers. He failed to make his July 3 payment or any other to Computer Heaven. The balance outstanding at the time he quit making payments was $2300, including unpaid interest. On these facts, which of the following is true? A) Larry had no intention of making payments after July 3, so a valid contract did not exist after that date. B) Although the contract is unenforceable against Larry, if he affirms the contract after he reaches the age of majority, the seller will be able to sue him for breach of contract. C) If Larry doesn't pay, Computer Heaven Ltd. can sue Larry's parents because parents are liable for the debts of their minor children. D) Computer Heaven Ltd. can sue Larry for breach of contract if it sues Larry after he becomes an adult. E) Because a contract with a minor is void, Computer Heaven Ltd. has never passed title and can just go get the computer, printer, paper, and program even if it has been resold to someone else.

Although the contract is unenforceable

A provision in a contract for the sale and purchase of a business read as follows: "The vendor (Jones) shall not, directly or indirectly, in any capacity whatsoever, carry on a similar business in any location for one year." Six months later, Kates found that Jones was competing directly by opening up a similar business, contrary to the contract drafted by Kates. Kates sued Jones for breach of contract, namely, breach of the restrictive covenant. Which of the following best describes the legal position of the parties? A) Such provisions are always void, being an illegal restraint of trade. B) Although this provision would be void, the remainder of the contract for the sale of the business would be enforceable. C) Although this type of provision is illegal, this particular one would be enforceable because it is reasonable between the parties and not contrary to public policy. D) This provision is in restraint of trade and causes the whole contract to be void. E) Agreements such as these are always binding, being the result of a free bargain between the parties.

Although this provision would be void

On Friday afternoon, Frieda was told not to return to work because her job was gone. If her employer is in a non- unionized business, and had no "just cause" to dismiss her, which of the following is true? A) The amount of notice to be given her is limited to the employment contract. B) If the employee sues for wrongful dismissal and the court has to determine the appropriate notice period, it would consider, among other things, her sex and religion. C) Additional notice must be given even if the employer pays her an amount of money equivalent to the amount of money she would have earned during the notice period. D) The amount of notice could be set out in the employment contract, and that amount would override the amount set by the common law, unless it was less than the minimum amount set out in the Employment Standards Act. E) She can elect to have a notice period or to take money in lieu of notice.

Amount of notice could be set out

Bret decided to enlarge the fishpond in his backyard. He contracted with a general contractor, Conan. Conan subcontracted with Darson to do the excavation and with Ericson to do the plumbing. Conan's own workers did the masonry work. Bret made "progress payments" to Conan, since Conan said such payments were necessary to pay his workers and subcontractors. Bret learned that the workers and subcontractors had not been paid; Conan had used the payments to pay debts unrelated to the job on Bret's pond. Which of the following best describes Bret's position? A) Bret will be liable for all unpaid amounts, because the work was on his land and for his benefit. B) If Bret held back the 10% required by statute from his payments to Conan, but then later paid it out despite liens having been filed against his property, Bret would still face no liability as he technically complied with the legislation. C) If Bret held back the 10% required by statute from his payments to Conan, his obligation would generally be limited to the amount of that holdback. D) Because of the doctrine of privity of contract, Bret will not face any liability whatsoever. E) Bret had no obligation to hold back any amount of the payments made to Conan as the hold back requirement doesn't apply to progress payments.

Amount of that holdback

Vanessa had been a waitress at Joe's Good Eats for seven years. There had always been differences between Vanessa and Joe because they had radically different views on politics, religion, and sports, but he had always overlooked these differences because he liked her and she was a good waitress. However, one busy day with the restaurant full of customers, he began ranting about city politics. Vanessa whispered, "Please, Joe, you know I don't agree." It ended with Joe yelling, "I've had it with your radical ideas. Get out!" So Vanessa left. The employees at Joe's were not unionized. If Vanessa sues for unlawful dismissal, she will be entitled to damages equivalent to which of the following? A) The amount of pay received in one pay period, e.g., one month if paid monthly B) The amount that would have been paid during a reasonable notice period less any amounts received from other employment C) One week's pay (the statutory minimum) D) Her regular pay until she finds another job E) Nothing

Amount that would have been paid

Which of the following statements regarding privacy is true? A) Since the development of 128 bit encryption, wireless networks are 100% protected against unauthorized access. B) An organization is responsible for the protection of personal information such as drivers' licence information. C) The incidence of personal identification numbers (PIN) theft has been eliminated. D) Credit card and debit card fraud is now virtually impossible with the new safeguards in place. E) Employers are not liable for employees' abuses of privacy.

An organization is responsible for

Uncle Isaac has had some difficulty in a sale-of-goods contract and wants to know if there are any mistakes in the information he has received with regard to the remedies for breach of such a contract. Indicate the true statement. A) If there has been a breach of contract, the purchaser is only entitled to tort remedies. B) An unpaid seller who has possession of the goods has a lien on those goods; i.e., he can hold the goods. C) A court will award a remedy, only if there was a breach of warranty. D) Once the seller of the goods has given up possession of them to the buyer, he has lost his right to sue. E) The Sale of Goods Act excludes the possibility of the equitable remedy of specific performance.

An unpaid seller

With regard to bankruptcy and debt collection, which of the following is false? A) Corporations that go into receivership may not be involved in bankruptcy; the receivership may be based on contract. B) Both fraudulent conveyance and fraudulent preferences acts attempt to prohibit the debtor from delaying, hindering, or defrauding the creditor. C) The Bankruptcy and Insolvency Act provides for a procedure for an insolvent debtor to make a proposal to his creditors that may or may not result in bankruptcy for the debtor. D) The commission of a bankruptcy offence could prevent a bankrupt debtor from being discharged. E) Any assets obtained by a discharged bankrupt can still be claimed by former creditors who placed the former bankrupt into bankruptcy.

Any assets obtained

With regard to debt collection, which of the following is false? A) A debenture can create a "floating charge" that will not attach to anything specifically until the debtor defaults or until the happening of another "crystallizing" event. B) Under the execution procedure, the assets of a judgment debtor can be seized satisfy a judgment debt. C) The Bankruptcy and Insolvency Act provides for a procedure for an insolvent debtor to make a proposal to his creditors that, if accepted by his creditors, will not result in bankruptcy. D) Any assets obtained by a bankrupt after his being discharged can still be claimed by former creditors who placed him into bankruptcy. E) A person who wins in an action and is awarded damages is called a "judgment creditor."

Any assets obtained

Pursuant to the Bills of Exchange Act A) cheques are now considered to be legal tender. B) any negotiable instrument used to advance credit in a consumer transaction must be marked "Consumer Purchase". C) certified cheques have been replaced by letters of credit. D) promissory notes must now be executed by more than one signatory prior to transfer to a holder in due course. E) floating charges are automatically issued against the general assets of a corporation.

Any negotiable instrument

In jurisdictions in which the registration system of incorporation is used, the rules governing the internal regulations of a company are called A) the letters patent. B) the articles or articles of association. C) the memorandum or memorandum of association. D) the certificate of incorporation. E) the notice of offices.

Articles of association

In jurisdictions where the registration system of incorporation is used, registration is accomplished by filing which of the following combinations of documents? A) A certificate of incorporation B) Letters patent and application for incorporation C) Company constitution and business plan D) Articles of association and memorandum of association E) Articles of incorporation and certificate of incorporation

Articles of association

A woman forged her husband's signature on dozens of cheques. In an attempt to protect her from prosecution, the husband signed a letter prepared by the Bank agreeing to assume all liability for the forged cheques. What would the Court find in relation to this agreement? A) The agreement was unenforceable because the husband was under duress at the time he signed it. B) While the Bank acted improperly, "freedom to contract" establishes that the agreement must be enforced. C) The agreement was unenforceable because the Bank lacked capacity to enter into such an agreement. D) Because the husband acted improperly, the agreement was voidable by the Bank on the basis of illegality. E) As an agreement to stifle a criminal prosecution, it was an illegal contract and therefore void.

As an agreement to stifle

"Quantum meruit" means A) "as much as deserved". B) "the ultimate freedom to contract". C) "a shield but not a sword". D) "a meeting of the minds". E) "to stand on decision".

As much as deserved

After graduating, a student set up a business as a systems analyst. His monthly billings are healthy, about $10,000 a month. He rents his office, hardware, and furniture and owns few assets. He rents his apartment, has no car, and spends most of his income on concerts. If he approaches you, a bank manager, to borrow $50,000 for the purpose of increasing his working capital, which of the following securities would you most likely request? A) Conditional sale contract B) Floating charge debenture C) Assignment of accounts receivable D) Security under sections 426 and 427 of the Bank Act E) Chattel mortgage

Assignment of AR

Nick has a consulting business with monthly billings of $4,000. He rents his office, hardware, and furniture and owns few assets. Nick rents his apartment, has no car, and spends most of his income on leisure. If he came to you, a bank manager, and asked to borrow $10,000 for the purpose of increasing his working capital, which of the following securities would you most likely request? A) Security under sections 426 and 427 of the Bank Act B) Chattel mortgage C) Conditional sale contract D) Assignment of accounts receivable E) Floating charge debenture

Assignment of AR

In a secured transaction, the creditor's right to payment of a debt may be secured by his taking title to certain assets. In which one of the following types of transactions do those assets consist entirely of intangible property? A) A debenture issued by a manufacturing firm with a floating charge over its inventory of products. B) A sale of goods in which the buyer will obtain title when he finishes paying the price in installments. C) Assignment of book accounts. D) Chattel mortgage. E) A transaction under section 427 of the Bank Act, whereby a bank takes security over a farmer's growing crops with respect to a loan to purchase the seed and fertilizer necessary to grow those crops.

Assignment of book accounts

XYZ company, a distributor of auto parts, is in debt to the bank for $35,000 due on February 25, 2012. The company is having difficult times and wants to negotiate with the bank to pay only $33,000 as payment in full. With these facts in mind, which of the following statements of the law is false? A) If the company obtained from the bank the bank's promise to forgive the $2,000 under seal, the bank could not later sue for the remainder. B) If the bank agrees to accept the $33,000 as payment in full if paid early, by February 15, and the company does as requested, the bank could not later sue for the remainder because the company gave good consideration for the bank's forgiveness of the debt. C) At common law, if the bank accepted the $33,000 as payment in full, even absent additional consideration, it could not later sue for the remainder because such promises are always binding. D) So long as they don't take the money, the bank can still sue for the entire amount. E) In some jurisdictions, a statutory provision provides that the creditor who accepts less than full payment as payment in full cannot later sue for the remainder.

At common law

Which one of the following statements about the Personal Property Security Act is true? A) In a situation where a debtor fraudulently attempts to transfer property that he has given as security, the Act is designed to protect both the debtor and secured creditor. B) If someone suspects that an item of personal property has been given as security by a particular person, he can sue on the breach of a condition. C) If a secured creditor fails to register his security interest in the Personal Property Registry, he loses his rights against the debtor. D) This legislation applies only to all present transactions where personal property is given as security interest to enforce an obligation. E) Unless a creditor in a secured transaction covered by this Act takes steps to "attach and perfect" his security interest, he could lose that interest to someone outside the contract.

Attach and perfect

Which of the following statements correctly illustrate a legal signature for online commercial transactions? A) Attaching a signature on your computer screen. B) Clicking an "I Reject" dialogue box. C) Signing your name at the bottom of a standard form, and then not mailing it to the business. D) Attaching an electronic signature to an electronic document. E) Opening an online shopping basket, and adding several items to the basket.

Attaching an electronic signature

Which of the following statements is correct with respect to picketing? A) Lawful picketing is the process whereby striking employees forcefully prohibit others from doing business with their employer. B) Lawful picketing is the process whereby striking employees attempt to persuade people not to do business with their employer. C) Lawful picketing can take place during a rights dispute or a recognition dispute. D) Lawful picketing cannot take place during a lockout, only during a lawful strike. E) Lawful picketing is an accepted form of protest by workers whether or not a lawful strike is in process.

Attempt to persuade

When Gary went into Computer Heaven, Ltd. to get a better manual for the program he was trying to master, he was caught by a demonstration of a computer created by Next, Mr. Job's new firm. He was fascinated by its performance. The salesman, Ross, told Gary that he should have this machine; that "it was the last computer, no other will ever be better"; that "UBC, Simon Fraser, and BCIT just ordered over 1000 of them"; that he only had "a few left and the demand is so great it will take almost a year for the next shipment to arrive." When Gary said he needed a computer with at least 100 Gigabytes, Ross said this model had 250 Gigabytes. Gary was persuaded and contracted for it. Later Gary learned that every statement made by the salesman Ross was untrue, including the statement about the memory capacity; the model only had 40 Gigabytes. On these facts, which of the following is true? A) Statements that induced Gary to contract, but that are not the terms of the contract, are not significant enough for the courts to award a remedy by case law or by statute. B) Only if Ross, the salesman, knew that all the statements he made were false could Gary get a remedy. C) Gary could be awarded the equitable remedy of rescission even if Ross, the salesman, honestly believed everything he said was true. D) Such misrepresentations could only result in contractual remedies, legal or equitable, but not in tort remedies. E) Merely the exaggerated claim "it was the last computer, no other will ever be better" is enough, according to the case law, to allow Gary to get out of the contract.

Awarded equitable remedy of rescission

If the contract doesn't say who bears the loss if an item is lost or stolen, the Sale of Goods Act says risk goes with title. If the contract doesn't say when the title will pass, the Sale of Goods Act implies when it will pass. In which of the following will the statute imply that title will pass to the buyer at the time of the contract? A) While at Sears, Preston decides to buy the style of sofa he sees on display. He pays cash and the store arranges to have one like it, covered in the material he selects, delivered directly to him from the factory. B) Azar goes into a store specializing in old woodworking tools. He chooses a $1000 tooling machine. The contract provides that it would be delivered to his workshop the next morning and he would pay for it in one month. C) Agro Ltd. buys all the chemicals contained in the container marked "A" but the price has to be ascertained by measuring the number of litres in the container. D) George calls a store and asks them to deliver the table advertised in its catalogue. The store agrees, takes his credit card number, and promises to deliver it on Friday. E) Maureen contracts for Ms. Roberts' next year's pumpkin crop.

Azar

Smith is an employee of ABC Company and wants to persuade the other employees to join a union and become certified, because the wages paid by ABC are less than those that would be paid in a union plant. ABC Company does not want a union. Which of the following is ABC permitted to do? A) ABC can transfer Smith to another plant. B) ABC can increase the wages paid to the employees, thus eliminating the major reason for having the union. C) ABC can form his own company organization for workers and have it certified. D) ABC can fire Smith. E) ABC can tell the employees that it cannot afford to pay union wages and, if forced to, will go out of business, as long as that statement is true and not threatening or intimidating.

Can tell the employees

Four years ago, Ben Ratzi incorporated a corporation and became the sole shareholder, director and officer. He lent the corporation $10,000 and took a debenture from the corporation as security for repayment of the loan. The corporation prospered. Last year, your brother began supplying the corporation with office supplies. He was paid at the end of each month for supplies delivered during that month. For the last six months, however, he has not been paid. He learned that other suppliers had not been paid either because sales dropped drastically, apparently due to Ratzi's harsh management style, which has upset the entire staff. Which of the following is true? A) Your brother has no claim against the corporation because it has limited liability. B) Your brother could take an action under statutory "relief from oppression" provisions. C) If your brother decided to sue for the debt, he could sue Ratzi because he was the sole shareholder and his management style caused all the trouble. D) If Ratzi dies, his corporation would automatically die too, and there wouldn't be any person to sue. E) If this corporation were placed into bankruptcy, Ratzi would be in a better position than your brother for receiving proceeds realized from the sale of the assets of the corporation.

Bankruptcy

In 2011, Rambolin incorporated Rambolin Industries Ltd. and became its sole shareholder. He lent the corporation $10,000 and took a chattel mortgage from the corporation as security for repayment of the loan. He became director, president, and secretary of the corporation. The corporation prospered. Last year, you began supplying the corporation with office supplies. You were paid at the end of each month for supplies delivered during that month. For the last six months, however, you have not been paid. You learn that other suppliers have not been paid either because sales had dropped drastically, apparently due to Rambolin's nasty temper caused by ill health. Which of the following is true? A) Shareholders have a statutory obligation to manage the corporation, so Rambolin, as shareholder, must exercise care in that task. B) If you decided to sue for the debt, you could sue Rambolin because he is the sole shareholder and his nasty temper caused all the trouble. C) You could take an action under the pre-emptive right provisions under the relevant legislation. D) If Rambolin dies, his corporation would automatically die too, and there wouldn't be any person to sue. E) If this corporation were placed into bankruptcy, Rambolin would be in a better position than you for receiving proceeds realized from the sale of the assets of the corporation.

Bankruptcy

Which of the following is governed by federal statute and thus has rules common to all of Canada? A) Conditional sale contracts B) Chattel mortgages C) Builder's liens D) Bankruptcy E) Assignments of accounts receivable

Bankruptcy

Clem had wanted a piano for a long time. Although he was a minor, his mom gave him $300 and he took this with some savings and made a $500 down payment on a $3,000 piano. The balance was to be paid over a three-year period. His mom signed the contract as a guarantor. Clem made the first three payments, but he damaged the piano trying to move it from the living room to his upstairs bedroom. He didn't have the money to get it fixed. He quit playing, lost interest, and quit making his payments. On these facts, which of the following is false? A) Unless Clem affirms the contract or partly performs the contract after he reaches the age of majority, the seller cannot get any compensation from him. B) Because Clem is an infant, he cannot sue the seller, even if the piano is defective. C) Although the contract is unenforceable against Clem, if he affirms the contract after he reaches the age of majority, the seller will be able to sue him for breach of contract. D) Clem's mother will be liable on the guarantee only if it is in writing. E) If Clem's mother guaranteed the deal, she would be liable on her guarantee even if the contract were unenforceable against Clem.

Because Clem is an infant

Sarah, who had just celebrated her 21st birthday, was distraught over the fact that her tuition had recently gone up. She did not qualify for any further student funding, so she had no alternative but to borrow money from FastCash Loans. Without getting legal advice, she signed a contract in which she agreed to pay back the money along with interest. Because Sarah was a student, and therefore a high-risk client, the interest clause was to be calculated at the rate of 80 percent per year. Sarah failed to pay back all of the funds and FastCash Loans sued her. What argument might she successfully raise to limit the amount of her obligation? A) The Interest Act provides that in any contract where interest is payable, interest must be stated as a monthly rate. B) Because Sarah is a student, she lacked capacity to agree to the terms of the contract. C) Because the interest rate was over 60 percent, the interest provision was contrary to the Criminal Code. D) Under the Student Finance Act, it is unlawful to charge interest to a student. E) Because Sarah did not receive independent legal advice, the loan agreement is void.

Because Sarah is a student

The equitable remedy of rectification is granted by the courts in which of the following situations? A) The parties to a contract disagree as to the meaning of a term in their contract. B) The seller made a fraudulent misrepresentation that induced the buyer to buy. C) Because of a mistake, a written document does not include a corrected term to which the parties had orally agreed. D) The seller of goods has made an innocent misrepresentation that persuaded the buyer to buy. E) A person buys something that he later learns he already owned.

Because of a mistake

On September 1, Beeton contracted to sell $4,000 worth of specified Kenyan lumber to Cairns. Beeton expected the arrival of the lumber soon, so the delivery date was set for September 8. On September 5, Beeton assigned, in writing, his contractual right to receive the $4,000 to his bank,which was pressing him to reduce his $17,000 debt. The bank sent a written notice to Cairns instructing him to forward the $4,000 to the bank and not to pay Beeton directly. Unknown to either Beeton or Cairns, the lumber had been lost at sea in August, before they had even entered the contract. On these facts, which of the following is true? A) The assignee would receive whatever the assignor had assigned to him, namely, the $4,000. B) The time for determining the "equities between the parties" is always the time that notice of the assignment is given. C) Because the goods bargained for had perished before the parties had contracted for them, the court would hold the contract void. D) Because the assignment was made by Beeton to his bank in good faith, Cairns must pay the bank $4,000. E) This assignment was not a statutory assignment; i.e., it failed to satisfy the statutory requirements for enforcement by the assignee against the debtor.

Because the goods bargained for

The internet provides direct and inexpensive access to a massive audience. Which of the following torts are not concerns related to the internet. A) defamation B) nuisance C) conversion D) deceit E) negligent misstatement

Conversion

Dan, a Canadian resident, has decided to created a web site offering products and services to consumers in certain European markets. Which of the following is true with respect to the jurisdictional issues that arise? A) Dan could not be prosecuted for an activity that is against the law in a European jurisdiction, as long as that activity is acceptable in Canada. B) Because the web site was created to do business in other jurisdictions, the laws of those jurisdictions will apply to the transactions unless it is clearly stated otherwise in the contract. C) It is sufficient for Dan to follow the rules of his own jurisdiction. D) "Conflict of laws" refers to the established rule that if laws in one jurisdiction conflict with those of another, it is the laws of the jurisdiction of residence that always govern. E) Disclaimers posted on Dan's web site will protect him if the content of his web site turns out to constitute an offence in the European markets in which he is operating.

Because the web site was created to do business

A company named Printers World Ltd. bought a $9,000 plotter under a conditional sale contract and, because of business reverses, is unable to make the payments. Which of the following is accurate with respect to the legal position of the parties? A) The seller could seize the goods but, before resale can take place, the debtor must be given notice and an opportunity to redeem. B) The seller could only seize the goods, and could not instead opt to sue the company. C) The seller could seize the goods without a court order only if it had properly registered the conditional sale contract. D) The seller could seize the goods only if it obtained a court order. E) The seller could seize and sell the same day because it had already waited three months after default before taking any action.

Before resale can take place

Which of the following is correct with respect to the ratification of an agent's contracts? A) A contract can only be ratified if the principal was not able to enter into the contract himself at the time of ratification. B) A principal can only ratify an agreement entered into by an agent if his name has not been used. C) When a contract entered into by an agent is ratified by a principal, it commences at the time the principal ratifies the contract. D) A principal can ratify a contract where the agent has gone beyond both his actual and apparent authority. E) The agent can set a time limit within which the ratification must take place.

Beyond both his actual and apparent authority

When Mr. Adams tells the local Boys' and Girls' Club that he will give them $5,000 if they promise to use the funds for their summer camping program, this is an example of which one of the following? A) When accepted by the club, a unilateral contract B) Gratuitous promise C) When accepted by the club, a bilateral contract D) Inadequate consideration E) Promissory estoppel

Bilateral

The process by which a third party imposes a solution to a dispute on the employer and union is called A) certification. B) conciliation. C) job action. D) mediation. E) binding arbitration.

Binding arbitration

To which of the following transactions would the Sale of Goods Act apply? A) A contract to get a dress mended and cleaned B) A contract for a haircut C) A contract for a house D) A contract with a warehouseman to store a Chevrolet car E) A contract for a boat

Boat

Sue had a beautiful lakeside cottage that had been in her family for years. Times became a little tight, and Sue decided she had no choice but to sell the property. Sue agreed to sell the cottage property to her neighbour Bob for the sum of $250,000. Although Sue was ecstatic about the price early on, she soon changed her mind. There were too many memories for her to give the property up. Which of the following, by itself, would be the biggest barrier to Bob enforcing the agreement? A) Bob and Sue had an agreement that their contract was not to be enforceable. B) No money had yet exchanged hands. C) Although Sue had written a letter to Bob that discussed the essential terms of the agreement, Bob and Sue had not executed a written agreement. D) The $250,000 price was not adequate, under the circumstances. E) Unknown to Bob, at the time of the agreement Sue was mentally incapacitated.

Bob and Sue had an agreement

If you pay $1000 for a 90-day option on property offered at $200,000, which of the following is true? A) With the signing of the option agreement, you have entered into two contracts - a contract for time and another for land. B) You have agreed that you will accept the offer of land within the 90-day period. C) If you do not exercise the option, you can get your $1000 back. D) You have bought a 90-day period of time within which you may or may not accept the offer of the land. E) The seller of the land can revoke the offer of the land any time before acceptance.

Bought a 90 day period of time

Punam was the director of a broadly held corporation that made educational software. Without the knowledge or consent of the board of directors, Punam started a competing business that she ran from home. Which of the following is true? A) Punam can compete with the business, as long as she does use confidential documents belonging to the corporation. B) Punam has breached a fiduciary duty owed to the corporation. C) Whether or not Punam can compete with the business, depends on whether her written contract prohibits it. D) Punam is only a director, so she owes no special duty to the corporation. E) Punam owes the shareholders of the corporation a fiduciary duty, so they could sue her if they suffer a loss.

Breached

Ethan got together with a number of friends who all sat on the Board of Directors of a corporation. They personally disliked Stephen, a minority shareholder with a bad attitude. A new proposal was being put to the Board. While they knew that this was not a measure that was in the best interests of the corporation, they also knew it would seriously weaken Stephen's financial position. Accordingly, they voted in favour of it. Which of the following is true? A) The directors have breached their fiduciary duty to act in the best interests of the shareholders. B) The directors have discretion to act how they see fit, even if it is not generally viewed as professional. C) The directors have breached the Canadian Code of Professional Conduct. D) The directors have breached their fiduciary duty to act in the best interests of the corporation. E) The directors have acted inappropriately, but because Stephen is a minority shareholder, their conduct is not actionable.

Breached fiduciary duty to act in best interests of corporation

Andrea agreed to form a corporation with two friends, but lay awake last night rethinking her decision. They agreed that they all wanted to be directors and officers and that they all would have signing authority with the bank from whom the corporation is borrowing the money. Nevertheless, she began to review her assumptions. Which of the following is true? A) As a shareholder, she is free to compete with the company even if she is a director as well. B) As a major shareholder, she would be elected as a director every year even without such a provision in the shareholders' agreement. C) When she signs the promissory note at the bank on behalf of the corporation, she can just sign her own name; she will not be personally liable as long as she intended to sign on behalf of the corporation. D) She would be able to bring an action on behalf of the company if one of the directors breached his fiduciary duty to the corporation and the other directors refused to do anything about it. E) She would be able to ask the court for "relief from oppression" if she disliked a decision passed by the majority of the directors.

Bring an action on behalf

When a business or employer provides access to their website for discussion forums, the following statement is correct. A) The employee only is held liable for any offensive comments made. B) Businesses or employees can not be held criminally responsible for offending communications made. C) All email communications are considered private, and therefore exempt from any defamation actions. D) The employer is not liable, if the employee uses email and does not post the offensive comments on the website. E) The business or employer may be held liable for any defamation or otherwise offensive statements made by its employees.

Business or employer may be held liable

Which of the following is not controlled by consumer protection legislation? A) Unconscionable transactions B) Unequal bargaining power that is abusive C) Business transactions D) The investigation of complaints E) False advertising

Business transactions

Often a party to a contract wants to avoid his obligations by arguing that the contract was entered into because of a mistake, misrepresentation, undue influence, or duress. Which of the following is false with regard to these areas of the law? A) A person can successfully argue non est factum and avoid his obligations under a contract only if he was misled about the very nature of the document and was not careless. B) A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that his misrepresentation, which persuaded the buyer to buy, was true. C) Where, because of a mistake, a written document does not embody the unchanged term of the original oral agreement, a party to the contract could ask the court for the equitable remedy of rectification. D) Independent legal advice given to a person who wants to give a gift to a dominant person (e.g., his doctor) is good evidence to rebut a presumption of undue influence. E) If a seller persuades a person to buy something by a fraudulent misrepresentation, the buyer could ask for rescission and/or damages for the tort of deceit.

Buyer could not be awarded

Which of the following is an example of a unilateral contract? A) C returns a lost dog and claims the $50 reward. B) Joe promises to give Harry his old boat when he gets his new one. C) Joe agrees to paint Sam's house for $500. D) Joe pays $50 for groceries at a grocery store. E) Sam orders a meal in a restaurant.

C returns

Which of the following is true with regard to ending a contract by agreement? A) A contract cannot be ended by agreement if neither party to the contract has performed his or her obligation. B) A contract cannot be ended by the happening of a "condition subsequent" provided for in the contract. C) A contract can be ended unilaterally by one party. D) A contract can be ended by one party if he finds a better deal, e.g., by cancelling an order that has been accepted, as long as this is done before performance. E) A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract.

Can be ended by agreement if one party has performed

Indicate which of the following is the correct statement about the effect of promissory estoppel on a promisor. A) Promissory estoppel has no effect on a promisor because it only relates to statements of fact, not promises. B) Promissory estoppel can be used as a defence only against a promisor who reneges on his promise. C) Promissory estoppel is known as injurious reliance in the United States and has the same effect in both American and Canadian law. D) Promissory estoppel must be distinguished from equitable estoppel. E) When a victim relies on the promise and suffers injury, he can sue the promisor for compensation even where no consideration has been given in return for that promise.

Can be used as a defence

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, 2011. When the two completed their discussion, Mary paid Dave $5,000 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 all facts can be proved.) A) Mary cannot enforce the agreement because all of the consideration was not paid. B) Mary cannot enforce this contract because the contract was not in writing. C) Mary cannot enforce this contract because the contract was not evidenced in writing. D) Mary can enforce this contract if the receipt specified the part payment was for the property in question. E) Mary cannot enforce the agreement because she had not paid Dave all of the money.

Can enforce if receipt specified

With regards to online contracts, which of the following statements is accurate? A) Consumers cannot be held liable for terms that they did not actually read. B) Canadian consumers may have to have their claims heard in foreign jurisdictions. C) The electronic equivalent of small print, is the part of a document that cannot be seen on the screen. D) Exemption clauses in electronic contracts do not have to be brought to the attention of the person accepting. E) An electronic document becomes effective only once the consumer is provided with a paper copy.

Canadian consumers

With regards to internet jurisdiction, which of the following is true? A) Canadian courts are willing to find jurisdiction where there is a degree of interactivity and substantial connection between the act complained of and the province. B) Many jurisdictions have passed long-arm statutes allowing them to take jurisdiction only if the person being sued is a resident of that jurisdiction. C) Judicial action is allowed only if the person being sued is a resident of that jurisdiction and directly involved. D) Every jurisdiction has a different set of laws, and each internet user should conform to the local laws of each nation, state, or province. E) Valid laws apply to the internet, and there have been no difficulties in determining what laws apply to the internet and internet transactions.

Canadian courts are willing

Which one of the following statements is true with respect to workers' compensation? A) While job-related injuries are covered under the Workers' Compensation Act, illness that results from work is strictly the employee's own problem. B) All employers pay similar premiums no mater how dangerous the job. C) A worker who is injured on a job that is covered by the Workers' Compensation Act has the choice of either suing his employer or claiming under the Act with regard to that injury. D) All of the funds used to pay for injuries suffered on the job come from a fund paid into by the government and employees. E) A worker who is injured on a job that is covered by the Workers' Compensation Act cannot sue his employer over the injury regardless of whether he makes a claim under the Act or not.

Cannot sue his employer

Which of the following is an ingredient necessary to form a contract? A) Exemption clauses B) Fairness C) Capacity D) Privity E) Assignment

Capacity

Adam bought a boat from Charlie for $900 payable on November 6. On November 6, when Charlie came for the money, Adam didn't have it. Adam was, however, employed by Ms. Bey to do some market research. He was to be paid $1000 for his report, due on November 12. Charlie wanted an assignment of $900 of the amount Adam expected to receive November 12. Adam wrote out an assignment with all the essential information and signed it. Charlie gave written notice of the assignment with all pertinent information to Ms. Bey the next day, November 7. On November 12, Adam had not finished his report. The contract provided that he would lose $100 for every week he was late. Adam was two weeks late in submitting his report. Which of the following is true? A) This assignment is a statutory assignment. B) Ms. Bey must honour the notice of assignment by paying out the $900 on the day the notice was received. C) Charlie would get nothing because Ms. Bey owed less than the amount assigned. D) Charlie, the assignee, would receive $800 from Ms. Bey and have to look to Adam for the other $100 owed. E) The assignment fails to be an assignment at all because Adam failed to get the consent of Ms. Bey.

Charlie, the assignee, would receive $800

Which of the following is true with respect to the application of contract law to the Internet? A) If the basic requirements of acceptance are not met, an offer accepted by e- mail is binding on both parties. B) Internet contracts are governed by the federal Uniform Electronic Commerce Act, in effect throughout Canada. C) Clicking an "I Accept" button on a website is considered the equivalent of achieving the consensus element of a binding contract. D) No jurisdictions have passed any legislation making electronic communications the equivalent of written documents for legal purposes. E) Online communications are governed by the "postbox rule".

Clicking an "I Accept" button

Which of the following statements regarding online transactions is true? A) Electronic signatures are not effective in determining the capacity of the parties entering into a contract. B) Common law has established the equivalency of electronic documents to written ones. C) Conducting transactions online negates the need to satisfy the normal requirements of a contract. D) The post box rule applies to both non-instantaneous and instantaneous methods of communication. E) Clicking an "I Accept" button may constitute valid acceptance of the terms of an agreement.

Clicking an "I Accept" button

An offer accepted on a website or by email will be effective so long as the basic requirements of acceptance are made. Which of the following statements are true? A) When people buy software over the internet, the contract is binding only when the product has been delivered. B) A purchaser of a product online will be bound by all the terms of the agreement regardless if has notice. C) When people buy software over the internet, or the licence to use it, the contract is binding immediately since the postbox rule of acceptance applies. D) When people buy software over the internet, or the licence to use it, it is not necessary, that the purchaser indicate that they have read and accepted the seller's terms and conditions. E) When people buy software over the internet, or the licence to use it, clicking the "I Accept" button is the equivalent of removing the shrink- wrap, and the contract is binding as soon as the button is clicked.

Clicking the "I Accept" button

Which of the following statements with regards to defamation over the internet is true. A) If the author is unknown or uses a false name, bringing an action for defamation presents little difficulty. B) If the ISP encourages the offending behaviour, or if they ought to have known of it, the intermediary cannot be held liable for defamation. C) Where the communication is found to be defamatory, the first question to be determined is whether the statement is libel or slander. D) If the author is unknown, intermediaries, such as ISP's or website operators, can always be held liable for defamation. E) If the author resides in another jurisdiction, an action for defamation in all circumstances, can be brought against the ISP.

Communication is found to be defamatory

Mr. Jans owned a small building with four offices upstairs and a restaurant on the main floor. Jans contracted with a company, Signs Limited, to construct a sign indicating the names of his tenants and their room numbers. The sign was created and installed by John Monet, an employee of Signs Limited. Signs Limited assigned $500 of the $700 contract price to Ms. Franz, its landlord, when she called and pressed for the rent. Ms. Franz gave notice of the assignment in writing to Jans. Read the following statements, independently of one another, and indicate which is the true statement. A) If the sign were not done properly, Jans should sue Monet for breach of contract because Monet, as employee, did the work. B) If Signs Limited fails to pay Monet's salary, Monet is legally entitled to sue Jans for it because Monet did work for Jans. C) If the assignment is not honoured by Jans, Franz' only recourse is to sue Monet, the employee who actually did the work. D) Franz cannot enforce this assignment because the assignment was not in writing, and only assignments in writing will be enforced by the courts. E) If the contract were completed satisfactorily, Franz could enforce the assignment, although it is a partial assignment.

Completed satisfactorily

Which of the following statements is correct with respect to breach of contract? A) When a condition is breached, a person can only sue for damages but must perform their part of the contract. B) When a contract for the purchase of goods is breached, the warranty will require that the goods be repaired by the seller. C) When a contract is repudiated before performance is due, the victim must wait until the time of performance before taking any action. D) When a warranty is breached, the victim can treat the contract as ended. E) When a condition is breached, the victim can treat the contract as ended.

Condition is breached, victim can treat

After some careful research, Jake decided what kind of car to buy. He made an offer to Mr. Frank, a private party, to buy his car only after searching the registry for any liens. The registry reported that there were no liens registered against the vehicle. The seller accepted his offer of $8,000. After Jake had had the car for only three weeks, the car was seized by a conditional seller. Which of the following is true? A) If they have not properly registered the security, the conditional seller has lost all rights and claims. B) The conditional seller has the right to keep the car for the sole reason that it has title to it and could assert its claim whether it properly registered with the central registry or not. C) The conditional seller could not keep the car if it had not registered its claim properly. D) Jake cannot keep the car nor can he complain to the seller, because the seller never said the car was free and clear of liens or encumbrances. E) If Jake had failed to search the registry, he could not get the car back whether or not the loan transaction had been properly registered.

Conditional seller could not keep the car

Which of the following statements regarding online transactions is false? A) Clicking an "I Accept" button may constitute valid acceptance of the terms of an agreement. B) Conducting transactions online negates the need to satisfy the normal requirements of a contract. C) Legislation has been passed in some jurisdictions to make electronic documents equivalent to written ones. D) It is unlikely that the courts will extend the postbox rule to apply to online transactions. E) Reasonableness of terms can affect the enforceability of electronic contracts.

Conducting transactions online negates

Which one of the following is an example of a contract that is binding on an infant in jurisdictions other than British Columbia? A) A contract for a camera B) A contract for professional hairstyling C) A contract for rent D) A contract for baseball tickets E) A contract to purchase a new stereo

Contract for rent

In which of the following situations would there be an enforceable contract despite the lack of a written contract? A) Sam agreed to guarantee a loan for his friend Joe. B) Jack leases a storage facility for duration of his 2- year army hitch. C) Jack agreed to build a garage for Sam after he finished the remainder of his 2- year army hitch (he has 14 months left). D) Sam agreed to trade his vacation cottage with Joe in exchange for Joe's yacht. E) Contractor Joe agreed to build a $250,000 home for Sam on Sam's land, to be completed no later than 9 months from the date of signing.

Contractor Joe

With regard to a contract for the sale and purchase of goods, which of the following is false? A) The Act provides a number of implied terms that may be added to the contract if the parties failed to mention those particular matters. B) Title to the goods may pass to the buyer at the time of contract. C) Contracts for the sale of goods valued at more than $2 must be in writing in order to be enforceable. D) The buyer of used goods has the protection of the implied terms of the Sale of Goods Act, but the Act does not automatically void an exemption clause in a contract for the sale of used goods. E) To guard against loss, a buyer of costly goods should have his insurance in place by the time that title passes to him, because the person with title generally bears the loss.

Contracts for the sale of goods valued at

A necessary element of a contract is that the parties must have the intention to be legally bound. Which of the following is true with regard to this element of a contract? A) Family members can never have the intent to be legally bound in their agreements because family matters are private matters. B) In contract cases, the court hears evidence as to what the parties actually had in their minds at the time of contract. C) The court always just presumes an intention to be legally bound, so this is never an issue in a contract case. D) The court can presume the intention to be legally bound, but a party to the contract can bring forward contrary evidence to rebut the presumption. E) If the parties fail to state expressly in their contract their intention to be legally bound, there is no contract.

Contrary evidence to rebut

On the February 1, Smyth contracted to buy Dupont's van. They had agreed that Smyth would pay the price of $7,000 on March 1 and take delivery and the risk on that date. Smyth then contracted to sell the van in Smithers on March 5 for $7,600. On February 22, Dupont called Smyth and said he wasn't going to sell it; he decided to keep it. On these facts, which of the following is false? A) Smyth could refuse to acknowledge a breach, but that would result in the possibility that the contract could be breached later. B) Smyth could acknowledge that Dupont was in breach but has to wait until after the performance date to sue him for breach of contract. C) Dupont's call is an express repudiation of the contract and is an anticipatory breach. D) Smyth could agree to call off the contract; neither of them had yet performed. E) Smyth could refuse to acknowledge a breach and press Dupont to complete the contact.

Could acknowledge

Gordon invented a solution that dissolved the residue of tape that remained on walls after the removal of notices, pictures, etc. He kept his formula secret, but wasn't yet interested in marketing it, just in improving it. Gordon's only employee, Thad, who had signed a contract to work until July1, 2011, was offered a job by Mr. Barr who would pay him twice his salary if Thad would leave Gordon right away (April) and bring Gordon's secret formula with him. Because Thad was upset by Gordon's lack of interest in marketing his product, he did copy the formula, quit, and began working for Barr, who marketed the solution. On these facts, which of the following is false? A) Gordon could sue Thad for breach of the employment contract. B) Gordon could not get an injunction to stop Barr from marketing the product because Barr didn't steal the formula. C) Gordon could sue Barr for inducing breach of contract. D) As one remedy, Gordon could ask for the accounting of profits. E) Gordon could sue Thad for breach of trade secret law.

Could not get an injunction

Allen hired Beth to do a marketing survey. The contract provided that she would start the work on January 15 and finish it by March 15, the date for completion being a condition on the contract. She would be paid $2,000. After one month of work, when the work was half completed, Beth assigned the $2,000 contract price to Charlie, from whom she had bought computer hardware. Charlie gave written notice of the assignment to Allen on the same day. The second month's work went badly. Information entered into the computer was lost and Beth could not finish on time. She was five days late, and each day cost Allen $100. His total foreseeable loss was $500 because of her breach. On these facts, which of the following is true? A) Charlie could receive $2,000 from Allen because that is the amount owed to Charlie and the amount assigned by Beth. B) Charlie could receive $1,500, because when the contract was completed, that was all that was legally owed to Beth. C) Charlie gets $0 from Allen because one can assign contractual obligations but not contractual rights. D) Charlie could receive only $1,000 from Allen because half of the $2,000 project was finished when he gave notice of the assignment to Allen. E) Charlie could receive only $1,000 from Allen because only half the work was done when the assignment was made.

Could receive $1,500; all that was legally owed to Beth

The owner of a new building wanted four maple trees, 6 metres tall, planted on the north side of the building. Lloyd Landscaper submitted his offer of four 6-metre maples planted for $800. The owner said he would pay $600 for that. Lloyd said, for $600 he would supply four smaller, 5-metre trees. The owner said, "$600 for 5-metre trees plus a Christmas tree for my kids." Lloyd was disgusted and said, "Forget it. I don't need this job." As he was leaving the owner said, "All right, I'll accept your offer of $600 for the 5-metre maples planted." Lloyd kept on walking. Which of the following is true? A) There is no contract because Lloyd's last offer had been rejected by a counter-offer. B) There is no contract because Lloyd's last offer was revoked. C) There is no contract because there is a presumption in law in these circumstances that the parties did not intend to create legal relationship. D) There is no contract because Lloyd's last offer had lapsed after a reasonable time. E) There is a contract because at one point in the conversation Lloyd was willing to sell and the owner was willing to buy four trees.

Counter-offer

Jones entered into a contract to purchase a 1957 Edsel automobile from Smith for $2,000. Unknown to Smith, Jones had an opportunity to resell that car for $5,000 to Brown, who wanted to use it as a prop in a movie being shot in town. Before the car was delivered and payment made, it was destroyed by fire, when one of Smith's employees carelessly spilled a can of gasoline in the garage where the car was kept. If the court found that the normal market value for such a vehicle was only $3,000, which of the following statements is correct with respect to the appropriate remedy that should be awarded by the court for such a breach of contract? A) The court could award $3,000. B) Because of the uniqueness of the vehicle, the court should award specific performance. C) In these circumstances, there should be no remedy since the contract has been frustrated. D) In these circumstances, the court should award $5,000, representing the lost profits. E) The court should award only $1,000, the difference between the market price and the purchase price.

Court should award only $1,000

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action? A) The plaintiff will likely be awarded a judgment for all the damages that "naturally and directly flow" from the breach. B) This clause requires the injured party to take all reasonable steps to mitigate (lessen) his losses. C) Liquidated damages only apply to losses caused by excess water, such as floods or tidal waves. D) This clause conclusively determines the amount of damages that the court can award. E) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of the breach.

Court will likely award

A woman sought to set aside a mortgage on the grounds of misrepresentation, undue influence, and non est factum. She had been persuaded to enter into that mortgage contract with a mortgage company by her doctor. Which of the following is true with regard to these challenges to the mortgage contract? A) If she were influenced to sign the mortgage by her doctor and the court found undue influence, the mortgage would be void and she wouldn't have to pay the mortgage company. B) If she failed to read the mortgage agreement, the mortgage would be void on the basis of non est factum. C) If she were influenced to sign the mortgage by her doctor and the mortgage benefited the doctor, the court would presume undue influence. D) If the court found that there was undue influence by her doctor, who obtained the money from the mortgage, she would not have to repay the mortgage company. E) If the person who misled her as to the contents of the mortgage agreement honestly thought what he was stating was correct, she could sue for only damages, not rescission.

Court would presume undue influence

Because the internet provides direct and inexpensive access to a massive audience, torts involving defamation is a primary concern. Which of the following statements regarding defamation over the internet is false. A) Material placed on the internet, via a website, where it may be accessed by a large audience, has been likened to broadcasting information on television or radio. B) Where several connecting factors exist, Canadian courts appear willing to assume jurisdiction. C) When determining damages, the size of the audience has been regarded as relevant. D) The courts are reluctant to create new categories of torts, and hence have been unwilling to consider defamation over the internet. E) Intermediaries, such as ISPs' will be liable for defamation only if they encouraged the offending behaviour, or if they knew or ought to have known of it and failed to remove it after notification.

Courts are reluctant

You decide to register a domain name "Delicious_breads_R_us.com", although you neither own a bakery nor any legitimate use for the domain name. Subsequently you receive a complaint alleging that you have registered the name in bad faith. The complainant does not hold a registered trademark in the name nor do they have a domain name registered, but they have used the business name "Breads R Us" for many years. Which of the following statements is true? A) You have a real property right in the name B) You are a cybersquatter. C) Your domain name dispute must be litigated in court. D) The complainant does not have any legitimate claim on the domain name. E) You can claim good faith justification for your the use of your domain name.

Cybersquatter

Harry agreed to make a new violin for Ted at a particularly attractive price. Before he finished crafting it, however, an opportunity arose to work as a salesman for "Joe's Fine Cars." Since it was clear that he could never make a living as a violin maker, he took the job and refused to finish the violin for Ted. Which of the following is the appropriate remedy in these circumstances? A) Specific performance B) Damages C) No remedy D) Rescission E) Injunction

Damages

Sam agreed to purchase and Joe agreed to sell a brand new Chrysler 300M that was displayed in "Joe's Fine Cars" showroom. But instead of delivering it to Sam, Joe sold it to another customer who offered him more money. Which of the following is the appropriate remedy in these circumstances? A) No remedy B) Rescission C) Damages D) Injunction E) Specific performance

Damages

Which of the following is false with regard to remedies for breach of contract? A) The victim of a breach cannot recover damages that he could have avoided if he had tried to mitigate his loss. B) A person who breaches a contract is liable for all the foreseeable loss that directly and naturally flows from the breach. C) Damages are awarded by the court to a person who has suffered loss because of a breach of an essential term of the contract, but are not awarded for a breach of a non-essential term, i.e., a warranty. D) An exemption clause that a seller claims absolves him from liability may be of no effect if the seller has committed a "fundamental breach" of the contract. E) Specific performance is an equitable remedy forcing a person to comply with the terms of the contract.

Damages are awarded

Another term commonly used where a bond is involved is A) a negotiable instrument. B) a share C) a loan. D) a personal property security. E) a debenture.

Debenture

Attachment takes place when A) notice of a security arrangement is given. B) a contract is executed. C) a purchase money security interest arises. D) a debtor receives some value under the contract. E) after-acquired assets are secured.

Debtor receives

Which one of the following statements about bankruptcy is true? A) Bankruptcy law forces a debtor to pay all his debts, regardless of his financial position. B) All creditors of a bankrupt debtor are treated equally and will receive shares of the assets directly in proportion to how much is owed to each of them. C) Bankruptcy refers to a situation in which a debtor who cannot pay debts transfers his assets to the creditors directly. D) Bankruptcy law is different in every province of Canada. E) A debtor who has been discharged from bankruptcy is released from his previous financial obligations.

Debtor who has been discharged

In which one of the following situations is a chose in action (intangible property) given as security by a debtor to the creditor? A) Mr. Jason grants a chattel mortgage on the family car to secure repayment of money borrowed for a trip. B) A programmer pawns his computer. C) A dentist assigns her accounts receivable to the bank that lent her money for the purchase of a business. D) A farmer gives his future crop to the bank as security for the repayment of money borrowed for seed. E) Jeff buys a piano under a conditional sale contract.

Dentist

Which of the following statements is true with respect to the law of damages? A) Damages are an order from the court for the breaching party to perform the contract as he or she agreed to do. B) Damages are awarded for a breach of a condition but not for a breach of warranty. C) Damages are intended to punish the wrongdoer for breaching the contract. D) If a contract contains a liquidated damages clause, the party who has breached the contract has agreed to pay to the party wronged an amount equal to all the loss that directly and naturally flows from the breach. E) A deposit is an amount of money a party to a contract agrees to forfeit if he or she breaches the contract.

Deposit is an amount

Because a director of a closely-held corporation breached his duties to the corporation, the corporation lost $15,000. Despite the urging of the shareholders, the board of directors refused to begin an action on behalf of the corporation. Which one of the following provisions would aid the shareholders? A) Indoor-management rule B) Dissent procedure C) Derivative-action provisions D) Preemptive right provisions E) Relief-from-oppression provisions

Derivative

Smith, director of ABC Ltd., intercepted a corporate opportunity for his own benefit and thereby caused the corporation to miss a $45,000 profit. A shareholder urged the board of directors to take action against him. The other directors, all close friends of Smith from school days, did not take any action against him, although they did voice their dissatisfaction with his move. Which of the following provisions would aid the shareholder? A) Indoor-management rule B) Relief-from-oppression provision C) Derivative-action provision D) Preemptive right provision E) Dissent procedure

Derivative

Which of the following is a goal of the Bankruptcy and Insolvency Act? A) Determines process by which debtors convey their assets to a trustee in bankruptcy who distributes them to the creditors B) Allow persons with impossible burdens of debt to discharge all of their debts. C) Helps incorporated companies after discharge to carry on without the same burden of debt D) Protects the interests of debtors. E) Provides alternative to criminal charges

Determines process

Which of the following is used to authenticate the identity of a person of a party to an online contract? A) Information encryption security B) File formatting C) A court order D) Digital waterboarding E) Digital certificate

Digital certificate

Which two of the following are examples of breaches of fiduciary duty? A) A director of a corporation, as director, learned of a good deal and took advantage of it for himself before the corporation had the opportunity to do so. B) A promoter of a corporation sold property to the corporation for three times what he paid for it after he made full disclosure of his interest to an independent board of directors, which voted for the purchase. C) A shareholder started a business that competed directly with the business. D) The directors of the corporation, contrary to the request of the shareholder, refused to declare dividends. E) An employer charged his employees for parking after supplying it free for years.

Director of a corporation

Where one party refuses to perform his contractual obligations, what is the risk that the second party runs if he continues to press the first party to perform? A) The contract may be discharged by frustration. B) The first party might expressly repudiate the contract and therefore not be liable for breach. C) The second party might receive more damages for which he can't recover compensation. D) The first party might breach a condition subsequent. E) The first party may continue to refuse to perform, and there is nothing the second party can do about that.

Discharged

Ellis agreed to paint Lee's house for a price of $1,500. A month before the performance was due, Lee called and told Ellis that she had changed her mind and was going to have her house restuccoed instead. Ellis insisted that they had a contract and that he was going to paint the house anyway. Lee repeated that she was not going to go through with it, but Ellis insisted the contract was still on. Before further steps could be taken by either party, Lee's house was destroyed by a freak airplane accident. Which one of the following statements describes the law applicable to these facts? A) Ellis's conduct amounted to repudiation, and Lee could have sued for breach of contract immediately after the phone call. B) The contract has been discharged by frustration. C) Lee's conduct did not amount to a breach since she told him a month before performance was due that she didn't want the house painted. D) Ellis will be able to successfully claim as damages the amount that he would have made if the contract had been performed. E) Lee could have accepted Ellis's conduct as an anticipatory breach.

Discharged by frustration

Which of the following statements is false with respect to the employee's obligation to give the employer notice upon quitting? A) The employee is not obligated to give notice to the employer and can leave the job immediately if working conditions are unreasonably dangerous and the employer refuses to take reasonable steps to correct them. B) The employee can refuse to give notice and leave immediately if the employer involves the employee in immoral or illegal activities. C) The employee can leave immediately without notice if he has a better job to go to. D) An employee is not obligated to give the employer notice where the employer gives the employee unreasonable or dangerous orders. E) The employee is obligated to give reasonable notice unless there is just cause for leaving.

Employee can leave immediately

Jones was a caterer; Smith was a florist. Jones won a contract to provide a banquet for a convention of florists. He wanted to decorate the hall with flowers. He sent a letter to Smith describing what he wanted and asked for a price quote. Smith responded by a letter dated January 5, offering to supply the flowers for $5,000. Jones received the letter on January 10 and responded on the same date saying his price was too high and that he would pay $4,500. While that letter was in the mail but before it had been received by Smith, Jones learned that the convention was on artificial flowers and the organizers wanted no real flowers on display. On January 13, Jones quickly sent another letter telling Smith to ignore the letter of January 10 and that he wouldn't need any flowers at this time. This letter of the 13th was received on the 18th. Smith had received the letter of January 10 on January 15 and sent his letter of acceptance on the same day, and he had placed orders to his suppliers for the flowers. The letter of acceptance was received by Jones on January 20. Which of the following is true? A) Jones's offer in the letter of January 10 lapsed before acceptance. B) If the postbox rule does not apply, there is a binding contract. C) The postbox rule is irrelevant; there is no contract simply because Jones can't use the fresh flowers. D) If the postbox rule applies, there is no contract because the letter of revocation was mailed before the letter of acceptance. E) If the postbox rule does apply, there is a binding contract

Does apply, binding contract

In contract cases, the court generally A) will require the recipient of a service to pay a reasonable price where it is determined that the agreed-upon price was too low. B) will rewrite an agreement for the parties if their existing agreement did not include all the essential terms. C) will enforce all promises. D) attempts to punish the party in breach of the contract by imposing a sentence. E) does not look to see if the bargain is fair.

Does not look

Which of the following would end the employment relationship by breach, thus possibly giving rise to a claim for damages for wrongful dismissal? A) The employee is told he will no longer be needed at the completion of the specific job he was hired to do, e.g. paint a bridge. B) The employee is asked to leave because a downturn in the economy has resulted in no work for him to do. C) The employee is told he will no longer be needed at the end of the period of employment specified in the contract, e.g., one year. D) The employee is asked to leave after he refuses to do a reasonable but unpleasant task that is part of his employment, when another more junior employee could have been asked to do it. E) The employee is asked to leave because he consistently comes to work late as a result of frequent morning traffic jams.

Downturn in the economy

Which of the following is primarily liable on an accepted bill of exchange? A) No one B) Endorser C) Drawer of the bill D) Drawee or Acceptor E) Payee

Drawee or acceptor

With regard to negotiable instruments, which of the following is false? A) Bills of exchange can be made payable for some future date. B) A negotiable instrument used to advance credit in a consumer transaction must be marked "consumer purchase". C) A cheque is a bill of exchange drawn on a bank, payable on demand. D) A drawer of a cheque can refuse to pay any holder of it if the drawer can prove that the payee obtained the cheque by fraud. E) A cheque that has been certified cannot be countermanded by the drawer.

Drawer of a cheque

A real-estate agent, Jones, was owed a $7,000 commission, having sold property for Mr. Quick. Mr. Quick couldn't be found, but Jones did find his wife and learned that she had over $20,000 in treasury bills. Mr. Jones told her that if she didn't assign to him $7,000 of the $20,000, he would make sure her husband was imprisoned for his debts and "for other crimes" he knew about. If she did make an assignment in writing to Jones of the $7,000 but later tried to void the agreement, she would argue which of the following? A) Mistake B) Non est factum C) Duress D) Statutory assignment E) Privity

Duress

Randal embezzled $6,000 of his employer's money and then disappeared. The employer's accountant called at Randal's residence and found out that his wife had a $3,500 term deposit.When the accountant threatened to have her husband arrested and imprisoned if she did not agree, she assigned the term deposit to the employer to help to defray the loss from the embezzlement. If the wife were later to sue for return of the term deposit, what would be her ground for avoiding the assignment? A) Non est factum B) Undue influence C) Duress D) Fraudulent misrepresentation E) Mistake of law

Duress

In the context of employment and use of the Internet, which of the following is false? A) Employers should notify employees when their use of company resources may be subject to monitoring. B) Employers can be liable when their employees misuse the Internet. C) An employer should have a clear and comprehensive policy prohibiting misuse of company resources. D) Monitoring employees' e- mail can be effective, but also raises a privacy concern. E) E-mail should be encouraged over other forms of communication, because it is inherently private.

E-mail should be encouraged

Which of the following is an advantage of incorporation? A) Shareholders owe a duty to the corporation. B) Shareholders are liable for debts of the corporation. C) There are no tax advantages as compared to a sole proprietorship. D) Shares are easily transferred. E) Shareholders can veto decisions of directors.

Easily transferred

With regard to the law governing privity of contract and assignment, which of the following is true? A) Assignments are modifications of the privity of contract rule since they allow ending the original contract and entering into a new contract with changes in terms, such as substituting one party for another. B) A statutory assignment is more difficult to enforce than an equitable assignment. C) An employee sent by his employer to do a routine job for one of the employer's customers is not in a contractual relationship with the customer. D) A party to a contract for services can assign both his contractual obligations and his contractual rights. E) Novation refers to the modifications of the privity of contract rule since it allows a stranger to the contract to receive benefits from the contract.

Employee sent by his employer

Drew got a non-union, senior management level job. After the first day, Drew came to his dad to discuss his obligations to his boss and his boss's obligations to him. Which of the following is false? A) Drew must be punctual and obedient. B) If Drew wants to quit, he must give the employer proper notice unless the employer has done some wrong, e.g., given an unreasonable or dangerous order. C) The employer owes Drew not only pay, but also some direction. D) Drew owes the employer a fiduciary duty, i.e., a duty to serve the employer's interests above his own. E) The employer cannot terminate Drew's employment unless Drew does something wrong.

Employer cannot terminate

Which of the following statements is correct with respect to the employer's liability for the conduct of the employee? A) Any employee can bind an employer in contract. B) The employer is always liable for the wrongful conduct of his employee. C) All employees are agents of the employer. D) An employer is only liable for the wrongful conduct of his employee that takes place during the course of the employment. E) If a person is injured by an employee acting in the course of the job, that person must sue the employer, not the employee.

Employer is only liable

Why is the distinction between employment and an independent contract important? A) An employee has the right to wages. B) Employees can withdraw their services. C) An employee can bind the employer in a contract he enters into on behalf of the employer. D) An independent contractor cannot be sure that he will be paid. E) An employer may be held responsible for torts committed by the employee.

Employer may be held

In the context of employment and use of the Internet, which of the following is true? A) Employers can be liable when their employees misuse the Internet. B) Viewing an employees' Facebook account is considered a criminal offence. C) E-mail should be encouraged over other forms of communication, because it is inherently private. D) Employers are not required to notify employees when their use of company resources may be subject to monitoring. E) An employer need not have a clear and comprehensive policy prohibiting misuse of company resources such as the Internet.

Employers can be liable

Which of the following is true with regard to ending a contract by performance, agreement, or breach? A) If a person properly tenders performance of a service that is rejected by the other party, he is required to try again and again. B) If one party to the contract has paid for a service, but now the other doesn't want to perform, the contract is ended by agreement as long as they both agree to call it off. C) A person has legally tendered performance if he pays a $500 debt in 25-cent coins. D) A contract can be ended by breach if there was either a breach of condition or a breach of warranty. E) A contract ends by agreement when the parties include in the contract a "condition subsequent," i.e., a clause that says the contract will end upon the happening of a specified future event that then takes place.

Ends by agreement; "condition subsequent"

Which of the following is correct with respect to restrictive covenants included in employment contracts? A) Such restrictive covenants are enforceable in court if reasonable and not against the public interest. B) The imposition of such a restriction is at the option of the employer and the employee has no say in the matter. C) For such a clause to be valid, it is only necessary to show that it was needed to protect the employer's interest. D) A void restrictive covenant destroys the whole contractual relationship and neither party has any obligations under the agreement. E) Such restrictive covenants are always void and have no place in employment contracts.

Enforceable in court

Jenny went to the store and asked to see an AM-FM clock radio with a tape deck. The salesman brought out a clock that he said had all the features that she wanted. After looking at the price tag and little else, she said she would think about it. The salesman said that this was the most popular model sold, that they sold 1000 of them during the World Series alone, that it had the highest rating in Consumer Reports, and that he only had that one left. Jenny bought it. Later she found out that all the statements made to her by the salesman were false, including the statement that the clock had all the features that she wanted, because it did not have an AM band. Which of the following is true? A) Jenny could obtain the remedy of rescission only if the statements made to induce her to contract were fraudulent. B) Jenny could return this clock to the seller only if she could prove undue influence. C) The statements of the salesman are fraudulent only if the salesman knew they were false. D) Jenny would only have a remedy for breach of contract - namely, the clock did not have an AM band - because none of the other statements was about the radio itself. E) The equitable remedy of rescission is available only if Jenny were able to restore the clock to the seller.

Equitable remedy of recission

Although Jason had participated in the flower auction for the last nine years as an agent for Thos. Holt's Ltd. (Holt), with the authority to buy whatever he felt the store needed, this day he was given express instructions to buy only cut flowers. When flats of young camellia bushes with a rare gold flower were being sold, Jason bought them on behalf of the company. Which of the following is true? A) Holt is not bound by the contract, because Jason's authority was expressly restricted. B) Holt is not bound by the contract, because Jason is in breach of his agency agreement. C) The key to determining whether or not Holt is bound by the contract is this: in the circumstances, should the auctioneer have confirmed with Holt the extent of Jason's authority? D) Holt is not bound since Holt didn't ratify the contract. E) Holt is estopped from denying Jason's authority.

Estopped

Kent incorporated Dynamite Data Ltd., which worked with small businesses in developing graphs and charts from their data for presentations to bankers, shareholders, etc. Kent lent the company $25,000 by way of a shareholder's loan and took as security computers, plotters, and printers under a chattel mortgage document. An employee of the corporation, Jack, delivering some graphs to a customer, Roth, got into an argument with Roth, who was complaining that the graph was in red and not in pink as requested. It ended with Jack punching Roth, who fell onto a microscopic camera. The damage to the nose and camera: $35,000. Which of the following is true? A) If the corporation went bankrupt but owed creditors (other than Roth), Kent would be in a worse position than unsecured creditors to collect proceeds realized from the sale of the corporation's assets. B) Even if Kent, the only shareholder, died, the corporation would not die and would still owe its outstanding debts. C) Kent is liable for the damage to Roth and the camera if neither Jack nor the employer/corporation has sufficient funds. D) Roth's action against Jack is for the tort of assault. E) The corporation is not liable for the damage caused by the action of its employee, Jack.

Even if Kent died

If you want to buy a car from a private party (other than a dealer), which of the following is false? A) If you request a search, and the central registry states that the car is free and clear of liens and encumbrances, then title is clear. B) Even if both the seller and the central registry indicate to you that the car's title is clear, you could still lose it to a third party. C) If the seller indicates to you that the title is clear, but after the sale the car is seized by someone with the legal right to do so, you could still sue the seller. D) If the seller tells you that the car is free and clear, and two months later a properly registered chattel mortgagee claims a right to the car, you could lose the car. E) If the seller makes no representations whatsoever about the car, and the car is seized by a creditor, you can still sue the seller because he had an obligation to deliver good title.

Even if both the seller and the central registry

A week after signing a contract, you became aware that you and the other party, Sheldon, seemed to have a different understanding of one of the provisions of the contract. Before you said anything to him, you reread it to see if your interpretation was valid. As you reread it, you noticed that not only was that provision vague, but also other terms and provisions were ambiguous or left out. Which of the following is false with regard to the methods used by the courts to interpret contracts? A) Evidence of a condition precedent agreed upon by the parties but not included in the written contract is admissible despite the parol evidence rule. B) The court will do its best to give effect to the intention of the parties. C) To interpret express terms, the courts will look first to the plain meaning of the term (e.g., the dictionary meaning.) D) The parol evidence rule holds that when a contract is in writing, the court will not allow evidence to contradict, vary, add to, or subtract from the written contract. E) Evidence of misrepresentation will not be admissible because of the parol evidence rule.

Evidence of misrepresentation will not be

In the process of assembling land for Ace Construction Ltd. to build a supermarket, Joe entered into a contract with the seller Sam. In which of the following situations would Sam be able to sue the principal Ace? A) Where Joe exceeded his apparent and actual authority. B) Where Joe revealed that he was acting as an agent, but did not disclose that he was acting for Ace in particular, and exceeded both his apparent and real authority. Ace did not ratify the contract. C) Where Joe was acting outside his authority and did not disclose that he was acting for the Ace. Sam was aware of Joe acting independently at the time he entered into the contract. D) Where Joe disclosed that he was acting for Ace but made the contract "subject to ratification." E) Where Joe exceeded his actual authority but where Ace had led Sam to believe Joe had the authority.

Exceeded his actual authority

Which of the following is a statement of facts to which the Sale of Goods Act would apply? A) "I agreed to give you a dozen old campaign buttons for that original signature of the Prime Minister, but received the signature of the Governor General." B) "Today is the closing date and I am willing to tender the full price in cash, namely $50,000, for the house and you are now telling me that you have no intention of closing." C) "Excuse me, there is a mouse in this beer bottle." D) "I ask for a trim! You've cut off 2 inches!!!" E) "I brought in five shirts to be laundered and you are returning only four to me!"

Excuse me

Which of the following is true with regard to ending a contract by performance, agreement, frustration, or breach? A) A person who breaches a contract is liable for all the loss that directly and naturally flows from the breach, no matter how unforeseeable. B) If a person owing money has tendered payment in a reasonable way, at a reasonable time, and it has been refused, he is free from any further obligation to pay. C) If the court holds that a contract has been ended by frustration, the damages awarded by the court will be the same as if the contract was ended by a breach. D) An exemption clause that a seller claims absolves him from liability may be of no effect if the seller has committed a "fundamental breach" of the contract. E) The victim of a breach can recover damages even for the loss he could have avoided if he had tried to.

Exemption clause

In which one of the following instances would the seller most likely succeed in an attempt to escape liability by the use of an exemption clause? A) The purchaser of goods, after the sale, is sent an invoice on which the exemption clause is printed in boldface type at the top of the first page. B) There has been a breach of the fundamental obligation of the contract, and the court holds that, on its true construction, the parties did not mean it to cover a serious breach. C) The exemption clause that covers the situation was posted in plain view and was brought to their attention at the place and time of contract. D) The store had posted at the entrance to the dressing rooms a large sign reading "Not responsible for stolen articles," and the customer lost articles in a fire that swept through the dressing rooms. E) The clause says there will be no liability for breach of a condition and the breach that occurs is minor in nature.

Exemption clause; posted in plain view

With regards to the internet, which of the following statements is true? A) Valid laws apply to the internet, and there have been no difficulties in determining what laws apply to the internet and internet transactions. B) Determining where an action should be brought has not presented any legal problems. C) Regulatory steps have been taken to overcome all problems associated with jurisdictional issues. D) Existing laws go a long way to establish rights and obligations for the parties doing business online, but the protection and enforcement of those rights can be an insurmountable problem. E) Judicial action is allowed only if the person being sued is a resident of that jurisdiction.

Existing laws go a long way

Joe sends Sanjay an offer via email from his Toronto office. The offer contains a provision indicating the offer expires at 5:00 PM Toronto time. Sanjay, who lives in Vancouver, replies accepting Joe's offer at 4:00 PM Vancouver time. Joe received Sanjay's email acceptance at 9:00 AM the next day. Which of the following statements is true? (Note the three hour time difference between Toronto and Vancouver) A) The contract became binding once Joe had made the offer. B) Joe's offer had expired. C) Once Sanjay had sent the email,, a binding contract had been formed, regardless of what time Joe had received the email. D) A binding contract had been formed, once Joe opened Sanjay's email acceptance the next day. E) Joe and Sanjay had a binding contract, since Sanjay had accepted by 4:00 Vancouver time.

Expired

Which one of the following will be excluded by the parol evidence rule? A) Evidence of implied terms B) A condition precedent C) Evidence of a collateral agreement D) Express terms E) Extrinsic evidence

Extrinsic evidence

If you hire Gnowsky to act as your agent, which of the following is true with regard to the duties which he owes to you? A) An agent may delegate his authority without the authorization of his principal. B) Gnowsky need not tell you everything relevant to his task that a reasonable person would consider might affect your decision making. C) Gnowsky need not use reasonable care, skill, and diligence in his service to you. D) His failure to obey you and to act within the authority given him would allow you to sue him for breach of contract. E) Even when Gnowsky is acting as your agent, he need not put your interest above his own.

Failure

Which one of the following is true with regard to the ending of a contract by performance? A) If a warranty is breached, the victim has no further obligation to perform under the contract. B) In law, a certified cheque is the same as cash. C) If a person owing money has tendered payment in a reasonable way, at a reasonable time, and it has been refused, he is free from any further obligation to pay. D) Legal tender consists of bills or coin in any amount. E) If a person attempts to perform services in accordance with the terms of the contract, and the buyer refuses those services, the person attempting to perform can sue the buyer with no further attempt to perform.

If a person attempts to perform

Which of the following is false with regard to ending a contract by agreement? A) A contract can be ended by one party if he finds a better deal, e.g., by cancelling an order that has been accepted, as long as this is done before performance. B) A contract can be ended by agreement by "mutual release." C) A contract can be ended by the happening of a "condition subsequent" provided for in the contract. D) A contract can be ended by agreement if one party has performed his obligation and agrees to take something as satisfaction from the other although that other hasn't performed according to the contract. E) A contract can be ended by agreement if neither party to the contract has performed his or her obligation.

Finds a better deal

Which of the following is not one of the obligations that an employee has to the employer? A) Follow all orders no matter how unreasonable B) Competence C) Loyalty D) Skill E) Be honest and courteous

Follow all

Which one of the following statements is correct with respect to the creation of a partnership agreement? A) A partnership can be created by an intention to share the revenues between the partners. B) For a partnership to exist, the relationship giving rise to it must be of an ongoing business nature, not a one-time promotion. C) A partnership can be created only by contract. D) Where two people agree to enter into a partnership, there is no partnership created unless all of the elements of a contract are present. E) For a person to be a limited partner, there must be at least two general partners.

For a partnership to exist

Kassem was a real estate agent with his own firm. Because his agency was new in a competitive field, he hired the company of Barrett and Barrett Ltd. to advise on an advertising strategy and to design ads for the newspaper and for brochures. Jack Barrett, senior employee, was handling the market research, and the employee Armstrong was doing the illustrations. When the work was complete, the ads went to press; unfortunately, after the printing, it was discovered that in all the ads and in every brochure "Kassem" was spelled "Kassim." Armstrong had made the mistake in his copy. On these facts, which of the following is true? A) If the company did not pay Armstrong, Armstrong could sue Kassem for his pay because Armstrong did do work for Kassem. B) Kassem's only recourse is against Armstrong, the employee who made the mistake. C) Kassem can choose to sue either the company or its employee Armstrong for breach of contract, but not both. D) Kassem can sue both the company and its employee Armstrong for breach of contract, since they were both connected with the job. E) For breach of contract, Kassem could successfully sue only the company, Barrett and Barrett Ltd.

For breach of contract

Tong hired Hocaloski to design an ad for her business. Hocaloski assigned the work to Peppar, her employee. After the ad was run, it was noticed that Peppar made a serious error; he gave the wrong address and phone number of the business. On these facts, which of the following is true? A) Only Peppar is liable since he made the mistake. B) Tong can sue either Hocaloski or Peppar, her employee, for breach of contract, but not both of them. C) For breach of contract, Tong could successfully sue only Hocaloski. D) Tong can sue both Hocaloski and Peppar for breach of contract, since they are both connected with the job. E) If Hocaloski did not pay Peppar, Peppar could sue Tong for his pay because Peppar did do work for Tong.

For breach of contract

Franz bought a round trip ticket to Germany to visit relatives. Unfortunately, a week before flight time, he broke his leg. He offered his co- worker, Joe, the ticket for 80% of the full price, offer to remain open until 10:00 p.m. on December 15. Indicate to Joe which of the following is true with regard to the law of offer and acceptance. A) If Joe makes a counteroffer of 50% of the full price, and Franz rejects the counteroffer, Joe can still accept the original offer. B) To create a contract, an offer must be in writing. C) A letter of acceptance is always effective when it is dropped in the mailbox. D) Franz could revoke the offer anytime before acceptance, even before 10:00 p.m. on December 15. E) If Franz sells to someone else, it is too late for Joe to accept the original offer.

Franz could revoke

To which one of the following would the Sale of Goods Act apply? A) A haircut at the local hairstylist B) A contract for the sale of intangible property C) A contract for the sale of a ranch D) A contract for future goods when title will pass in the future. E) A contract for the purchase of a house

Future goods

Which one of the following is false with regard to creditors' remedies? A) A debenture can create a "floating charge" that will not attach to anything specifically until the debtor defaults or until the happening of another "crystallizing" event. B) A person who wins in an action and is awarded damages is called a "judgment creditor." C) A guarantor may avoid liability if the creditor does some act or enters into an agreement that weakens the guarantor's position. D) A garnisheeing order is an order to the sheriff to seize assets of a judgment creditor to satisfy a judgment debt. E) A guarantor is a person who agrees to be responsible for a debt if the borrower (the person primarily liable) defaults.

Garnisheeing order

The contract for the Surrey property had been signed by both parties. Which of the following is necessary for the contract to be set aside on the grounds of misrepresentation? A) The misrepresentation must have been a term of the contract. B) The misrepresentation must have been in writing. C) The misrepresentation must have induced the party to enter the contract. D) The misrepresentation must have been a false statement of a fact; false statements of opinion are never misrepresentations. E) The misrepresentation must have been made recklessly or wilfully.

Induced the party

Which of the following constitutes a misrepresentation that would not allow the courts to award the equitable remedy of rescission? A) The seller persuaded the buyer to buy the car by misrepresenting it as having just been serviced and passing the air care test. Neither had been done, but the seller honestly believed both had been done. B) The seller was persuaded to buy the car by a misrepresentation that it had the fewest repairs of any car of its class. After the buyer learned of the truth, he kept the car for three weeks to get some benefit from it before taking it back. C) The seller concealed the broken drawer of the desk from the buyer. He would not be able to see it until he got it home. D) A man who contracted for an insurance policy did not state on the application form that he had been treated for cancer. He died from the cancer two months later. E) None of the above.

Get some benefit from it before taking it back

Gill, a wholesale fish seller, agreed to provide Blanchet's Restaurant with 1,000 pounds of fresh salmon per week throughout the months of July, August, and September. Things went as planned for July and August. However, Gill was unable to meet the requirements of the contract for the first two weeks of September because his boats simply did not catch that much, although other companies did better and the fish were available for Gill to purchase, but at a higher price than what Blanchet was paying him. Rather than sell at a loss, Gill simply did not supply during that two- week period. At the end of that period, the Federal Fisheries Department shut down the fishery altogether because of the depletion of fish. After that, no more fresh salmon were available at all. Blanchet sued Gill for breach of contract with respect to his failure to deliver any fresh salmon in September. Which one of the following statements accurately sets out the legal situation here? A) Gill was under a strict obligation to supply the fish and no excuses for failure are allowed. B) By not suing Gill as soon as he failed to deliver in the first two weeks of September, Blanchet lost the right to complain, and then the subsequent governmental closure excused his failure to deliver any fish in September. C) Gill is liable for breach of contract with respect to the first two weeks of September, but the second two weeks' failure was caused by frustration for which he was not responsible. D) The contract was frustrated for the whole month of September by Gill's inability to obtain fish in the way that he intended, and thus he is not liable at all. E) The doctrine of frustration does not apply here because this is a sale-of-goods situation.

Gill is liable for breach

With regard only to the requirement of consideration, which one of the following would be a binding contract? A) A promise by Tom to drive a co- worker to Timmins, Ontario B) A promise by Mr. Brent to pay $25 to John who found and returned Brent's wallet, which Brent didn't even know he had lost until John delivered it C) A promise to give $10 exchanged for a promise to give a can of pop D) A written promise, but not under seal, to give John $50 on Saturday E) An agreement between a contractor and a homeowner that the owner would pay an additional $1,000 if the contractor would complete the existing contract according to all its terms

Give $10 exchanged

Privity of contract applies in which of the following situations? A) Where a trust is involved B) Where an interest in land is involved C) Where an insurance contract is involved D) Where a trust has been created E) Where goods are being sold

Goods are being sold

In which of the following situations would an infant be bound by the contracts he has entered into? A) A contract for the purchase of theatre tickets. B) A contract for the purchase of a bike with which to race. C) A written contract for the purchase of a new stereo. D) A government student loan. E) A contract for the purchase of a new leather jacket, where the merchant was not aware that he had several other jackets at home.

Government student loan

Which of the following would best satisfy the requirements for a good legal offer? A) On a flyer placed on your windshield: "We have the best offer in town! A mint 1956 Chevrolet for $20,000." B) "I'll give you $1 for your new green bike." C) "The purchaser will pay $1,000 for one of the seller's laser printers, the exact model to be determined at a later date." D) "I'll pay you at least $300 for your horse, Blackie, and even more if the horse is lucky." E) "I'll drive you to Seattle on Saturday."

Green bike

In all but one of the following situations, the contract is frustrated. Identify the exception. A) Jack contracts with Bill to build a barn on his one-acre lot, but before the permit is obtained, a new law prohibits barns on less than three acres. B) Jerry, a doctor, is due to perform a heart transplant operation on Mary, and the night before the surgery his arthritis becomes so painful that he cannot hold a scalpel. C) Gregory, a trucker with whom you contracted last month to haul potatoes tomorrow, phones to tell you that his truck has broken down. D) Frank has contracted to ride Emperor, a prize horse, in the Canada Day races on July 1, but on June 28 the horse breaks a leg and has to be destroyed. E) Rudolph is due to appear in a local variety theatre that has just been destroyed in a fire of unknown origin.

Gregory

Gregory went to Collegiate Sports Ltd. with his dad, who asked for some shoes for Gregory suitable for playing squash. Gregory was given a pair of running shoes suitable only for jogging. His dad paid by cash. That evening, wearing the new shoes while playing squash, Gregory broke his ankle. In the ensuing lawsuit, the statement of claim cited the provisions of the Sale of Goods Act. Which of the following is true if it were proven that the shoes were inappropriate and the cause of the injury? A) Only Gregory can sue since he was the only one hurt. B) Gregory's father would be the proper plaintiff in this action and could win on the claim that the goods were not fit for purpose. C) This is not a sale of goods situation because Gregory's father paid by cash. D) Gregory could win for breach of contract because he made known the purpose for which he wanted the shoes to a shoe dealer. E) This is a "buyer beware" situation and there would be no remedy for anyone.

Gregory could win

Which one of the following is required to be evidenced in writing under the Statute of Frauds or its equivalent? A) Any contract involving money over $1,000 B) A contract of employment C) A contract to incur debt D) A guarantee E) Any contract involving goods

Guarantee

Elizabeth gave a guarantee to the Bank in support of a loan to Tomasz. Over the next few years, the Bank and Tomasz made a number of alterations to the loan agreement. The effect of these changes was to significantly increase the amount owing to the Bank. Elizabeth had no notice or knowledge of these changes, nor she did not consent to any such changes. What is the likely result? A) Elizabeth is bound by the changes to the loan, because guarantees are, by their nature, continuing. B) A guarantee is executed under seal, therefore it will be presumed valid regardless of defect. C) The failure to notify Elizabeth would release both Elizabeth and Tomasz from their obligations. D) Guarantees are a mere formality; only Tomasz has obligations to the Bank. E) The guarantees are likely to be invalid and unenforceable against Elizabeth.

Guarantees are likely to be

Which one of the following is just cause for dismissal? A) Absenteeism twice in the last year B) Habitual negligence or incompetence C) Refusal to work in an unsafe work environment D) No work to do E) Tardiness once in the last two years

Habitual

Which of the following statements is correct with respect to promissory estoppel (equitable estoppel)? A) Promissory estoppel means that Donna cannot revoke her offer where she has promised to hold it open for a specific period of time. B) Where Hank and Jim have a contract and Hank releases Jim from part of Jim's obligation, Jim can use that release, even though it was given without consideration, as a defence if Hank sues for breach of contract. C) Where Able requests services from Cain, the doctrine of promissory estoppel requires a reasonable price to be paid even where no specific amount was agreed. D) Where Barbra relies on Raylene's promise and suffers a loss, Barbra can sue Raylene for compensation even though the promise is gratuitous. E) Promissory estoppel refers to the principle that, where a document is in writing and under seal, it is enforceable even where there is no consideration.

Hank and Jim

Hank sold three properties for Mr. W and had been paid his commission for the first, but not for the last two. Hank had done everything according to the contract and according to the relevant statutes, but Mr. W wouldn't pay. Hank knows that Mr. W has a bank account with the Bank of Montreal and has money owing to him from a Mr. Gregory. With regard to the collecting of the debt owed, which of the following is false? A) After obtaining judgment, Hank could force the bank to pay into court an amount of money from Mr. W's account to satisfy the debt. B) If Hank got judgment against Mr. W, he could get an order commanding seizure of enough of Mr. W's goods to satisfy the judgment debt. C) Hank could sue Mr. W for breach of contract. D) Hank's claim for commission is unenforceable because he failed to secure the debt by retaining title until the amounts were paid. E) If Mr. W goes into bankruptcy, Hank may not get paid.

Hank's claim for commission

A Canadian company published an article on the internet defaming an Australian resident. The Australian resident brought action against the Canadian company. With regards to internet jurisdiction, which of the following statements is true A) Since the company was Canadian, the most convenient jurisdiction would be the province the Canadian company resides. B) Since the plaintiff lived in Australia, and the defendant was based in Canada, a third neutral country would be the appropriate jurisdiction. C) Since the plaintiff lived in Australia, and the harm was done in that country, there is a sufficient connection between the defamation and that country, and case would be heard in an Australian court. D) The Canadian company's appropriate defence would be to point out out that it is impossible to know and comply with the laws of every jurisdiction, and therefore not liable. E) Since the plaintiff lived in Australia, and the harm was done in that country, there is no connection between the defamation and Canada, and appropriately there is no jurisdiction.

Harm was done in that country, there is sufficient connection

For the purpose of building a playhouse for his sons, Andy went to Lumberlore Ltd. and bought, with his charge card and without talking to a salesperson, the following things: a drill, lumber, and a six-foot step ladder. While working on the project, Andy noted that the drill worked but it was not powerful enough to drill into the 4x4 inch posts the playhouse needed for support. When he went toward the house to get his car keys, he found his wife unconscious. She had used the ladder to take some leaves out of the gutter, and it buckled under her weight because of its faulty design. Which of the following is true? A) Andy's wife would have no cause of action against the manufacturer of the ladder in tort. B) The sale of the items he bought are not covered by the Sale of Goods Act because he used his charge card. C) Andy would have an action against the seller for breach of a condition of the contract for the drill because it wasn't fit for his purpose. D) Title for the goods passed to Andy at the time of contract but that does not preclude him from his remedies. E) Andy would have no cause action against Lumberlore Ltd. for breach of a condition

Have no cause action against Lumberlore

As the fishing season slowed down in the fall, Bob decided that this might be a good time to find a real bargain in used equipment for his boat. He found a navigation instrument for sale for $15,000, a great price. However, he only had $10,000, so he borrowed the other $5,000 from the bank. He also signed a chattel mortgage on the equipment as collateral in favour of the bank, which promptly registered its interest in the Personal Property Registry. Bob made his payments for a while, but things started to go badly for him. He was unable to make any further payments, although he still owed over $3,000. Desperate and not thinking too clearly, Bob sold his boat to his friend Claude for $50,000 and left for Central America with the funds. When the bank realized what Bob had done, it located the boat and demanded that Claude pay off the $3,000+ or lose the navigational equipment. Claude was outraged because he had paid Bob in good faith and argued that he had never borrowed anything from the bank and therefore owed it nothing. Which one of the following statements accurately describes the legal situation here? A) If Claude is unwilling to pay off the $3,000, the bank has the right to remove the equipment from the boat. B) If the bank does seize the equipment and sells it for $2000, the bank can still sue Claude for the the $5,000. C) Because Bob transferred the boat and equipment to Claude, that was an assignment of his obligations and he no longer owed the debt. D) Claude is right, and the bank's only remedy is to sue Bob. E) If the bank had failed to register the chattel mortgage, it would still have a better right to the equipment than Claude, because the mortgage was signed before Bob sold the boat to him.

If Claude is unwilling to pay

Holtz hires Joe, a builder, to convert his attic into an apartment, so that Holtz's mother can move in. Joe employs two carpenters, an electrician, and a plumber to do the actual work. When making payments to Joe, Holtz holds back the 10% required by statute. After waiting the legislated minimum period, Holtz discovers that several liens have been registered against his property. It turns out that Joe failed to pay the various subcontractors for their work. Which one of the following statements best describes Holtz's position? A) Holtz has no liability to any of those involved with the job except Joe, because he has a contract only with Joe. B) Holtz bears the sole liability to the lien claimants for any debts arising out of their work on his property. C) Holtz and Joe are equally liable to the lien claimants, because of recent amendments to the builders' lien legislation. D) If Holtz has complied with the statutory requirements, his obligation will be limited to the amount of the holdback, even if the amount owed under the liens far greater. E) Holtz's mother will be liable to both Holtz and the lien claimants, as she will be taking the benefit of the renovations.

If Holtz has complied

Joe was in a bar and saw his friend Sam. Sam had a considerable amount to drink. Sam offered to sell Joe his Porsche automobile for only $15,000. Joe made sure to have Sam sign a written agreement to that effect. The next day, Joe went to pick up the car, but Sam didn't remember anything about it. Even when Joe showed him the written agreement signed by him, Sam refused to deliver the car. Joe sued. Which of the following correctly states the legal position of the parties? A) If Joe can show that there was no indication that Sam was drunk, even though Sam was completely incapacitated, he will be required to go through with the deal. B) Being drunk is no excuse; the contract is binding. C) Sam will not have to go through with the deal because no money has yet changed hands. D) Sam just has to show he was legally intoxicated, and he will not be bound. E) As long as Joe can produce the agreement in writing, there is nothing Sam can do to get out of the deal. Once Sam has signed the document, he is responsible for its contents.

If Joe can show

Jon was developing a computer program for use by owners of track clubs, which would aid them in keeping records of the members, their runs, times, injuries, etc. Eager to finish the program, Jon, in Edmonton, called his friend Sam, in Calgary, and offered him $4000 to help: five hours a working day, five days week, for five weeks. Sam said that he would have to think about it. Jon told Sam that he was eager to get going, but that he would hold the offer open until Friday, February 6, 2011, at noon. Which of the following is true? (Read each separately.) A) If the court held that acceptance by mail was reasonable in the circumstances, if Sam accepts by mail the place of contract is Edmonton. B) If Jon goes ahead and hires Betsy from Edmonton at noon on February 3, it would be too late for Sam to accept. C) If Jon revokes his offer before Friday noon, Sam could sue him for breach of contract because he promised to hold it open. D) If Sam accepts by phone within the time specified in the offer, the place of contract would be Calgary. E) If Sam wants to ensure the promise to keep the offer open until noon, February 6, he should give Jon some consideration (that is, allow him to purchase an option)

If Sam wants to ensure

Vanderhoort contacted Prinz to buy a new furnace that burned both wood and oil. Prinz, who bought the furnace directly from the manufacturer, also installed it. The furnace was defective; it malfunctioned and caused a fire that destroyed the house of the buyer and the belongings of a visitor. Which of the following accurately sets out the legal position of the parties? A) The visitor could sue both seller and the manufacturer. B) The damages to be claimed from the seller are limited to the total charged for the sale and installation. C) If the reason for the fire was a defect caused at the factory, Vanderhoort could only sue the manufacturer for negligence. D) Vanderhoort could sue only seller. E) If Vanderhoort successfully sued the seller, the seller could then sue the manufacturer.

If Vanderhoort successfully sued

Which one of the following correctly indicates the position of the parties in respect to contracts involving minors? A) All contracts with minors are void. B) An infant can enforce a contract made by an adult with him despite that fact that he is a minor. C) Contracts with minors are void, except beneficial contracts of service. D) An adult cannot sue the infant on the contract even if the infant affirms the contract after reaching the age of majority. E) Contracts with minors are unenforceable by the infant against the adult and by the adult against the infant.

Infant can enforce a contract

With regard to the law governing privity of contract and assignment, which of the following is false? A) Where the assignor assigns the same debt to two or more persons, if the promisor (debtor) pays out, in good faith, to the first assignee to give him notice, he has no further obligation. B) If a promisor (debtor) accidentally pays out to the assignor after receiving notice of the assignment, he is free from any obligation to the assignee; the assignee must look to the assignor for payment. C) Novation refers to the ending of the original contract and entering into a new contract with changes in terms, such as substituting one party for another. D) An exception to the doctrine of privity of contract is a contract granting an interest in land. E) A statutory assignment is easier to enforce than an equitable assignment.

If a promisor (debtor) accidentally

Requirements of a contract include capacity of the parties to contract, legality, and intention of the parties to be legally bound. Which of the following is false with regard to these elements? A) A seller that contracts with an infant cannot avoid the difficulties of enforcing the contract by suing him in tort instead of breach of contract. B) A restrictive covenant prohibiting one party to the contract from competing with the other is enforceable if it is reasonable between the parties and not contrary to public policy. C) A person with mental incapacity might still be held to a contract even if, at the time of the contract, he didn't understand the nature and quality of his act. D) The court can presume the intention of the parties to be legally bound, but a party to the contract can bring forward contrary evidence to rebut the presumption. E) If an adult cannot sue the other party to the contract because he is a minor, neither can the infant sue the adult.

If an adult cannot sue

The law attempts to help persons who may feel forced to enter contracts. Which of the following is false with regard to the law of undue influence, duress, etc.? A) If a contract favours the stronger party in a relationship (e.g. if a lawyer bought property from a client at far below the market value), the court would presume undue influence, i.e., that the stronger party abused his dominant position. B) Independent legal advice given to a person who wants to give a gift to a dominant person (e.g., his doctor) is good evidence to rebut a presumption of undue influence. C) If the court presumes the existence of undue influence, the person asking for the return of the property will automatically get it back. D) An unconscionable transaction is one in which one party has been seriously taken advantage of, and the courts, in their equitable jurisdiction, can set such a contract aside. E) A contract entered into because of a threat of violence is voidable at the option of the victim.

If court presumes the existence

Which of the following statements is correct with respect to remedies for wrongful dismissal? A) It is up to the employee to determine the amount of notice he should have been given. B) If the employee gets another job within the period of notice he should have received, that will affect the amount of damages he will receive. C) The damages that are payable to the employee are calculated on the basis of what the employee would have received had he been given reasonable notice whether he gets another job or not. D) The court will issue an injunction to prevent the employer from hiring someone else to take the employee's place. E) The court will usually order the employer to take the employee back.

If employee gets another job

One afternoon while Mr. Reston was going home on the bus, his neighbour, Mr. Outovit, offered to sell Reston his car for $4,000, a bit below the market value. Reston said, "You might change your mind on that. Better not be too hasty with your offers." Outovit answered, "I want to sell it quickly,"and wrote on the back of an envelope, "I hereby offer my neighbour, Reston, my 2011 Chevrolet for $4,000 cash." He signed his name. Reston wrote, "I accept." The next day, Reston went to his neighbour's house to pay the money and get the car. He learned that Outovit was in hospital suffering from a reaction to medicines given him the day before. If Outovit (or his legal representative) refuses to honour the contract on the basis of mental incapacity, which of the following is true? A) Outovit won't be bound by the contract because there hadn't yet been the payment for, or delivery of, the car. B) If it is established that Reston didn't know Outovit was incapacitated at the time of contract and that the deal was fair, Outovit will be bound by the contract even if he didn't understand the nature and quality of his act. C) To get out of a contract on the basis of insanity you have to be institutionalized. D) Outovit need only prove that he didn't understand the nature and quality of his act to void the contract. E) If Reston can show the written contract, Outovit has no argument and will be bound to honour the contract.

If it is established that

Bob, owner of a pizza business, went with his wife to pick out a new family car. Since they already knew the make and model they wanted, it did not take long before the contract was signed by the wife for a new 2012 Oldsmobile. While the paperwork was being done, Bob had been talking with another salesman about the used cars on the lot, telling him that he needed a mechanically sound car but not a new car for his business. The salesman showed him one that he said was in good shape and would give several years of service. Bob made a very low offer that the salesman accepted, much to Bob's surprise. The contract Bob signed, like his wife's, contained a clause exempting the seller, B & S Motors, from liability for breach of any warranties, including any implied warranties under the Sale of Goods Act. A few weeks after the sale, the wife and daughter were injured in an accident caused by the faulty steering mechanism of the new car. Furthermore, the used car was not in good shape and lasted weeks, not years. On these facts, which of the following is true? A) The daughter could sue B & S Motors for negligence. B) The wife could not succeed in an action against B & S Motors, because there is an exemption clause in the contract of sale. C) The daughter could sue B & S Motors for breach of contract. D) An exemption clause is always effective in exempting the seller from liability. E) If legislation in the province prohibits a seller from overriding the requirement that goods be fit and of merchantable quality in consumer transactions, the wife may win for breach of contract.

If legislation in the province prohibits

Which of the following statements is correct with respect to the process by which a union organizes the work force of an employer? A) The employer can refuse to have anything to do with the union even after it has successfully completed the certification process. B) An employer can refuse to recognize a trade union or have any dealings with it. C) Once the union has been certified, the employer must consent to what the union demands in the new contract. D) A union can call the employees it has organized out on strike to force the employer to recognize and deal with that trade union. E) In most provinces, a trade union must receive government certification through an employee voting process before it has the right to represent the employees in dealings with the employer.

In most provinces

In his last year of high school, Larry, a minor, saw a friend's computer and felt that the word-processing function would help him get through high school. He visited Computer Heaven Ltd. and contracted for an Apple Macintosh, printer, paper, and the program. The total cost was$4,000. He paid $1,800 down and promised to pay another $300 next July 3, his birthday, the remainder to be paid in monthly installments of $100. Larry made the July 3 payment and some of the monthly payments, but by then had graduated, thanks to his passing mark in English, and didn't have a use for the computer anymore. Furthermore, he wanted to save his money for a down payment on a compact disc player and speakers. When he quit making payments to Computer Heaven, the balance outstanding was $1,700. On these facts, which of the following is true? A) If the July 3 payment was made after he reached the age of majority, Computer Heaven Ltd. can successfully sue Larry for breach of contract. B) Computer Heaven Ltd. can enforce the contract even though he is a minor because Larry has paid over one half of the agreed-upon price. C) Computer Heaven Ltd. can sue Larry for breach of contract if it sues Larry after he reaches the age of majority. D) Computer Heaven Ltd.'s only chance for any money would be if Larry accidentally causes the computer to break down. In that instance, it could sue Larry for negligence to get around the difficulties in contract law. E) Computer Heaven Ltd. must suffer the loss because all contracts with minors are void.

If the July 3

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) Since the corporation is a legal fiction, all of its activities must be carried out through principals. B) The corporation is more highly regulated and less free of government regulations and control than a broadly held corporation would be. C) As director, each owes a fiduciary duty to the creditors of the corporation. D) 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. E) Each of them, as directors, owe a fiduciary duty to each of the others, as shareholders.

If the affairs

An 80-year-old woman signed, in the presence of a solicitor, a contract for land by which she sold property to her daughter. She later asked the court to set the contract aside on the grounds of non est factum (mistake) and undue influence. Which of the following is true with regard to these grounds for the contract? A) She can successfully use the plea of non est factum if she was not misled about the very nature of the document. B) If the lawyer were the daughter's husband, his advice would be seen as independent legal advice. C) If the aged mother received independent legal advice, it would be good evidence for the daughter that the mother's transferring the property was done freely, without undue influence being exerted. D) She can successfully use the plea of non est factum if there is evidence that she was careless when she signed the document. E) If the court presumes that undue influence was used by the adult who gained from the contract with an aged parent, the contract is automatically set aside.

If the aged mother received

With regard to the law concerning misrepresentation, which of the following is true? A) The case law allows a remedy for an opinion given by a non-expert. B) A misrepresentation can be a true assertion of fact that induces (persuades) the party to contract. C) Damages as a remedy are not available where the misrepresentation becomes part of the contract. D) Rescission is available as a remedy for misrepresentation only if it is innocent misrepresentation. E) If the buyer realizes the seller persuaded him to contract by a misrepresentation, he will not be able to get the remedy of rescission if he was tainted with wrongdoing himself, i.e., not coming with "clean hands."

If the buyer realizes

When John bought a car from his father's old classmate, Joe, he was only seventeen years old. The price of the car was $5000. He paid $1000 down and was to pay the remaining $4000 over time.With these facts in mind, which of the following statements is true? (Read each statement separately.) A) If John has an accident and refuses to pay the balance, Joe could successfully sue John for breach of contract. B) If Joe didn't realize John was only 17 years old, he can enforce the contract against him no matter what his age. C) If the car is defective, John could sue Joe for breach even though Joe could not sue him. D) If John has an accident because of his negligent driving and he refuses to pay, Joe could successfully sue him in negligence to get around any difficulty in suing him in contract. E) Even if the car is defective, John could not sue Joe.

If the car is defective

With respect to having the court set aside a contract on the basis of undue influence, which of the following is false? A) If you are a dominant person in relation to an aged relative who wants to sell you his house below market value, you should insist that the aged relative receive independent legal advice. B) If the court presumes the existence of undue influence, the person asking for the return of the property will automatically get it back. C) Where undue influence is established, the resulting contract is voidable, not void. D) If a client transferred property to his lawyer and later claimed the transfer was due to undue influence, the law would presume the transfer was due to undue influence. E) A contract made in favour of a dominant person who exerted undue influence over the weaker party is voidable at the option of the weaker party.

If the court presumes

Smith ran a software-design business. He needed someone to handle some of the product demonstrations, so he hired Janet to do this work. In the employment contract, he insisted thatJanet promise that if she left the firm, she would not work for Smith's competitors within a stated period of time and within a stated geographical region. If Janet now wishes to leave the job, indicate the statement that accurately describes the likely effect of her promise. A) Such promises are valid only if given under seal. B) If the court thinks that such a promise is reasonable between the employer and employee and that the public interest will not be damaged, then it will enforce it. C) Such promises are invariably held to be valid when they are part of the terms of employment and thus are given in consideration for getting the job. D) Such promises are in restraint of trade and thus the courts invariably hold them to be invalid. E) If the court holds such a promise to be invalid, then the whole employment contract is necessarily void as well.

If the court thinks that such a promise to be invalid

Joe saw an ad in a paper for the sale of a house in a residential area of Victoria. He approached Sam, the owner, and after some negotiation Sam orally agreed to sell the house to Joe for $50,000.Joe gave Sam $10,000 cash as a partial payment, the rest to be given upon transfer of the house.Two days later, Sam changed his mind and sent Joe a letter referring to the deal and stating that he would not honour the agreement. Which of the following is correct with respect to the legal position of the parties? Assume all the facts can be proved. A) The contract is void unless it has been partially performed. B) Sam is not bound by the agreement as the contract was not in writing. C) Even if the letter gives evidence of the deal in writing, it cannot satisfy the requirement of writing. It is the whole contract that must be in writing. D) Sam will not be bound because no oral agreement is ever enforceable. E) If the letter mentions the important terms (such as price) and identifies the specific property, Sam must go through with the contract.

If the letter mentions

The owner of the house had contracted with a general contractor, Mr. Hadrian, for a greenhouse addition to the house at a cost of $20,000. In accordance with the legislation, the owner withheld 10% and waited the legislated period of time within which any liens are to be filed. Which of the following correctly describes the owner's liability? A) The owner is liable to any unpaid subcontractors, whether or not a lien was filed, but can use the holdback money to reduce his liability a certain extent. B) Whether or not there are liens registered, the owner is free to pay out the retained holdback once the legislated time period has expired. C) If the owner checks the registry and there are no liens registered, he is free to pay out the retained holdback. D) Lien holders would have no claim against the property but would be entitled to the 10% holdback, in addition to being able to sue the owner for the amount not satisfied by the holdback. E) Unpaid subcontractors can no longer place liens on the owner's property, because of the doctrine of privity of contract.

If the owner checks the registry

Dave and his sister Chris made unusual kites. They both created the designs; Dave made the patterns. Friends had always wanted to buy their kites. After Chris completed a college marketing program, she began to talk to Dave about going into business selling kites. Ed, a friend of Chris's, wanted to be involved. He said he could buy the supplies and do the other odd chores. They decided to try to make a go of it and to share the profits as follows: Dave 35%, Chris 35%, and Ed 30%. Things went well for 7 months. They even hired George to deliver kites to the increased number of stores buying them. Unfortunately for business, Chris and Ed became romantically involved. This was followed by a heated dispute. Ed disappeared with $1,300 collected from customers and $600 worth of supplies, which he had bought on behalf of the business from their regular supplier. At about the same time George negligently broke a customer's $200 lamp when he was delivering a kite. On these facts, which of the following is true? A) If the partnership funds are not sufficient to pay the partnership debts, the creditors can look to the individual partners for payment. B) Although George broke the lamp while delivering kites, the partners are not liable, because it was George's own fault. C) Since Dave, Chris, and Ed did not sign a partnership agreement, they are not considered a general partnership. D) Only Chris would be responsible Ed's misapplication of the customers' money. E) When Ed buys supplies for the business on credit, he is acting as an agent for the business and he alone is liable for those debts.

If the partnership funds

A company in the delivery business bought a $29,000 truck under a conditional sale contract. Because of business reverses they are now unable to make the payments. Which of the following is accurate with respect to the legal position of the parties? A) The seller would have been in a far more favourable position if it had obtained a chattel mortgage instead of using a conditional sale agreement. B) The creditor would have to serve notice on all interested parties before it could seize the truck. C) The seller would have to get a court order before it could seize the truck. D) If the secured creditor seized the truck, under the Personal Property Security Act the debtor has a set period of time in which to pay what is owing and costs and get the truck back. E) The remedy of the conditional seller, as a secured creditor, is limited to the seizure of the truck.

If the secured creditor seized

John bought a car for $5,000. Shortly afterwards, a bailiff acting for an unpaid chattel mortgagee who had properly registered his claim in time seized the car. In which of the following circumstances will John be least likely to recover what he is owed? A) If the seller told John that the car was free and clear of any encumbrances after John asked B) If the seller told John that the car was free and clear of any encumbrances even though John didn't ask C) If the seller can no longer be located. D) If neither John nor the seller said anything about whether the car was free and clear of encumbrances E) If John forgot to check the registry for liens or encumbrances

If the seller can no longer be located

Consider the following statements about the use of personal property as security for a creditor in a creditor-debtor transaction. Indicate the false statement. A) If the required procedures have taken place, a potential buyer from an unscrupulous debtor who has already given personal property as security will be protected; i.e., the creditor will either have registered his interest in the public registry or will have actual possession of the collateral. B) Regardless of the type of personal property involved, whether tangible or intangible, as long as it is being used as security then the transaction is governed by the Personal Property Security Act, and thus an unpaid creditor may be able to repossess them. C) Before a creditor who has been promised an interest in personal property as security can claim priority rights, two processes must have taken place: the security interest must have attached to the collateral item, and the security must have been perfected. D) If the transaction involves the use of consumer goods as collateral, upon default of payment by the debtor, the creditor can seize the goods and sell them, but also always retains the right to sue the debtor on his personal covenant to pay for any deficiency. E) Real estate professionals need to be aware of the Personal Property Security Act because items that constitute fixtures under real property law may also constitute chattel security, and thus an unpaid creditor may be able to repossess them.

If the transaction involves

A requirement for the existence of an enforceable contract is that the parties have the legal capacity to contract. Which of the following is incorrect with respect to the law of incapacity? A) If someone contracts with an insane person but there was no indication of mental illness, the contract can be binding. B) A contract by an insane person for necessities, such as food, is binding. C) If a mentally impaired person cannot avoid a contract on the basis of insanity, the court could still set the contract aside for being an "unconscionable" transaction. D) If you knew that you were negotiating a new lease, but that you weren't being as effective as you wanted to be because you had been drinking, you can have the resulting contract set aside. E) The law governing contracts with persons intoxicated by alcohol or drugs is the same as the law governing contracts with the insane.

If you knew that you were negotiating

You have been asked by two fellow graduates to join them in incorporating a closely held corporation that would commence a consulting business. One was in your class, so you know him quite well, but the other is graduating from a different school. You have been discussing the law to review the protection it gives you. Read each of the following statements separately and indicate which is false. A) A shareholder's agreement would lessen any misunderstandings about rights and obligations. B) If you each take one-third of the first allotment of the shares, you will necessarily be a minority shareholder. C) If you have preemptive rights and the directors decide to issue a new allotment of shares, the corporation must offer you a portion of the new issue to allow you to keep your proportional share of the corporation. D) If you were voted out as a director by the others, who could show that it was in the best interests of the corporation, you could always sell your shares to any interested buyer without interference from the other directors. E) As a shareholder, you will have the right to vote for the directors, who in turn will choose the officers.

If you were voted out

You are in debt to three creditors for $200,000, and the debt is increasing because you are not able to meet your monthly financial obligations. Which of the following is false with regard to your situation? A) The Bankruptcy and Insolvency Act provides a procedure to avoid bankruptcy by making a proposal to your creditors for satisfying their claim B) It is illegal for you to transfer assets to a spouse or friend to shield them from your creditors C) If your long-time financial well-being would be served by bankruptcy, you must ask your creditors to begin the procedure; you cannot begin it yourself. D) If you become bankrupt, your assets are conveyed to a trustee in bankruptcy who deals with them for the benefit of your creditors. E) If you become bankrupt, you are restricted from carrying certain activities until you are discharged.

If your long time financial well being

Which of the following best describes an illegal contract? A) A contract that lacks consensus, consideration, capacity and intention B) A contract that has been breached by one of the parties C) A contract that is illegal in the way in which it was performed D) A contract that is illegal at the time it was formed E) A contract that results in civil litigation

Illegal at the time it was formed

If you buy a toaster from a second-hand dealer of small appliances, which of the following is true? A) The Sale of Goods Act prohibits the seller from exempting himself from liability in the event that the toaster is not fit for purpose. B) The risk of loss depends on who has possession of the toaster. C) There is an implied term of the contract that the seller has good title, i.e., the right to sell it. D) The Sale of Goods Act does not apply. E) Title to the toaster would pass at the time the buyer would pick it up the next day.

Implied term of the contract

Which of the following is true with respect to the application of intellectual property law to the Internet? A) If a user accesses a web site on which a trademark appears, an actionable infringement has taken place. B) Because of the "wild west" nature of the Internet, web sites have typically been exempt from traditional trademark and copyright laws. C) Copyright law provides the owner of electronic material with the legal right to prevent unauthorized copying, but does not give the owner any exclusive rights to rent it or otherwise control its use. D) In Canada, the design of an integrated circuit embodied in a computer chip is protected by a specific statute created for that purpose. E) The Napster trial and other high-profile cases have shown the courts remain powerless to stop abuse of intellectual property rights on the Internet.

In Canada

Here comes your neighbour Max who wants to ask you more questions about buying an Apple computer for use at home under a conditional sales contract. Which one of the following statements told to him at work is true? A) If Max has paid two-thirds of the amount owing under the conditional sale contract, the conditional seller could never seize the computer, even if Max were in default. B) Max's rights would be much greater and his obligations fewer if he bought it under a chattel mortgage rather than a conditional sales contract. C) In a conditional sales contract, the result of satisfying the condition is that the lien or charge will be removed from the goods used as security. D) If Max were in default, the conditional seller could sell the computer and keep all the proceeds of that sale, even if they were greater than the debt and costs. E) If Max is in default and the conditional seller seizes the computer, the relevant statute provides that it can be sold immediately with no further notice to Max.

In a conditional sales contract

With respect to a sale of goods, which one of the following statements is false? A) 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. B) The Sale of Goods Act permits commercial parties to exclude the Act if they mutually want to. C) 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. D) 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. E) 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.

In a retail sale of new goods

Slipstream bought a new lawnmower for mowing his own yard at home from Mulcher Mowers Ltd., a lawn and garden tools dealer in Vancouver. Unfortunately, while there were no major defects with the machine, a number of small things kept going wrong: the blade kept going out of adjustment, the starter rope broke twice, a wheel fell off, the handle loosened and wobbled, and the machine stalled in heavy grass. During the summer, Slipstream had it repaired six times. These small annoyances continued and finally, in disgust, he returned the mower to Mulcher. However, Mulcher's manager (a university graduate) pointed out to Slipstream that their contract contained a very extensive exemption clause excluding "all conditions or warranties, express or implied, statutory or otherwise," and refused to accept the mower back or to return Slipstream's money. Slipstream commenced legal action. Which of the following statements best describes Slipstream's legal situation? A) All such exclusion clauses are void. B) The Sale of Goods Act prohibits the use of such exclusion clauses generally. C) Such clauses are only effective when there is a breach of the fundamental term of the contract, which is likely not the case here because the defects were all minor. D) Such clauses are always effective just as long as the two parties have agreed to their inclusion in the contract. E) In a sale of new goods by a dealer to a private consumer for his own use, legislation prohibits the seller from excluding these basic warranties with respect to fitness and quality.

In a sale of new goods by a dealer

Mrs. Johnson is thinking of selling some property to her son. Which of the following is correct with respect to intention when entering into such a contract? A) Commercial contacts are always binding, no matter what the stated intention. B) Since domestic relationships are serious, there is a legal presumption that in such relationships there is an intention for the parties to be legally bound by their agreements. C) When intention is the issue, there is never any presumption for or against intention; the courts will always apply the reasonable person test. D) In domestic agreements, there is a presumption that there is no intention to be legally bound. E) In commercial arrangements, there is always an intention to be bound by agreements no matter what the parties state to the contrary.

In domestic agreements

Which of the following is correct with respect to the law of intention? A) Since domestic relationships are serious, the parties to such relationships are always bound by their contracts with each other. B) In commercial arrangements, there is always an intention to be bound by agreements no matter what the parties state to the contrary. C) In domestic agreements, there is a presumption that there is no intention to be legally bound. D) Where intention is the issue, there is never any presumption for or against intention; the courts will always apply the reasonable person test. E) Since domestic relationships are serious, there is a legal presumption that in such relationships there is an intention for the parties to be legally bound by their agreements.

In domestic agreements

Which of the following statements is correct with respect to workers' compensation? A) Workers' compensation is a voluntary system in place whereby employers, should they so desire, participate in an insurance program covering accidents that take place on the job. B) When an employee is injured on the job, the workers' compensation system gives that employee the choice of claiming workers' compensation or suing the employer or fellow employee who caused the injury. C) The workers' compensation system is totally financed through government grants. D) Workers' compensation in each province is a compulsory program whereby employers participate in an insurance program covering accidents and disease arising from the job. E) If an employee is hurt on the job and it is his own fault, he will not be covered by workers' compensation.

In each province

In jurisdictions other than British Columbia, which of the following is correct with respect to the law of infants? A) If the adult did not know he was dealing with an infant, the adult is not bound by the contract. B) An infant is not bound to repay his government student loan. C) An infant is bound by his contract for necessaries and beneficial contracts of service. D) A contract with an infant is "absolutely void" except those contracts for necessaries and beneficial contracts of service. E) An adult cannot enforce any contract against an infant while the infant is still under age unless the contract is made binding by another statute (e.g., government student loans).

Infant is bound by

Rick was a talented computer programmer and had agreed to work for Bill in his successful computer software business, signing a one- year contract to that effect. On the day he was to start work, and after a week of training where he learned a considerable amount of confidential information about Bill's operation, he phoned Bill and announced that he was going to work for Bill's competitor instead. Which of the following is the appropriate remedy in these circumstances? A) Accounting B) Injunction C) No remedy D) Rescission E) Specific performance

Injunction

Patrick paid the seller of a car with a worthless cheque. He then sold the car to an innocent person who paid him good consideration. Patrick took the money and left the country. The original seller found out who had the car and wanted it back. Who is entitled to the car if the court holds that the contract between the original seller and Patrick is voidable? A) The original seller, but he must pay compensation to the innocent party B) Original seller C) Innocent purchaser D) The innocent purchaser, but he must pay damages to the original seller E) Patrick

Innocent purchaser

If an offeror makes an offer that states, "This offer to be open until noon tomorrow," which of the following does not, in law, end the offer? A) An inquiry by the offeree B) Lapse of the offer at the time specified C) A counter-offer by the offeree D) The insanity of the offeror E) Revocation of the offer by the offeror before the time specified, i.e., before "noon tomorrow"

Inquiry

Assuming that all other elements of a contract are present, which of the following would most likely be held to be a binding contract, considering only the requirement that the object of a contract must be legal and not contrary to the public interest? A) A life insurance policy bought by Harvey insuring the life of his neighbour Kneival without Kneival's consent B) A provision in a contract of employment where the employee agrees that, upon leaving, he will not work in a similar business anywhere for 5 years C) An agreement in which Fred agrees not to bother his father anymore D) An insurance policy paid by a shareholder to insure the business premises of a company he holds shares in E) An agreement to pay $500 to Mildred if Mildred spreads the false rumour that Helen, a nurse, has AIDS

Insurance policy

The employee's right to strike is limited to which of the following types of disputes? A) Jurisdictional dispute B) Rights dispute C) Interest dispute D) Recognition dispute E) Commercial disputes

Interest

Tahmineh was very upset to find herself short of cash, after her roommate had moved out without paying her share of the month's expenses. Tahmineh had no choice but to borrow money from QuickMoney Loans. Without getting legal advice, she signed a contract in which she agreed to payback the money along with interest. The interest clause provided that interest was to be calculated at the rate of 2 percent per month. Tahmineh failed to pay back all of the funds and QuickMoney Loans sued her. What argument might she successfully raise to limit the amount of her obligation? A) Because the actual interest rate was over 1 percent per month, the interest provision was contrary to the Criminal Code. B) It is unlawful to charge interest to a person in a vulnerable state. C) Because Tahmineh was upset over her roommate moving out, she lacked capacity to agree to the terms of the contract. D) The Interest Act provides that in any contract where interest is payable, interest must be stated as an annual rate. E) Because Tahmineh did not receive independent legal advice, the loan agreement is void.

Interest Act provides

Eastside Nurseries Ltd., which had long been a family business, was faced with a demand by its workers that it recognize their new organization, a union, for the purposes of collective bargaining. The union was certified by the appropriate governmental board as the bargaining agent for this bargaining unit, but the parties could not reach an agreement as to what should be included in the new collective agreement. Eventually the Eastside Nurseries locked out the employees. This sort of dispute is called A) jurisdictional dispute. B) recognition dispute. C) interest dispute. D) rights dispute. E) arbitration dispute.

Interest dispute

While at work, Neil would spend a considerable amount of time on the Internet. After multiple warnings, Neil was fired from his job as a result. To get back at his boss, Neil anonymously posted several untrue and offensive messages about his boss to an Internet discussion board frequently visited by his employer's customers and suppliers. Which of the following is true? A) If Neil's former boss notifies Neil's internet service provider about the offensive messages, the internet service provider should not remove the messages, because free speech is the cornerstone of the Internet. B) Neil's internet service provider could be forced to disclose the source of the discussion board postings. C) Because the messages were posted anonymously, Neil could not be held liable for such discussion board postings. D) Because the Internet remains largely unregulated, neither Neil nor his internet service provider could be held liable for such discussion board postings. E) Neil's internet service provider, not Neil, is the one facing liability for defamation, because it is the one technically publishing the offensive material.

Internet service provider could be forced

All of the following contracts would be illegal, and not binding on the parties, except A) a contract between camera dealers whereby they agree not to sell a specific model of camera below a specified price. B) a contract in which lawyer agrees to represent an accused where the accused did commit the crime. C) a contract whereby one person agrees to sell a banned substance (e.g., cocaine) to another. D) a contract whereby one person agrees to spread false and damaging information about another. E) the act of paying for sexual favours (prostitution).

Lawyer agrees to represent

Clive and Bill were not friends but worked in the same firm. Both worked with computers and had computers at home. They entered a contract in which Clive agreed to sell Bill his "Apple, printer, and a compatible word-processing program for $3,000." When Bill went to take delivery of goods, he realized that there had been a great mistake. He thought Clive was selling his Apple Macintosh. By "Apple" Clive meant his Apple IIe. Furthermore, unknown to both of them at the time of the contract, the program disk had been destroyed by some coffee accidentally spilled on it by a friend of Clive's wife. Bill refused to go through with the deal. On these facts, which of the following is true if Clive sues Bill? A) With regard to which computer is the subject matter of the contract, the court will determine which computer was meant to be sold by the seller and declare that one to be the subject matter of the sale. B) With regard to the program disk, since all the elements of a contract exist - offer, acceptance, consideration, etc.- Bill must pay for it. C) Since the parties to the contract have a different understanding as to the subject matter of the sale, they can ask the court for rectification, that is, for the court to rewrite the contract. D) This is an example of caveat emptor and the purchaser has no remedy. E) With regard to which computer is the subject matter of the sale, the court will examine which interpretation is the more reasonable; if they are equally reasonable, that part of the contract, at least, will be void.

Interpretation is the more reasonable; if they are equally

An ad in the morning newspaper read "Absolutely the best offer anywhere in Calgary. We'll give you an IBM-compatible PC with a Roland PR-1011 printer for only $4 000!!! Pick it up today." This is an example of which of the following? A) Invitation to treat B) Unilateral contract C) Bilateral contract D) Offer E) Gratuitous promise

Invitation

Click Enterprises operated a software and internet business in Ontario to facilitate the illegal copying and downloading of movies in both Canada and the United States. Disney Enterprises brought action against Click in New York State. Which of the following statements is true? A) New York State has no jurisdiction since Click is a Canadian company. B) Even though Click's involvement in the United States consisted of selling his product directly to residents of the United States, the question of jurisdiction would be solely determined by Click's nationality. C) Click's involvement in the United States was not direct, since the firm operated out of Canada, and as a consequence, Disney's action in New York State would not be successful. D) An Ontario court will not enforce a New York judgment regardless of any circumstances. E) An Ontario court will enforce a New York judgment since Click's involvement indicated a real and substantial connection between the conduct complained of and New York State.

Involvement indicated a real and substantial

Mike is given a bottle of wine as a gift. Josh, a neighbour, sees it and recognizes it as a very rare bottle. Knowing that Mike doesn't drink, Josh offers him $300 for it, which he believes to be a fair price. Mike happily agrees. Later, when Josh is looking up the price of the bottle on eBay, he realizes that it is not a valuable bottle of wine at all. He had confused it with another vintage. Josh, who is taking a law class, wonders whether or not he could have the contract set aside. Which of the following statements is true? A) The contract will only be set aside if Josh's mistake was the result of willful blindness. B) It will automatically be set aside on the basis of the doctrine of mistake. C) A contract can never be set aside where a mistake has been made. D) It is unlikely to be set aside unless Josh could show that it would be unfair or unjust to enforce it. E) It will only be set aside if Josh's mistake rendered the contract illegal.

It is unlikely

Which of the following is false with respect to the application of tort law to the Internet? A) Companies that sell their products over the Internet will still be held liable under the laws of negligence if that product causes injury. B) Because the Internet provides direct and inexpensive access to a massive audience, torts such as deceit, negligent misstatement, and defamation are primary concerns. C) It is unlikely that courts will be willing to expand existing tort law to encompass new technologies. D) Statutes will need to be passed to expand or modify the common law where current tort law proves inadequate. E) The principles of misrepresentation and negligent misstatement will apply to the Internet just like any other form of communication, but the problems of jurisdiction and whom to sue will create significant obstacles.

It is unlikely that courts

You and your parents were both surprised when grandmother said the doctor told her to come for weekly checkups, because she didn't seem sick. Nevertheless, you dutifully took her to and from her appointments for a period of about six months. She never talked about these sessions, but loved to go. Now she has come to the family and said that she is sorry that she gave him the oil paintings and sold him the farm. On these facts, which of the following is false? A) In a court action, if she claimed the return of her property on the basis of undue influence, the court would presume undue influence and the doctor would have to prove that the property was freely given. B) It would be easier for her to argue duress than undue influence. C) A presumption of undue influence doesn't mean the weaker party will automatically get her property back. D) If grandmother had gone to her own lawyer for independent advice before conveying her property to the doctor, she would have more difficulty arguing undue influence. E) If a court held that the property was obtained by undue influence, the contract would be voidable at the option of grandmother, the weaker person.

It would be easier

In which of the following situations would the contract relating to land not be enforceable? A) An unwritten lease of a lawn mower used to maintain the land. B) An unwritten sale of land where the seller allowed the buyer to to enter of the property and commence construction thereon. C) An unwritten agreement to have a garage built on the land. D) An unwritten lease for a term of five years. E) An unwritten sale of land but where the sale was acknowledged in subsequent correspondence, signed by the party denying the existence of the sale.

Lease for term of five years

The British Columbia Business Institute (BCBI), because of its vast purchasing power, arranged a special plan through which its students could purchase new computers at a greatly discounted price. BCBI took orders from a number of students, along with a deposit as an indication of good faith, and then bought that number of computers from A. Pwee Ltd., the manufacturer. When the students came to BCBI with the balance of the purchase price, a specific machine was selected and sold to them by a serial number, and it was then theirs to take away. By Friday afternoon of delivery week, all but three students had picked up their machines. Jackson had stopped by and completed the purchase arrangements, and a particular machine was identified by number as his. But because he was going out of town for the weekend, he arranged to pick it up on Monday. The two others, Pollock and Kline, had not yet showed up. Unfortunately, some time on the weekend, despite due care by BCBI, thieves smashed into the storeroom and stole the final three computers. Identify the true statement about liability for this loss (presuming the thieves cannot be caught). A) No one will be liable for the loss because this was a crime and not the fault of any of them. B) The three students will be liable entirely for the losses. C) Jackson will be liable for the loss but Pollock and Kline will not. D) BCBI will be liable to Jackson but not to Pollock and Kline. E) BCBI will be liable for the entire loss because none of the three students had taken actual delivery.

Jackson will be liable

Read each of the following separately. In which one of the following cases would the corporation not be bound by the contract made? A) Jones, without the knowledge or authorization of Corporation A, approached one of their suppliers claiming to be an employee of Corporation A. He selected several valuable watches and took them with him, putting the bill on Corporation A's account. No one in Corporation A had ever heard of Jones before. B) Contrary to company policy, Gore, the purchasing agent for the corporation, contracted for supplies by using the green form instead of using the blue form. C) Kim, an agent for a small closely held corporation which sold Canadian art, had authority to purchase some photographs of Clayoquot Sound, but instead she bought several oil paintings of the sea. When they were sent to the store, they were sold immediately. D) A salesperson working for a corporation operating a car dealership sold a car and took a trade-in without first getting approval of the manager as required in his employment contract. E) Brian, a purchasing agent for the corporation for ten years, was fired for just cause. The next day, he visited suppliers as usual and contracted for the corporation as usual. They had not been told that he had been fired.

Jones

Damages as a remedy will not be available in which of the following situations? A) Jones makes and intentional misrepresentation of fact in order to get Smith to sign the agreement. B) Jones makes a fraudulent misrepresentation, persuading Smith to enter a contract with him. C) Jones, although being careful, makes an innocent misrepresentation persuading Smith to enter a contract with him. D) A false statement made by Jones becomes a term of the contract. E) Jones makes a negligent misstatement, persuading Smith to enter a contract with him.

Jones, although being careful

Which of the following statements is correct with respect to the legality of contracts? A) A judge can refuse to enforce a contract that involves conduct that is not prohibited by law but which the court considers morally unacceptable. B) When two merchants agree not to sell a certain product below an agreed price and the product is not readily available from others sources, this is legally permissible as long as they intend their promises to be legally binding. C) An agreement that one merchant won't open up a business in competition with another is enforceable as long as there is consideration on both sides. D) An agreement where one party agrees to pay another to sue a third for tort is legally enforceable. E) Insurance taken out on property you don't own is valid as long as the insurance company has been informed that you have no interest in the property.

Judge can refuse to enforce

Kent incorporated provincially. The corporation worked with small businesses in developing graphs and charts from their data for presentation to bankers, partners, shareholders, etc. If Kent, as promoter and agent of the company, had bought the necessary equipment from Ace Computers Ltd. prior to incorporation, which of the following would be true? A) Kent's liability on the contract would be limited to his investment in the corporation. B) Many jurisdictions have recently enacted statutory provisions preventing a corporation from ratifying pre-incorporation contracts. C) At common law, pre-incorporation contracts are binding on the corporation, but only from the moment the corporation comes into existence. D) Kent may have been able to protect himself by including a provision in the contract with Ace exempting him from personal liability. E) A corporation is legally bound to ratify all contracts made prior to incorporation, but only if those contracts were made with the intention that the corporation be bound.

Kent may have been able to

Tina's Gourmet Catering Ltd. (hereinafter referred to as "Tina's") makes several types of fresh salads, which they package in sealed containers and sell to various retail outlets. Grandma Wright, shopping with her daughter Jane, bought one of Tina's salads at the delicatessen at SuperdealGrocers Ltd. (Superdeal). Jane and her mom drove to Jane's and Jane served the salad to her family for lunch. The salad was contaminated through Tina's carelessness and caused Jane's family to be very sick; father missed work and the kids missed school for a week. Neither Jane nor her mother were sick because neither had sat down with the others for lunch. On these facts, which of the following actions would most likely be successful? A) Father v. Superdeal for breach of contract B) Kids v. Tina's for negligence C) Jane v. Tina's for negligence D) Father v. Superdeal for negligence E) Grandma v. Superdeal for negligence

Kids vs Tina's

Selling the contents of the house in preparation for a move to a condominium, Mr. Lotski sold an antique desk to a Mr. Rogers who paid by a cheque later returned N.S.F. (not sufficient funds). Lotski later learned that Rogers had sold the desk to Mrs. Lee for cash, which he took and then disappeared. Who is entitled to the desk if the court holds that the first contract between Lotski and Rogers is voidable? A) Lee but she must pay compensation to Lotski B) Rogers C) Lotski but he must pay compensation to Lee D) Lee E) Lotski

Lee

Ted, a seventeen-year-old high school student, was hired to perform in four episodes of Gossip Girls. To keep up with his schoolwork, he contracted with Mr. Tech, of Technoland, for a $2,000 laptop computer. He agreed to pay $500 down and the balance by monthly payments of $250. Read each of the following separately and indicate which is true. A) If Ted doesn't make his payments, Tech can sue Ted's parents, because parents are liable for the debts of their minor children. B) This contract is a legal contract enforceable against Ted. C) This contract is a legal contract enforceable by Ted. D) This contract is void; therefore, Tech can repossess the laptop which is technically still his whether Ted makes the payments or not. E) If this contract is in writing and Ted doesn't make his payments, Tech can sue Ted for breach of contract.

Legal contract enforceable by Ted

With regard to guarantees and indemnities, which of the following is false? A) A legally binding promise to be primarily responsible for someone else's obligation is an indemnity. B) Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed. C) A guarantee cannot be enforced in court unless it satisfies the writing requirements set out in statute. D) A guarantor can use any defence against the creditor that the debtor could use. E) A legally enforceable guarantee must satisfy all the elements required to create a binding contract except consideration.

Legally enforceable guarantee must satisfy

Read the following and indicate which agreement would not be a binding contract because of a problem with the requirement of consideration. Assume all the other requirements for a binding contract have been met. A) Peter agreed to pay Ace Computers Ltd. $50 above the contract price if the company would have his new computer ready ten days earlier than the date specified in the original contract. B) Mr. Kooner sold a farm valued at $190,000 to his nephew for only $50,000. C) Len agreed to sell and Karen agreed to buy four of Len's records for "some money." D) John, late for work, found his car battery was dead. He flagged down a passing truck and told the driver he would pay him $8 if he would agree to do him the favour of jump-starting the car. The driver of the truck agreed. E) Mary promised in writing and under seal to give Planned Parenthood a donation of $100.

Len

Carlos visited Vancouver last summer and instead of going back to Ontario he stayed and enrolled at Simon Fraser University. He needed money but didn't need things left in Ontario, including his car. In mid- December, he wrote a friend and offered to sell the car for $4,000 and told him to send him a letter with his answer. His friend received the letter on January 2, checked his financial situation, and sent a letter of acceptance January 3. Meanwhile Carlos, short of cash and not hearing from his friend, sold the car to Mr. Reno on December 31. Carlos received his friend's letter January 8. On these facts, which of the following is false? A) The acceptance was effective before it was received, so there was a contract between Carlos and his friend. B) In order for there to be a binding contract, there must be an offer and an acceptance. C) The letter of acceptance was effective when it was received, and by then Carlos had sold the car, so there was no contract. D) Sending an acceptance by mail was a reasonable method of acceptance in this situation. E) Not all methods of acceptance are effective upon receipt by the offeror.

Letter of acceptance was effective

John Li has worked as manager of a video store for six years. Since the 7-Eleven store next door began renting movies for 97 cents, his business has fallen off drastically. Accordingly, the owner of the business told Li that, because the business had fallen on such hard times, he would take over managing and Li would have to take over the counter duties. The present counter clerk would be laid off. The owner also told Li that his wages would be reduced by 15%. When Li came to work the next day, he told the owner that he wouldn't accept the job working at the counter. The owner became angry and said, "If you don't like it, then you can leave! I don't have to put up with your insubordination one minute!" Li left and then sued the owner for unlawful dismissal. The owner argued that he had "just cause": economic slowdown and disobedience. Based on the above facts, identify the true statement. A) The owner could fire Li without notice or pay in lieu of notice because Li refused his order to take over the counter. B) Li would win the unlawful dismissal action because the owner "dismissed" him by unilaterally changing Li's job without Li's consent and insisting that Li do it. C) If Li were wrongfully dismissed, he does not have to mitigate his losses by looking for a new job, until the case has been resolved. D) The owner cannot dismiss without cause even if he gives proper notice or pay in lieu thereof. E) The owner was justified in firing Li without notice or pay in lieu of notice because of economic slowdown.

Li would win

Which one of the following is false with respect to the Builders' Lien Act? A) A lien claimant has a limited period of time from filing his lien within which to begin his court action. B) If a lien claimant loses the right to file a lien, he still has the right to sue the party who failed to pay him for breach of contract. C) The lien claim is required to be filed at the appropriate registry in order to establish a claim against the property. D) The Builders' Lien Act gives some protection for those in the building trades, and these include contractors, subcontractors, workers, and material men. E) If a lien claimant files his lien within the time set, he can be assured that he will collect the full amount of his claim.

Lien claimant files his lien within

A real estate agent, by virtue of his fiduciary duty to his principal, is not allowed to buy the property being sold by his principal without full disclosure to and consent from his principal. The real estate agent does not want to disclose that he is the buyer of the property, so he forms a corporation and takes an offer to his principal from the corporation. Based on these facts, which of the following is true if the principal finds out the corporation/buyer is owned by the real estate agent and objects to the contract? A) The court would not enforce the contract and would "lift the corporate veil." B) The court would dissolve the corporation. C) The court would enforce the contract because this is not a direct breach of the agent's fiduciary duty. D) The court would enforce the contract, but the principal would be able to claim any profits from the agent when he took them out of the corporation. E) The court would enforce the contract because the corporation is a separate legal entity in the eyes of the law.

Lift the corporate veil

With regards to the Ontario Consumer Protection Act, which of the following statements is true? A) The Act specifically provides that the rights set out in it apply only if the seller resides in Ontario at the time of the transaction. B) The Act specifically provides that the rights set out in it apply only if the consumer resides in Ontario. C) The Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party is located in Ontario at the time of the transaction. D) The Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party are Canadian residents. E) The Act specifically provides that the rights set out in it apply to all consumer transactions where the consumer or the other party is located anywhere in Canada at the time of the transaction.

Located in Ontario at the time

Sam owed Joe $6,000 due January 12, 2012. On January 1st, Joe said he'd take $5,000 in full satisfaction of the debt if Sam paid him $5,000 on January 5th instead. Sam paid on January 5th. A week later, Joe wants to sue Sam for the $1,000 he (Joe) was legally owed. Which of the following is true? A) Joe would lose because early repayment constituted consideration to support the new arrangement. B) Joe would lose because of the rule that past consideration is no consideration. C) Joe would win because his forgiveness of the loan was gratuitous, i.e. unsupported by consideration. D) Joe would lose because of the doctrine of quantum meruit. E) Joe would win because they cannot change the original deal.

Lose; early repayment

Which of the following situations would allow a shareholder to sue on behalf of the corporation? A) If the directors issued shares without offering any of the new issue to the present shareholders. B) If four of the five directors, in the best interests of the corporation, voted against the fifth as director, voted to end the employment contract of the fifth, and voted not to buy his shares. C) If the shareholders refused to enter into a shareholder's agreement. D) If the directors took an action that unfairly prejudiced a shareholder. E) If the corporation had been wronged (lost $30,000) by the negligent and fraudulent acts of one of its directors, but the corporation refused to make any action against the wrongdoer.

Lost $30,000

The postbox rule applies when which of the following means of communication is used? A) Telephone B) Mail C) Messenger D) Fax E) Electronic mail

Mail

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 of the corporation fail to enforce a right, duty, or obligation owed to the corporation that could be enforced by the corporation. B) When the directors have hidden behind the corporate structure to do a wrong sufficiently serious that the courts would have "lifted the corporate veil." C) When major changes are made, in the best interests of the corporation, that will adversely affect one group of shareholders. D) If the directors of a non-reporting corporation fail to allot new shares proportionately to the members. E) When the directors conduct the affairs of the corporation in a manner oppressive to one or more of the members.

Major changes are made

Which of the following is an example of an agent's breach of fiduciary duty to his principal? A) An agent for the vendor collects a commission from the purchaser but told his principal and obtained his consent. B) The agent takes presents from the third party and passes them on to the principal. C) An agent discloses to his principal/vendor that he is giving some of his commission to the purchaser to induce the purchaser to sign the contract that the principal/vendor wants. D) An agent for the vendor makes a profit on the transaction he negotiated for his vendor above his commission and doesn't tell his principal/vendor. E) An agent negotiates a higher price than the highest sale price reasonably possible at that time.

Makes a profit

The following events occurred before the goods or parts of the goods were destroyed by fire. In which case would the buyer suffer the loss? A) Heinz contracted for all the corn in silo A. The seller still had to weigh the corn to determine the price. B) Manchesco chose which of the chairs he wanted and contracted for it, but he had agreed to pay and pick it up the next day. C) Jaspers contracted for four standard-sized cupboards for the kitchen. The boards had been cut, but they had not been assembled. D) Justin contracted for a piano that had to be tuned before it was in a deliverable state. It was tuned, but Justin had not been notified that it was ready. E) McGrady ordered a chainsaw advertised in the Sears catalogue.

Manchesco

If you owe Mr. Storr $900 for goods received and Mr. Storr agrees to take $800 in full satisfaction of the debt, which of the following is true? A) At common law, such a one-sided promise is always binding and Mr. Storr could sue for the remaining $100. B) Even if you take the $800 to him, Mr. Storr can later sue you for the $100 on the principle of quantum meruit. C) The issue of consideration is irrelevant when dealing with satisfaction of a debt. D) Many jurisdictions have passed legislation preventing Mr. Storr from suing you for the difference if he actually takes the $800. E) Under these circumstances, you only have to pay a reasonable price for the goods.

Many jurisdictions have passed

Which one of the following statements accurately describes the operation of a condition precedent? A) There is no such thing recognized in the common law. B) This occurs when some event that the parties have not anticipated makes performance radically different from what they agreed to. C) This occurs when one party shows up at the right time and place ready, willing, and able to carry out his obligations under the contract. D) This is a term in a contract that must be met before the contract becomes fully operational. E) This is a term in the contract that provides for the cessation (ending) of the parties' obligations upon the occurrence of some particular event.

Must be met before

Which of the following is true with respect to the application of contract law to the Internet? A) Clicking an "I Accept" button is used by some online vendors to make an internet user believe that the terms presented are binding, however "click-wrap" cases have confirmed that this action has no legal effect. B) Internet contracts are governed by the federal Uniform Electronic Commerce Act, in effect throughout Canada. C) Online communications are governed by the "postbox rule". D) Even if the basic requirements of acceptance are met, an offer accepted by e-mail has been deemed legally ineffective. E) Many jurisdictions have passed legislation making electronic communications the equivalent of written documents for legal purposes.

Many jurisdictions have passed

In which of the following would the title pass to the buyer only when the goods were "unconditionally appropriated" with assent? A) Jenny wanted amplifier A for her guitar, but the store only had amplifier B. She decided to take it because she wanted one right away. B) Mark chose a guitar advertised in the catalogue of Guitars Galore Ltd., called the store, and after some discussion on its features and price, ordered it. C) After some discussion with the owner of Guitars Galore Ltd. as to which of the guitars there were best for a beginner, Bob bought a guitar for his son "on approval" and took it with him. D) Homer chose a guitar that was ready and he agreed to buy it. They had agreed that he could pay for it next month and pick it up when he paid. E) Jethro chose the guitar and paid for it, but it had to be strung before it was ready.

Mark chose a guitar advertised

Which one of the following categories of persons do not have their capacity to enter into contracts limited? A) Insane or intoxicated persons B) Status Indians C) Bankrupts D) Married women E) Infants

Married women

Martin offered to buy the property for $200,000, "offer to remain open until 5:00 p.m. on Thursday, January 21, 2011." Which one of the following situations will not cause the offer to end? A) Death of offeror B) Martin sells the property to another party before the expiration of the period stipulated and before hearing from the offeree. C) Insanity of the offeror before the offer is accepted D) A counter-offer from the offeree E) The offeree has not accepted and the stipulated time has expired.

Martin sells the property

Mary bought a new Macintosh computer and advertised her old computer system for $1,500. Mr. Jones offered to pay $1,000. Mary said no, she wanted $1,500. Mr. Jones offered $1,250. Mary rejected that and said she wanted $1,500, but then said to him, "I withdraw my offer, I've decided to give it to school and apply for the tax benefit." Mr. Jones said, "All right, I'll accept your offer of $1,500." Which of the following is true? A) There is a contract, because once a seller makes an offer she cannot change her mind; she is bound to receive an acceptance. B) There is a contract and Mr. Jones has to pay a reasonable price for Mary's old computer. C) There is no contract because the last offer had lapsed. D) There is no contract because Mary revoked the offer before Mr. Jones attempted to accept it. E) There is a contract because at some point in time Mary was willing to sell and Mr. Jones was willing to buy the computer system for $1,500

Mary revoked the offer before

When an anticipatory breach has taken place (where a person, before performance is due, states that he will not perform the contract) A) the victim may sue immediately and not wait to see if the contract is performed or not. B) the victim must wait to see if the contract is performed, but damages are calculated from the time of the refusal. C) the victim may not be able to recover damages that occur after the anticipatory breach. D) the victim can get someone else to do the job but then cannot sue the original party to the contract if it costs more. E) such a statement made before performance is due has no effect on the contractual obligations of the parties.

May sue immediately

Which of the following would most likely result in the court finding the contract had been discharged by frustration? A) Cooper contracts to deliver ten bushels of ripe tomatoes to Haig's restaurant, and Cooper's tomato crop is destroyed by hail a few days before the delivery date. B) Binks agreed to purchase the business from Kealy, but Binks suffered such great losses in the recent stock market crash that he couldn't afford to go through with it. C) Moore, a sculptor, was delivering a $15,000 work when he lost control of the car and the work was crushed. He had been drinking heavily and had not bothered to wrap or box the work. D) McGee contracts to give a lecture at a convention on modern marketing, but the convention was cancelled because of an epidemic. E) McDonald agreed to buy Thornburn's horse, but unknown to both of them, at the time of the contract the horse was dead.

McGee

Mark wants to incorporate. Which one of the following statements is correct with regard to incorporating in Nova Scotia? A) You can't incorporate a closely held company in these jurisdictions. B) These are "letters patent" jurisdictions. C) Articles of incorporation is the document used to incorporate the company. D) The "objects" of the company must be set out in the charter document so that the shareholders understand the limits on the capacity of the corporation. E) The documents to be sent to the registrar of companies are called the "memorandum" and the "articles."

Memorandum and articles

Which of the following is false with regard to the implied terms of the Sale of Goods Act? A) The Act provides that the goods must be of "merchantable quality," and that means that the goods must be without flaw. B) If you ordered a lamp from a catalogue but it did not match the description when you got it, the seller is in breach of a condition of the contract. C) The Act provides that the goods must be fit for purpose, but to have that protection, the buyer must be dealing with a seller who deals in goods of that kind. D) When you buy a car, and the contract speaks only of the car and the price, you are entitled to receive good title, to acquire quiet possession and a car free from any encumbrances (i.e., a claim by a bank). E) If a buyer places an order for silk after seeing a sample of it, the order delivered must match the sample.

Merchantable quality

Your friend Harry became wealthy through the tremendous success of a gadget he designed that allowed micro-chips to be produced without being touched by humans. He has been invited to sit on the board of directors of different corporations. He is aware of the increasing number of cases finding directors personally liable. He does not want to be connected with a corporation involved with any wrong-doing. He has hired you to prepare in-depth reports on five corporations. Your reports reveal the following. In which of these is there no legal wrong? A) 12376252 Canada Ltd.: In this broadly held computer software corporation, a director, without the knowledge or consent of the board of directors, started a competing business that he ran from his home. B) 123456 Canada Ltd.: In a closely held corporation with four members, each owning 25% of the outstanding shares, the two members who served as directors voted to issue more shares, which they sold directly to themselves to give them voting control of the corporation, despite a provision providing for preemptive rights in a shareholders agreement. C) 167354 Canada Ltd.: A director who learned of a business opportunity while serving on the board of directors intercepted the opportunity for himself before the company could act on it. D) 1999872 Canada Ltd.: A minority shareholder joined with a group that protested the corporation's involvement in a logging operation and tried to prevent the planned logging. E) 3721956 Canada Ltd.: The majority of the directors voted on a measure that was not in the best interest of the corporation, but that would financially weaken the position of a shareholder whom they personally disliked.

Minority shareholder

With regard to the law concerning misrepresentation, which of the following is true? A) A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that the misrepresentation was true. B) A statement of opinion can be a one-sided mistake. C) For fraudulent misrepresentation, the buyer could ask only for the equitable remedy of rescission. D) The case law provides a remedy for a wildly exaggerated claim, such as "This is the best car ever built." E) A misrepresentation can be a false assertion of fact that induces (persuades) the party to contract, and need not be an assertion about a term of the contract.

Misrepresentation can be a false assertion

Mary has a little scam most everywhere she goes; she sells by saying anything. Her buyers just have woes. Which of the following is true with regard to misrepresentation? A) A misrepresentation can be made about a term of a contract and result in an award of rescission and/or damages. B) For fraudulent misrepresentation, the buyer can be granted the equitable remedy of only rescission. C) If Mary induces the buyer to buy by making a misrepresentation that she honestly thought was true, the buyer has no remedy in law or in equity. D) There are several remedies available in case law for an exaggerated claim made by Mary. E) In some types of misrepresentation there are no remedies available.

Misrepresentation can be made

Lars Jepsen, a fisherman from Tofino, regularly sells his catch to packing plants in Steveston. His shipment had already left dock last Monday, but he didn't contract for its sale until yesterday. He sold this shipment for $10,000 to B.C. Packers. Jepsen still owes Sam $3,000, part of his commission for having sold one of his waterfront properties. This morning he assigned to Sam, in writing, $3,000 of the $10,000 owed under the contract with B.C. Packers. Unknown to Jepsen or B.C. Packers, at the time they made the contract, his transporter had gone down in a storm and all the cargo was lost. Jepsen had no insurance for loss of his boat. Which of the following is correct with respect to his legal position? A) This is an example of a breach of contract by Jepson with B.C. Packers. B) This is an example of a mistake causing the contract between Jepson and B.C. Packers to be void. C) Because of the frustration, Sam has no claim against either Jepson or B.C. Packers. D) Despite the frustration, Sam can collect the $3,000 from B.C. Packers. E) This is an example of a frustrated contract.

Mistake causing

When you went home for Thanksgiving dinner, your great aunt, now 80 years old, seemed very unhappy. You learned that she had just signed a contract buying an expensive condominium in a retirement community. She had attended a real estate "seminar" with her friend. In trying to think of a way for her to get out from under this contract, you review mistake, duress, undue influence, and unconscionability. Which of the following is false? A) To avoid the contract on the basis of duress, she would have to show that she was forced into signing the contract against her will by serious threats. B) To avoid the contract on the basis of non est factum, she would have to prove, among other things, that she did not understand the nature of the document signed. C) To avoid the contract on the basis of unconscionability, she would have to have evidence that the sellers of the property knowingly took advantage of their superior bargaining position and that the consideration was grossly unfair. D) To avoid the contract on the basis of mistake, there is a presumption of mistake and she will automatically get out of the contract. E) To avoid the contract on the basis of undue influence, she would have to show that she was improperly pressured by a trusted person in a dominant position.

Mistake; automatically get out

Jones offers to sell Smith his car. Smith thinks Jones is selling his 2011 Toyota, and Jones thinks he is selling his 2009 Pontiac. This is an example of which of the following? A) Fraudulent misrepresentation B) Common mistake or shared mistake C) Misunderstanding D) Non est factum E) Unilateral mistake or one-sided mistake

Misunderstanding

Employment with respect to the internet is an important area of concern. Which of the following statements is false. A) Monitoring employee email and the their internet use in all cases, is a violation under the Charter of Rights and Freedoms. B) Monitoring an employee's telephone conversation, without obtaining prior consent or authorization, may be recognized by the Courts as an invasion of privacy. C) The employer will be responsible for data transmissions that result in intentional violations of intellectual property rights. D) Employers must consider the impact of PIPEDA before monitoring employee email. E) Businesses may find themselves linked to criminal activities through the actions of their employees.

Monitoring employee email

Which of the following statements describes picketing? A) Permissible only when contract negotiations are taking place, and there is no lawful strike mandate. B) Permissible where workers cease working because of a dispute over the interpretation of a term of the collective agreement C) Courts or labour relations boards cannot restrict picketing even when regulations are violated. D) Must be peaceful and merely communicate information E) Strikers gathered at a place of business can prevent people from doing business with employer.

Must be peaceful

Randy, as two older brothers before him, moved out of the house when he was quite young. When he was 17, he and his older brother, Ted, wanted to buy a condominium in Nelson. They both had jobs and the bank was willing to lend them money and take a mortgage on the condo. Which of the following is a correct statement about the law governing this situation? A) All contracts with infants are void. B) The mortgage agreement would be binding on Randy as an adult if he continued to make payments after reaching the age of majority. C) A mortgage granted by Randy to the bank is effective until a court orders otherwise. D) All infants' contracts are enforceable as soon as they become adults. E) These contracts would be binding on Randy only if he disclosed the fact that he was a minor to the other parties.

Mortgage agreement would be

When two parties are involved in a misunderstanding as to the meaning of a term of the contract, which of the following is usually applied by the court to settle the matter? A) The court will find that there is no contract because there is no meeting of the minds. B) The equitable remedy of rectification C) The most reasonable interpretation of the terms. D) Non est factum E) Caveat emptor

Most reasonable interpretation

Mr. Ace of Oink Inc., a closely-held corporation, is one of three shareholders. After several years of considerable success, the corporation hit hard times. The other shareholders, Mr. Bane and Mr. Curr, in the best interests of the corporation, voted Mr. Ace out as a director and voted not to renew his employment contract. Upset by these events, Mr. Ace just wanted to sell his interest and leave the corporation. The other two shareholders, however, refused to buy his shares. Furthermore, when he attempted to sell his shares to his brother, who was interested in the corporation, they refused to register the brother as a member. Which of the following is true? A) The court would "lift the corporate veil" because Mr. Bane and Mr. Curr were hiding behind the corporation to commit a fraud. B) Mr. Ace could sue the corporation for breach of its fiduciary duty. C) Mr. Ace could have avoided such a dilemma through provisions of a shareholders' agreement. D) Mr. Ace could sell his shares to whomever he chose and the remaining shareholders must register the new owner. E) Because of statutory preemptive right provisions, if Ace wants out, the other shareholders must buy him out.

Mr. Ace could have avoided

Which of the following will have the likely consequence of the court's finding the contract void on the grounds of mistake? A) The parties signed a document that stated the consideration as "$1,100" instead of the $900 that the buyer and seller had contracted for, but the buyer cannot prove the terms of the original contract. B) Ms. Hunt bought some property erroneously thinking that the province was planning to put a highway nearby, even though the seller had never made any such suggestion. She wants out of the contract. C) Annette bought a suit thinking she would be invited back for a second interview. She wasn't and now wants to return the suit on the basis of mistake. D) Mary contracted to buy "the Acura car" from a collector of cars. He was selling his 2011 model but she thought she was buying the 2012 model. The court, looking at all the evidence, found that his interpretation was the more reasonable. E) Mr. Armstrong accepted the offer by Sidhu, who was selling a "computer program," but learned that they had different understanding of what program was meant. The court cannot say that one interpretation is better than the other.

Mr. Armstrong

Which one of the following is enforceable? A) Ms. Goode promised to send $10 to Mr. Paul, who kindly came and warned her when he saw a tow truck approach her car. B) An ad in the paper promises to pay $5 for the return of a lost ring, but the person who finds and returns the ring never saw the offer in the newspaper. C) Mr. Ho promised to give his needy friend Mr. Jahn $100. D) Ms. Jones promised to pay an additional $100 to Mr. Wood if Wood finished the existing contract on time, according to the terms of the contract. E) Mr. Baker was so sick of an old chair that, when Mr. Venson offered him $10 for it, he agreed (i.e., promised to sell it to him), although the market value of the chair was $80

Mr. Baker

Which of the following will have the likely consequence of the court finding the contract void on the grounds of mistake? A) Mr. Twigg carelessly signed a mortgage for $24,000, which he was told was a mortgage for only $14,000. This was assigned to Mr. Jones. B) Mr. Ille, although using due care, signed a cheque for $100 in favour of his secretary, who had told him it was a receipt for money received. C) Mr. Ideer bought some property, erroneously thinking that the province was planning to put a highway nearby, even though the seller had never made any such suggestion. D) Mr. Jones, without reliance on a salesperson, purchased a palm organizer from a store, thinking it ran the regular Windows operating system. E) The parties signed a document that stated the consideration as $1,200 instead of the $1,100 that the buyer and seller had contracted for, but the buyer cannot prove the terms of the original contract.

Mr. Ille

Mr. Zink hired Bruce Dorne to create a payroll program for his business. Bruce was to be paid $4,000 for the program. When Bruce was half- way finished, a creditor to whom he owed $2,000pressed so hard for payment that Bruce assigned him $2,000 of the contract price, an amount he felt he had earned already. The creditor, Mr. Pressing, gave written notice that very day to Mr. Zink. On these facts, which of the following is true? (Read each statement separately.) A) If Bruce bungled the assignment and the court determined that nothing was owed to him, Pressing could still get $2,000 from Zink. B) Mr. Zink must pay $2,000 to Mr. Pressing on the day that notice was given, because at that time Bruce had done half of the work on the $4,000 contract. C) This type of assignment is not recognized by the courts because it is an assignment of contractual obligations. D) Mr. Pressing is entitled to $2,000 from Mr. Zink when the contract is completed, if at least that much is owed to Bruce by Zink at that time. E) This assignment is a statutory assignment, not an equitable assignment.

Mr. Pressing is entitled to

Identify which of the following statements best describes the legal position of a conditional seller. A) He is given first priority over all of the other creditors with respect to all of the conditional buyer's assets. B) The conditional seller has no legal rights because such contracts are void. C) The conditional seller is in a better legal position than if instead he had been the chattel mortgagee of the same assets. D) The conditional seller loses all legal rights against the conditional buyer if he fails to register. E) The conditional seller must comply with the provisions of the Personal Property Security Act to protect his interest.

Must comply

Alison told her partners in writing that she would be leaving the law partnership at the current partnership year-end, January 31, 2014. At year-end, Alison's partners bought her partnership interest and agreed that she would no longer be liable for any of the prior or subsequent partnership obligations. In February 2014, one of the remaining partners absconded with $2,000,000 held for Mr. Smith, a long-time client, taken in trust in September 2013. Mr. Smith sued the partnership, the partners, and Alison. Based on the foregoing facts, which of the following statements is true? A) Mr. Smith can recover on his judgment out of the partnership assets. B) Even if Alison gave Mr. Smith actual notice of her leaving the partnership, and he agreed that she would no longer be obligated for the partnership's obligations, she will can be held liable to Mr. Smith. C) She has no right to recover any funds she has to pay from her former partners. D) Only the remaining partners, not Alison, have the right to recover anything they have to pay from the absconding partner. E) After the partnership assets are exhausted, Mr. Smith can recover on his judgment from any one of the remaining partners but not Alison.

Mr. Smith can recover

Alf bought a car from Mr. Wojchu for $10,000. Shortly afterwards, a bailiff, acting for an unpaid conditional seller, seized the car. The conditional seller had properly registered his claim in time. Alf wants to sue Mr. Wojchu. Which of the following correctly sets out his legal position? A) Wojchu loses. Risk follows title. B) Alf loses. Caveat emptor applies. C) Alf wins. Goods are not of merchantable quality. D) Alf loses. It was his obligation to search the title and he failed to. E) Alf wins. Mr. Wojchu has failed to deliver good title.

Mr. Wojchu has failed

Mr. Olde died. Mrs. Olde was treated by a psychiatrist who advised her that part of her difficulty was her trying to make financial decisions that had previously been made by her husband. Upon his advice, she contracted with him to examine her financial situation and to give her a letter advising her, in detail, what steps she should take with regard to twenty or so pressing business decisions. His fee would be $2,000. As agreed, he attended her home one evening and examined all the financial records. She issued a cheque payable to him for $2,000; the cheque was drawn on the Bank of Montreal, Austin Street branch. As promised, his letter of advice was delivered on the following day--a one-paragraph letter in which all he advised was that she transfer the two income-producing properties into his name so that he could "take care of things for you." Mrs. Olde attended her bank immediately to stop payment on the cheque. Before she did, however, the psychiatrist had endorsed it over to his bank, the Royal Bank at Cambie and 16th Avenue. On these facts, which one of the following is true? A) Mrs. Olde is the "drawee" of the cheque. B) Mrs. Olde will have to pay the holder of the cheque because it is a holder in due course. C) If Mrs. Olde can prove undue influence was used by the psychiatrist, she will not have to pay the holder of the cheque. D) Because the parties deal with different banks, Mrs. Olde would not have to pay the holder of the cheque because she can successfully argue breach of contract. E) The psychiatrist is the "acceptor" of the cheque.

Mrs. Olde will have to pay

Lee, a former head of a venture capital firm, sat on the board of directors of Angel Enterprises Ltd., a broadly held corporation. During a board meeting, she recommended that the corporation invest in a new technology startup. Lee failed to mention that she owned shares in this new tech company. When the prospect of investing was put to the board, Lee voted in favour it. Read each of the following statements separately, and choose the true statement. A) Lee has breached her fiduciary duty, but she does not need to give up any profits, as long as the investment turns out to have been sound. B) Lee must account for any profit made because she failed to disclose her interest and voted on the matter. C) Lee must disclose her interest in a contract before the board, but she is entitled to vote for it. D) Lee does not owe a fiduciary obligation to the company, only to individual shareholders. E) Lee does not have to disclose her interest in the contract, as long as her director's agreement relieves her of her fiduciary duties.

Must account for any profit

Mr. Malik, an investment counsellor by training, sat on the board of directors of Talbot Enterprises Ltd., a broadly held corporation. During a meeting of the board, he advised the corporation to buy some condominiums given the present soft real estate market. Malik did not disclose that he owned shares in the corporation that owned the property, nor did he disclose that he would be entitled to a commission for every unit he helped sell. When the question was put to the board, he voted for it. Read each of the following statements separately, and indicate which is true. A) A shareholder, learning of his actions, could proceed under the dissent procedure, which would cause the corporation to buy his shares at fair market value. B) Malik must account for any profit made because he failed to disclose his interest and voted on the question. C) A director must disclose his interest in a contract before the board, but is not required to refrain from voting for it. D) Malik doesn't have to disclose his interest in the contract if he has signed an agreement with the other directors relieving them of their fiduciary duties. E) Malik has breached his fiduciary duty, but if the sale was fair, he need not give up his profits.

Must account for any profit

Which of the following statements is true with regard to an agent's duties? A) An agent is not entitled to the agreed-upon commission and reasonable expenses undertaken on behalf of his principal in carrying out his duties. B) An agent need not disclose all relevant information to the principal. C) A real-estate agent may buy property from a third party if it is at a good price and then sell the property to his principal at a higher price. D) An agent cannot act for two principals even with the knowledge and consent of those principals. E) An agent must always scrupulously account for moneys coming into his hands on behalf of his principal.

Must always

Which of the following statements is correct with respect to the operation of the collective agreement? A) Mediation is a process whereby the mediator/conciliator will hear both sides of the dispute and make a decision binding on the parties. B) It is unlawful to include in a collective agreement a provision whereby a new employee must become a member of the union. C) All disputes arising out of the enforcement of the collective agreement that cannot be settled by negotiation must be handled by arbitration or another agreed upon method. D) All disputes arising out of the enforcement of the collective agreement that cannot be settled by negotiation must be handled by conciliation/mediation. E) Arbitration is a process whereby the mediator/conciliator will hear both sides of the dispute and try to persuade the parties to come to an agreement.

Must be handled by arbitration or another agreed

Joe and Sam were in business school together in college, and after they graduated decided to open an ice-cream store in a mall together. They had skipped the classes where they were taught about different methods and forms of carrying on business and so gave no thought as to how they would structure their relationship. Which of the following is true with respect to the legal positions of Joe and Sam? A) If Sam were to find a great deal on anchovy ice-cream and purchase 2,000 litres of it, only Sam would be liable for the debt incurred as a result of the purchase. B) If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, Joe would be liable for any losses he suffered along with Sam. C) If Sam opens up another ice-cream store in another mall in a nearby city without telling Joe, he must share any profits he makes with Joe. D) Sam and Joe are not in a partnership since they have not specifically agreed to be. E) If a customer were injured because of poorly kept food and Sam did not have the assets to pay his half, Joe would only have to pay for his half of the damages suffered.

Must share any profits he makes

Which of the following would most likely result in the court's finding that the contract had been discharged by frustration? A) Lowe contracted to purchase a business from Lerner, but the interest rates jumped so quickly that, even before closing, he realized he would lose money, so he told Lerner he couldn't go ahead with it. B) Mellowcream Ltd. contracted to deliver 40 dozen donuts to Pat's Place, but called Pat and told her it couldn't deliver because another customer needed another 40 dozen for an unexpected event. C) N. Yung contracts to give a performance at B.C. Place stadium, but the performance was cancelled because he was poisoned by contaminated food at a local restaurant. D) Lee Ltd. agrees to haul lumber for Len Lumberjack, but a few days before the delivery date the company's best truck, the one they wanted to use, broke down. E) Thornburn agreed to buy Patterson's tulip crop, but unknown to both of them, at the time of the contract the crop had been destroyed by the frost.

N. Yung

Which of the following is not correct with respect to the adequacy of consideration? A) Must be of some value; love and affection are not enough B) Need not be fair, unless there are extenuating circumstances, i.e., insanity or fraud C) Existing duty: a change in the contract requires new consideration D) Need not be legal if both parties clearly consent E) Need not be present if the agreement is under seal

Need not be legal

After Bill Roles graduated from university, he incorporated Roles Enterprises Ltd. He put $10,000 into the corporation by way of a shareholder's loan and the corporation granted him a chattel mortgage of one of its two delivery trucks as security. You knew Bill at school; therefore, whenRoles Enterprises Ltd. needed computer supplies, Bill, on behalf of the corporation, contracted with you, the owner of a business selling computer supplies. As it turned out, Bill placed such orders with you almost every three weeks. Read each of the following separately and indicate which of the following is true. A) If an employee of Roles Enterprises Ltd. came to your store to pick up supplies and caused $900 damage by his negligent driving, you could sue the employee, Roles Enterprises Ltd., and Bill personally because the employee worked for Bill's corporation. B) If the corporation owed you money and Bill, the only shareholder in the corporation, was killed, you would look to Bill's estate for payment. C) If Roles Enterprises Ltd. owed you $1 500 for supplies when it was placed into bankruptcy by its creditors, Bill would be more likely to lose money he lent to the corporation than you would be. D) If Bill neglects to file annual returns for the corporation, Roles Enterprises Ltd. could cease to exist. E) If Bill had inadvertently contracted with you before the corporation was in existence, the corporation would lose the ability to ratify that contract, and the contract would be considered void.

Neglects to file

Which of the following situations would allow a shareholder of a closely-held corporation, with permission of the court, to sue on behalf of the corporation? A) If the corporation had been wronged by the negligent and fraudulent acts of one of its directors, but the corporation refused to take any action against the wrongdoer. B) If the shareholders refused to enter into a shareholder's agreement. C) If the directors solicited proxies from all of the shareholders. D) If four of the five directors, in the best interests of the corporation, voted against the fifth director, voted to end the employment contract of the fifth director, and voted not to buy his shares. E) If the directors refused to declare a dividend.

Negligent and fraudulent

Which of the following is false with respect to the law of negotiable instruments? A) A holder in due course is in a better position than he would be as the receiver of contractual rights through assignment. B) The Bills of Exchange Act is federal legislation. C) The Bills of Exchange Act governs the area of negotiable instruments. D) Negotiable instruments are controlled by provincial legislation. E) A bill of exchange involves 3 parties.

Negotiable instruments are

Which of the following is correct with respect to an agent's performance of his duties? A) When an agent fails to act in the best interest of the principal and is an independent contractor, this is just cause for constructive dismissal. B) The agent may profit at the expense of the principal, if the agent comes into some previously unknown information. C) The agent must never compete with the principal. D) The agent must never take advantage of the third party. E) The principal need not reimburse the agent for any reasonable expenses incurred in the process of performing the agency responsibilities.

Never compete

An agreement for the purchase and sale of property included the following words: "Subject to the purchaser obtaining satisfactory financing by 5 p.m. on Friday, February 22, 2011." If the court held that this subject-to clause was so vague that "the entire contract was void for uncertainty," this would mean that A) the court will impose a reasonable alternative for the term in question. B) the contract was never in existence. C) the contract was in existence but could not be enforced. D) the contract was in existence but one party has the right to repudiate the contract. E) the contract is in existence but the court will not do anything to help the parties.

Never in existence

To which one of the following contracts would the Sale of Goods Act apply? A) A contract with a dentist to have a tooth filled B) A contract for the assignment of a company's accounts receivable C) A contract by which two computer programs were swapped for two others D) A contract for the purchase of a farm E) A contract for a table where title to the table will not pass to the buyer until some future date

Table where title

Anmool verbally agreed to build a deck for Nikki for $1,000 by the 15th of September, in time for a lavish backyard barbecue she was planning. On September 13th, Nikki became concerned at Anmool's lack of progress. Anmool told Nikki he would complete the deck on time, for an additional $200. Nikki agreed and Anmool completed the deck on time. Which of the following is correct? A) Nikki owes Anmool $1,000; there is no binding obligation with respect to the additional $200 because Anmool had an existing duty to complete the deck on time. B) Nikki does not owe Anmool anything, because his lack of professionalism vitiated the contract. C) No legal obligations arise because the agreement is not in writing. D) Problems of consideration can be raised only in the commercial context, not when the parties involved are both individuals. E) Nikki owes Anmool $1,200, because that is what she agreed to, and such contracts are binding.

Nikki owes Anmool $1,000; no binding obligation

Ann was offered a job that would pay $20,000, that would provide for 18 days vacation after one year of employment, and that would begin one week after her graduation. She wrote back that she would accept the job, but that she would not begin until three weeks after graduation and needed at least a 21- day vacation after the first year of work. On these facts, which of the following is true? A) If she had not responded, there would have been a contract because silence is the standard form of acceptance. B) There is no contract because an acceptance must be unconditional, and her counteroffer has not been accepted. C) She is still free to reconsider and take the original offer even after the prospective employer received her letter. D) Since she accepted the offer, there is a contract. E) There is a contract as soon as she drops her letter in the mailbox.

No contract

Sylvia had contracted with Produce Palace to sell her entire crop of elephant garlic (100 kilograms) and her entire crop of tomatoes (100 kilograms). On the day for delivery, Produce Palace took the garlic but not the tomatoes. In her effort to mitigate her loss, Sylvia called the owner of Val'sVeggies and offered her the tomatoes at a reduced price with the words, "Let me know quickly; they are ripe and must be moved out today." That afternoon, Val sent Sylvia a letter accepting the offer. On these facts, which is the most likely outcome? A) If the postbox rule does not apply, there would be a contract as soon as Val mailed the letter unless Sylvia had sold the tomatoes to someone else. B) There is no contract between Sylvia and Val because the offer has probably lapsed before the acceptance was received by Sylvia. C) There is no contract between Sylvia and Val because Sylvia had revoked the offer. D) There is a contract between Sylvia and Val the moment Val dropped the letter of acceptance in the postbox. E) There is a contract between Sylvia and Val the day the letter of acceptance was received by Sylvia.

No contract; offer has probably lapsed before

If the place of employment is not unionized and there are no provisions in the employment contract concerning termination of employment, which of the following would not be within the rights of the employer and therefore actionable by the employee? A) An employee is dismissed because his employer doesn't like his disposition, and he is given reasonable pay in lieu of notice. B) An employee is dismissed because there is no more work to do and is given neither notice nor pay in lieu of notice. C) An employee is dismissed because he refused to do a job to which he had just been demoted, and he was given reasonable pay in lieu of notice. D) An employee is dismissed for incompetence and is given neither notice nor pay in lieu of notice. E) An employee is dismissed because he was found stealing goods from his employer, and he was given neither notice nor pay in lieu of notice.

No more work to do

Which one of the following is not just cause for dismissal? A) Serious absenteeism B) No work to do C) Open disobedience D) Habitual negligence or incompetence E) Consistent tardiness

No work to do

Mr. Frank, a foreman supervising some 43 employees, was asked by his secretary to sign a form requesting additional supplies needed on the factory floor. He was not careless when he examined the form, but his secretary had cleverly arranged the signature line so that instead of signing a request for supplies he signed a cheque payable to his secretary. What plea, if any, would be used to defend against her action on the cheque? A) Rectification B) Mistake C) Rescission D) Non est factum E) Illegality of object

Non est factum

Mrs. Sharp, the owner of a restaurant, induced the Morissons to buy the business by a misrepresentation; the invoices made her costs appear less than they actually were, and thus her profits more than they actually were. On these facts, which of the following is false? A) The court could terminate the contract for breach of contract if the accurate statement of costs and profit were essential terms of the contract. B) The cause of action could be for the tort of deceit, if there was evidence that Mrs. Sharp intended to deceive them. C) The court could award the equitable remedy of rescission if the evidence showed she had fraudulently misrepresented the costs. D) The court could not award the equitable remedy of rectification because the argument is not about rectifying an erroneous written version of a previous oral contract. E) The court could not award the equitable remedy of rescission if evidence showed that Mrs. Sharp really believed the invoices were accurate.

Not award equitable remedy of rescission

A provision that restricts the seller from competing with the buyer in a contract for the sale of a business is A) enforceable if it is reasonable between the parties, which means that it must be limited in time (e.g., one year) but need not be limited in area. B) always unenforceable because any attempt to restrict competition is an illegal restraint of trade. C) enforceable if it is reasonable between the parties and not contrary to public policy. D) always enforceable because the parties to a contract have the freedom to contract as they see fit. E) fatal to the whole contract, i.e., it causes the whole contract to fail.

Not contrary to public policy

Mr. Koff, a former policeman, was hired to do investigations for the stock exchange. All those hired in this capacity were required to take and pass a course. When it was determined that Koff had cheated on the course's examination, he was fired. Koff, who was not covered by a collective agreement, sued for wrongful dismissal. If the court holds that the employer had cause for dismissal, Koff will be entitled to damages equivalent to which of the following? A) Reasonably unmitigable losses B) Nothing C) The amount of pay that would have been received in one pay period, e.g., one month if paid monthly D) The amount that would have been paid during a reasonable notice period less any amount received from other employment, E.I., etc. E) Two weeks' pay, the statutory minimum

Nothing

Which of the following is an offer as opposed to an "invitation to treat"? A) The display of goods on the shelves of Safeway. B) An ad in a real-estate paper: "Best offer in Vancouver! 3 bedroom home in Kitsilano for only $350,000!" C) A sweater displayed in the window of a shop with the price tag attached and showing. D) A notice in the catalogue from the gift shop of the Edmonton Aquarium: "15% off the price of all jewellery until January." E) A notice in the Toronto Star: "I will pay $100 to whoever finds and returns my lost female calico cat which answers to the name Marx."

Notice in Toronto Star

Which of the following statements is true? A) Online dispute resolution services are very costly and time consuming. B) Online dispute resolution services are now available for electronic transactions. C) The legal status of online contracts is determined by common law. D) Online disputes are often self-regulated. E) Arbitration has not been proved to be a valuable tool for e-commerce disputes.

Now available for electronic transactions

O'Neil bought a new car from a Chevrolet dealer for family use. The contract he signed contained the following clause: "The parties hereto expressly agree that the dealer is not liable for any breach of condition or warranty, express or implied." He also bought a used car radio from the dealer for his old car, which he was keeping. The contract for the radio was not in writing. The car did not run properly; O'Neil had it back in the shop seven times in three weeks. It was finally determined that the problem was due to a faulty transmission. Unfortunately, the car radio didn't work either. On these facts, which of the following is true? A) The contract for the radio is not covered by the Sale of Goods Act because the contract was not in writing. B) O'Neil has an action for breach of contract against the dealer, because the exemption clause does not defeat the dealer's obligation to deliver a properly performing car (fit for use) in a consumer transaction. C) The contract for the radio is not covered by the Sale of Goods Act because the radio was not new. D) The exemption clause in the contract for the car would succeed in defeating an action by O'Neil against the dealer for breach of contract. E) The exemption clause does not apply to either because both involve fundamental breaches of contract.

O'Neil has an action for breach of contract

With respect to the online contracts, which of the following statements is true? A) The Uniform Electronic Commerce Act (UECA) clearly states that an offer may be made and accepted electronically. B) Online contracts do not require all the essential elements of a contract such as consensus, capacity, and legality. C) The legal status of online contracts is determined by common law. D) The Uniform Electronic Commerce Act (UECA) clearly states that an invitation to treat in all cases qualifies as an offer. E) The Uniform Electronic Commerce Act (UECA) clearly states that a contract is formed when the communication of an acceptance through instantaneous communication is sent.

Offer may be made and accepted

Which one of the following is an example of breach of fiduciary duty? A) A director profited $120,000 from a contract between the corporation and a firm in which he had an interest after he made full disclosure of his interest to the board of directors and abstained from the vote on the contract. B) The directors of the corporation refuse to give a pay raise to the employees although they had not received a pay raise for five years. C) An officer of the corporation learned of a business opportunity intended for the corporation and intercepted it for his own benefit. D) A shareholder owning 2% of the outstanding shares started a business in direct competition with the corporation in which he held shares. E) The directors refused to declare a dividend, contrary to the request by its preferred shareholders.

Officer

Which of the following statements is correct with respect to the bargaining process in collective bargaining? A) Once a union has been certified as the legal bargaining agent of the employees, they are the ones in control of when bargaining takes place. They are the only ones who can give notice to commence bargaining. B) Employers are required to bargain in good faith, which means that they must be prepared to compromise when their initial offer is refused. C) Once a union has been certified, the employer must agree to whatever they represent as the contents of the first contract. D) Once notice has been given by either side, bargaining must commence within the time specified in statute, unless they agree otherwise. E) Once the employer and the union representatives have completed a collective agreement and signed it, it is binding on all parties. No further steps have to be taken.

Once notice has been given

George contracted with Bob to have a racing bike modified for him to be delivered on February 20, 2011, for a race on February 22. The price for the modification was agreed on - $100. About February 10, George became nervous about the bike being finished on time and went to see Bob.Bob said that he was very busy, but if he really wanted to be sure that it would be finished on time, George would have to pay him an extra $25 so he could pay his employees overtime. George agreed and Bob completed the modifications as requested, on time. How much does George legally owe? A) $125 because Bob gave consideration for George's promise to pay the additional $25. B) A reasonable amount only. C) Only $100 because Bob had an existing duty to modify the bike and the price was settled. D) $25 because past consideration is no consideration. E) $100 plus whatever it cost for the overtime.

Only 100

Mr. Buyer, the plaintiff in the action, was attempting to enforce a contract in which the defendant, Mr. Seller agreed to sell to buyer his property, Blackacre, for $100,000. Which of the following, by itself, would be sufficient to allow Mr. Seller to get out of the contract? A) The $100,000 was not enough, not fair. B) At the time of the contract, unknown to Mr. Buyer, Mr. Seller did not understand the quality and nature of this act because of mental incapacity. C) The parties clearly stated that they did not want the agreement to be legally binding. D) Although there was a letter from Mr. Seller referring to its essential terms , the contract itself was not in writing. E) Although both parties agreed to this, there had not actually been any money paid on the contract, not even a deposit or a down payment.

Parties clearly stated

John, a salesman for the computer division of B & C Machines Ltd., is meeting with a potential customer at 11:00 tomorrow morning. Because the customer does not have the funds to pay the full price of the system required, he wants to discuss chattel mortgages and conditional sales contracts.Which of the following is false with regard to these contracts? A) Both contracts are governed by the Personal Property Security Act. B) Only a conditional seller needs to register his interest for protection against third-party claims; a chattel mortgagee need not do so. C) Both contracts provide that the debtor has quiet possession of the goods given as security as long as he is not in default. D) If the seller of goods is willing to allow the buyer to pay by installments, he could use either a conditional sale contract or a chattel mortgage to obtain security for payment of the debt. E) In both cases, the debtor is entitled to have the lien removed upon final payment.

Only a conditional seller

When a judgment is obtained against a foreign service provider, which of the following statements is true? A) If the service provider has no assets in the foreign jurisdiction or if there is no treaty in place to allow for enforcement, enforcement continues to be a substantial threat. B) Since the judgment is obtained in a different jurisdiction, the business or individual may be extradited to face criminal charges. C) If the service provider has assets in the foreign jurisdiction or there are treaties in place to allow for enforcement, enforcement continues to be a substantial threat, no matter if the conduct complained of is actionable in only one jurisdiction. D) If the service provider has assets in the foreign jurisdiction or there are treaties in place to allow for enforcement, enforcement continues to be a substantial threat, but generally, only if the conduct complained of is actionable in both jurisdictions. E) Since the service provider resides in a foreign jurisdiction there is no threat of enforcement.

Only if the conduct complained

Which of the following is true in respect of privacy law in Canada? A) Privacy protection is found primarily in the common law. B) The power to enact privacy legislation has been exclusively granted to the federal government. C) The Personal Information Protection and Electronic Documents Act is designed only to regulate the government in its collection, use and disclosure of personal information. D) Organizations in the private sector are subject to the Personal Information Protection and Electronic Documents Act with respect to the personal information they collect. E) Privacy laws are generally considered unnecessary because voluntary privacy protection has been so successful.

Organizations in the private sector

Which of the following statements is true with respect to the obligations in a partnership relationship? A) When a partnership is dissolved, each partner can only be forced by a creditor to pay a portion of the debt equal to his share of the capital contributed. B) When one of the partners owes a personal debt not associated with the partnership, that creditor has a claim on his portion of the assets of the partnership. C) A partnership can be dissolved only by court order. D) In the absence of agreement to the contrary, the partnership is dissolved when one of the partners serves the others with notice to the effect that he wishes to continue. E) In the absence of agreement to the contrary, when one of the partners is injured, the partnership is dissolved.

Owes a personal debt

Which of the following complaints would lead to a successful action under the Sale of Goods Act? A) "I left the car here with orders to adjust the front lights; I did not order a wheel alignment and I don't want to pay for it!" B) "I paid $1000 for government bonds, but you have sent me shares in a private company that I never heard of!" C) "What do you mean that you are not going through with the contract to sell me that lot? I have workers ready to start construction one week after the closing date!" D) "I hired you to tutor me for my chemistry exam, not to tell me your personal problems week after week!" E) "I paid a lot of money for this car and this is the third time I've had it back in the first week. Something is seriously wrong with it."

Paid a lot of money for this car

With regard to corporate law, which of the following is true? A) Par value shares may be misleading because the share, after being issued, will be valued by market forces and that value may not be the value on the face of the share. B) Federal corporations are created only by special acts of Parliament. C) A shareholder in a closely-held corporation is always entitled to sell his shares to whomever he wishes. D) The charter document of a B.C. company is called the "Articles of Incorporation," and it contains an objects clause, i.e., a clause setting out the limits of the company's business. E) Shareholders shall manage the affairs of the corporation and they must exercise care, diligence, and skill in doing so.

Par value

Which of the following is incorrect with respect to the law of infants and their parents? A) As a general rule, parents are not responsible for the torts of their children. B) A parent is responsible for the debt of his child if that parent has guaranteed the loan. C) A parent can be liable for a tort committed by her child if it can be shown that the parent was negligent as well. D) As a general rule, parents are not responsible for the contracts of their children. E) A parent is responsible for the obligations of her children in both tort and contract law.

Parent is responsible for obligations

Which of the following is true with regard to the intention of the parties to an agreement to enter into a legal relationship? Where appropriate, assume that all the other elements necessary to form a contract are present. A) Since family matters are private matters, an agreement between a husband and wife to transfer property from the husband to the wife could not be a contract even if all the other elements of a contract were present. B) The court will presume there is always an intent to be legally bound in family situations. C) Parties may expressly state their intention to be legally bound, in which case the court need not rely on presumptions. D) The court makes presumptions about the intention of parties to be bound, whether that presumption may be rebutted by evidence to the contrary, makes no difference to the court. E) An intention to be legally bound is not a necessary element of a contract.

Parties may expressly

Which of the following is an example of a breach of a fiduciary duty? A) A shareholder of a corporation voted in favour of an acquisition by the corporation at the annual general meeting because he secretly had an interest in the corporation being purchased. B) A shareholder of ABC Ltd., a trucking corporation whose shares are listed on the Vancouver Stock Exchange, is working as an employee for ABC Ltd.'s competitor, Jonstone Trucking. C) A partner in a firm learned of a business forced to sell some heavy equipment. Although the partnership could have used the equipment, he bought and sold it at a substantial profit before the partnership was given a chance to buy it. D) A promoter of a corporation sold property to the corporation for four times what he paid for it after he made full disclosure of his interest to an independent board of directors, which voted for the purchase. E) The directors of the corporation, contrary to the request by the shareholders, refused to declare dividends.

Partner in a firm learned

Jed Wimsey, in auditing the books of various businesses around town, was talking to you, his best friend, about certain practices that he thought improper. Which of the following practices he found would be a breach of fiduciary duty? A) A partner of a firm that sold hospital supplies had, without the knowledge or consent of his partners, started a competing business that he ran from his own home. B) An officer of a corporation took advantage of an opportunity he learned about as an officer of the corporation, but took steps to determine that the corporation was not interested in it and received permission to do so from the board of directors. C) A director of a corporation profited $25,000 from a contract between the corporation and sellers of some property in which the director had an interest, after the director made full disclosure of his interest to the board of directors and abstained from the vote. D) A shareholder belongs to a group that directly opposes the policy of the corporation with regard to its logging and mining operations. E) The directors failed to declare a dividend for the fourth year in a row.

Partner of a firm sold hospital supplies

With regard to the law governing privity of contract and assignment, which of the following is false? A) An employee sent by his employer to do a routine job for one of the employer's customers is not in a contractual relationship with the customer. B) Novation refers to the ending of the original contract and entering into a new contract with changes in terms, such as substituting one party for another. C) Assignments are modifications of the privity of contract rule since they do allow a stranger to the contract to receive benefits from the contract. D) A party to a contract for services can assign both his contractual obligations and his contractual rights. E) A statutory assignment is easier to enforce than an equitable assignment.

Party to a contract

Which of the following is false with regard to the law of contracts? A) A party to a contract for services can assign both his contractual obligations and his contractual rights. B) Assignments are modifications of the Privity of Contract Rule, since they do allow a stranger to the contract to receive benefits from the contract. C) An employee sent by his employer to do a routine job for one of the employer's customers is not in a contractual relationship with the customer. D) The assignee for value of a negotiable instrument may acquire better rights than the assignor had. E) A statutory assignment is easier to enforce than an equitable assignment.

Party to a contract for services

Which of the following debts continue even after a bankrupt has been discharged? A) Unsecured loans B) Secured loans C) Judgment debts D) Ordinary debt E) Past maintenance for dependents

Past maintenance

Keri went to Crandon's computer outlet with her brother Paul, who was buying a laser printer. While she was waiting for him, she saw a poster saying the store was collecting funds for a special computer for a student recently disabled in an accident. The seller induced Paul to buy the model "X" printer by stating as a fact that the printer could interface with his Macintosh clone. Paul paid $900 for the printer. Also, Keri gave $15 to the student fund after the seller confirmed he was collecting for the student's computer. Later Paul and Keri learned that neither statement was true - the printer didn't interface with Paul's computer and the store was doing nothing for the student - and that the seller didn't believe that either statement was true when he made them. On these facts, which of the following is true? A) Paul could sue for rescission because of the misrepresentation. B) Keri could sue for damages due to a misunderstanding. C) Only Keri has a remedy because she had been fraudulently misrepresented. D) Paul could sue for damages due to an innocent misrepresentation. E) The court would rescind Paul's contract only with proof that the seller knew his statement was false.

Paul could sue for rescission

Often a party to a contract wants to avoid his obligations by arguing that the contract was entered into because of a mistake, misrepresentation, undue influence, or duress. Which of the following is true with regard to these areas of the law? A) Independent legal advice given to a person is good evidence of undue influence. B) A buyer could not be awarded the equitable remedy of rescission if the seller honestly believed that his misrepresentation, which persuaded the buyer to buy, was true. C) Where, a written document embodies the the original oral agreement, a party to the contract could ask the court for the equitable remedy of rectification. D) If a seller persuades a person to buy something by an innocent misrepresentation, the buyer could ask for rescission and damages for the tort of deceit. E) A person can successfully argue non est factum and avoid his obligations under a contract only if he was misled about the very nature of the document and was not careless.

Person can successfully argue non est factum

Which of the following statements is correct with respect to the process of conciliation/mediation? A) The conciliator or mediator's recommendations cannot be ignored by the parties. B) Conciliation/mediation is a process by which a third party is chosen by the parties to impose a settlement on the parties. C) This refers to the requirement that the parties bargain in good faith to reach a contract. D) Conciliation/mediation is a process by which a third party is chosen by the government to impose a settlement on the parties. E) Conciliation/mediation is a process by which a person is chosen by either the government or the parties, who then tries to bring the parties to an agreement.

Person is chosen by either

Which of the following is true with regard to remedies for breach of contract? A) Damages are awarded by the court to a person who has suffered loss because of a breach of an essential term of the contract, but are not awarded for a breach of a non-essential term, i.e., a warranty. B) The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss. C) A person who breaches a contract is liable for all the foreseeable loss that directly and naturally flows from the breach. D) Non est factum is an equitable remedy forcing a person to comply with the terms of the contract. E) If the seller has committed a "fundamental breach" of the contract, an exemption clause absolves the seller from liability.

Person who breaches is liable

Read the following statements with regard to the parties involved with negotiable instruments and indicate which is false. A) The person who signs and issues the cheque is the drawer. The person who is owed the money and receives the cheque is the drawee. B) The person who signs a promissory note is the maker of the note, and unlike a cheque, the note will not include a drawee. C) An acceptor of a draft will become liable to the payee for the amount of the draft. D) A person who signs a draft is a drawer; the party commanded to pay is the drawee. E) The payee of a negotiable instrument can negotiate the instrument to a holder who will be remote in relation to the drawer.

Person who signs and issues the cheque

When lending money to a closely held corporation, what will a bank usually insist on from the major shareholders or other principals? A) a debenture B) a fiduciary obligation C) a personal guarantee D) a preemptive right E) a negotiable instrument

Personal guarantee

Which of the following is true with regard to tender of performance? A) If Walt attempts to pay Sarah the $750 debt he owes her with a cheque on the date and at the place designated in the contract, she will have to accept that cheque even though there was no mention of payment by cheque in the contract. B) If the seller attempts to deliver the contract goods at the time and place designated in the contract, but the buyer refuses delivery, the seller will have to make another attempt to deliver before he can sue for breach of contract. C) If Sam attempts to deliver the truckload of strawberries at Frank's produce plant at 8:00 p.m. Saturday, they cannot be refused as long as the delivery was before the specified July 10 deadline. D) If Ivan attempts to pay his $25 debt to Jan in 25-cent pieces, that attempt constitutes a lawful tender of Ivan's obligation. E) If Pete shows up at Valley Service Station to fix the gas pumps on the date and at the time he was supposed to, but Valley's manager tells him to come back later, Pete has no further obligations and can sue for breach of contract.

Pete

ABC Ltd. is a closely-held corporation. Two of the shareholders serve as directors. As directors, they voted to issue themselves more shares to increase their voting control of the corporation. Which of the following provisions would aid the other shareholders? A) Dissent procedure B) Preemptive right provisions C) Indoor-management rule D) Relief-from-oppression provisions E) Derivative-action provisions

Preemptive

Three classmates incorporated about a week after graduation. The authorized capital was 500,000 common no-par-value shares. Each took one share; each was a director. If the directors decide to issue more shares from the treasury to raise more capital, which of the following provisions ensures that they keep their proportionate holdings? A) Preemptive right provision B) Indoor-management rule C) Relief-from-oppression provision D) Dissent procedure E) Derivative-action provision

Preemptive

You have been asked by two fellow graduates to join them in incorporating a closely held corporation that would commence a consulting business. One was in your class, so you know him quite well, but the other is graduating from a different school. You have been discussing the law to review the protection it gives you. Read each of the following statements separately and indicate which is true. A) A shareholder's agreement allows shareholders and not officers to manage the corporation. B) If you were voted out as a director by the others, who could show that it was in the best interests of the corporation, you could always sell your shares to any interested buyer without interference from the other directors. C) If you have preemptive rights and the directors decide to issue a new allotment of shares, the corporation must offer you a portion of the new issue to allow you to keep your proportional share of the corporation. D) As a shareholder, you will have the right to vote for the officers of the corporation. E) If you each take one-third of the first allotment of the shares, you will necessarily be a minority shareholder, and have no voting rights in electing the directors of the corporation.

Preemptive rights

Which one of the following statements accurately describes the operation of a condition subsequent? A) There is no such thing recognized in the common law. B) This is a term in a contract that must be met before the contract becomes fully operational. C) This is a term in the contract that provides for the premature cessation (ending) of the parties' obligations upon the occurrence of some particular event. D) This occurs when one party shows up at the right time and place ready, able, and willing to carry out his obligations under the contract. E) This occurs when some event that the parties have not anticipated makes performance radically different from what they agree to.

Premature cessation

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) Because of the marital obligation, there is always an enforceable contract in these circumstances. B) The court will make no presumptions in these circumstances because there is never a contract between husband and wife. C) The court will enforce the promise only if they determine it to be reasonable. D) Since this is a domestic relationship, there is a presumption that there is no contract. E) Since this is a domestic relationship, there is a presumption that there is a contract.

Presumption there is no contract

The bulk sales acts in place in some provinces are designed to do which of the following? A) To give priority to creditors who are owed money in respect of inventory sold to the debtor within the last 30 days B) To prevent merchants from selling all or almost all of their business's assets before a creditor can take action to stop them C) To provide relief to commercial purchasers when a ship's cargo is destroyed D) To set minimum statutory standards for goods sold by description in large, unpackaged quantities E) To enable commercial debtors to sell their products at a reduced price in order to pay back their creditors in a more timely way

Prevent merchants

Indicate the correct statement about consideration. A) Consideration is "the price for which the promise (or the act) of the other is bought." B) In a unilateral contract, the performance of the promisee provides no consideration to the promisor. C) In a bilateral contract, the exchange of promises does not provide consideration for both parties. D) An altered course of action, e.g. forbearance, is not good consideration. E) The common law holds that consideration must be adequate to insure that contracts are fair bargains.

Price for which the promise

With respect to the formation of agency by estoppel, which of the following statements is true? A) The issue of apparent authority arises only if a person acts as an agent when he has express or implied authority. B) When a party terminates an express agency agreement with his agent and notifies third parties with whom that agent normally dealt, that party will be liable on a contract made for him by that "fired" agent. C) When a party represents, by words or conduct, that someone is his agent, that party can later deny liability on a contract made for him by that agent on the basis that no express agency agreement existed. D) When a third party suspects that the agent he deals with has no authority, there is no obligation on him to question the agent's alleged authority. E) If the principal tells an agent specifically not to sell something and the agent, in disobedience of those instructions, sells it anyway, the principal may be bound by the contract because of estoppel.

Principal tells an agent

Which of the following is true with respect to the application of tort law to the Internet? A) Because the Internet provides direct and inexpensive access to a massive audience, torts such as deceit, negligent misstatement, and defamation normal civil and criminal remedies do not apply. B) Since common law provides adequate protection, no new statutes need to be passed to provide additional protection. C) It is unlikely that courts will be willing to expand existing tort law to encompass new technologies. D) The principle of defamation will apply to the Internet just like any other form of communication, but the problems of jurisdiction and whom to sue will create significant obstacles. E) Companies that sell their products over the Internet will cannot be held liable under the laws of negligence if that product causes injury.

Principle of defamation

Which of the following attempts to form a contract would the court hold to be void? A) An oral agreement for a lease of land for two years. B) One of the parties was an infant at the time the agreement was formed. C) A promise by one person to pay another to defame a third. D) An oral agreement for the sale of land. E) A written promise to guarantee the debt of another person

Promise by one person

Mr. Goode, a neighbour of your parents, offered to sell you his house for $200,000, a bit below market value. You are definitely interested but would like to see if your employment contract will be renewed and to check about financing. Mr. Goode says that he'll hold the offer open for you until May 1, 2011. On these facts, which of the following is false? A) Mr. Goode will be bound to hold it open until that date if his promise to do so was written and under seal. B) Mr. Goode's promise to hold it open is sufficient; the offer is safe until May 1, 2011, when it will expire. C) Mr. Goode will be bound to hold it open if you offer and he accepts your offer to wash his car every Saturday morning for two months in exchange for his promise to hold it open. D) If you buy an option to buy a house, you still don't have to buy the house. E) Mr. Goode will be bound to hold it open if you pay him and he accepts some money to hold it open until that date.

Promise to hold it open is sufficient

Although the contract called for the delivery of three manuals, the writer had put so much effort into the first two that the buyer agreed to pay the whole contract price, $3,000, for the two instead of the three manuals. Which of the following stops the buyer from later suing the writer for breach of contract and demanding the completion of the third manual? A) No consideration given by the writer B) He doesn't have to pay anything because the job was not completed, and so he can even get back what he paid. C) Promissory (equitable) estoppel D) He only has to pay a reasonable price for the work done. E) Doctrine of quantum meruit

Promissory estoppel

As property manager of a 15-unit apartment block, you receive rent payments on the first of every month from each tenant. Mrs. Lone, in apartment 105, whose rent is $500 per month, lost her job and was in dire financial difficulties. You agreed to take only $400 per month. For the last ten months, she has paid only $400 a month, but you have learned that for 4 months she has had a new and even better-paying job. You are angry that she failed to tell you this and you want to sue her for the entire amount of back rent ($1,000). Which of the following arguments could she use most effectively against you? A) Duress B) Mistake C) Promissory estoppel D) Breach of contract E) Undue influence

Promissory estoppel

A person who participates in the initial setting up of a corporation or who assists the corporation in making a public share offering is known in law as A) a shareholder. B) an initiator. C) a promoter. D) a preferred shareholder. E) a founder.

Promoter

Which of the following statements about pre-incorporation contracts is false? A) Ratification of pre-incorporation contracts is invalid at common law, since the corporation did not exist at the time the contract was made. B) Promoters will often purchase property on behalf of a corporation prior to incorporation and then have the corporation ratify after incorporation has taken place. C) Many jurisdictions have made legislative changes permitting later-incorporated corporations to ratify pre-incorporation contracts. D) Promoters cannot be held liable for losses, due to the doctrine of corporate myth. E) If a corporation does not ratify a pre-incorporation contract, or if a pre-incorporation contract is signed in a jurisdiction which does not permit ratification, the promoter remains solely liable for any losses.

Promoters cannot be held; corporate myth

Amy Carr looked at a 2011 Ford being sold by a private party who told Carr that the car was free and clear of all encumbrances. Carr had the Ford inspected by Automobile Association, which reported it to be in good condition. Carr bought the Ford for $8,000. Two months later, the car was seized by a chattel mortgagee bank that had properly registered its claim in the registry within the time allowed by the act governing chattel mortgages. On these facts, which of the following is true? A) Carr would be able to keep the Ford because the seller had represented that the Ford was free and clear of encumbrances. B) The chattel mortgagee would get the Ford because it properly registered its chattel mortgage on time. C) Carr would be able to keep the Ford because she was an innocent purchaser without notice of any lien or charge. D) Carr will lose the car and has no recourse against anyone. She should have checked the registry. E) The chattel mortgagee would get the Ford because it had title to it as security, and it could claim its right to title whether it registered the chattel mortgage or not.

Properly registered its chattel mortgage on time

Deceitful practices and fraud are ongoing concerns for those transacting business on the Internet. Pat has recently been the victim of such a scam. He gets into a heated discussion with his friend over the application of current consumer protection laws to online transactions. Which of the following statements is correct? A) Consumer protection law in respect of online transactions is governed by the federal Universal Internet Transactions Act (UITA). B) While case law applies to online activities, statute law - such as sale of goods legislation - does not apply to such transactions. C) Provincial consumer protection legislation has been ineffective in protecting consumers with respect to internet transactions. D) Provinces are adopting federal Uniform Electronic Commerce Act guidelines. E) Although new legislation may be enacted in the future, general consumer protection legislation has yet to be extended to online transactions in any Canadian jurisdictions.

Provinces are adopting

A securities commission is A) a fee or percentage allowed to a shareholder in a share transaction. B) a permission to transfer shares in a closely held company. C) a collateral right to debt. D) a provincial agency that serves as watchdog on the stock market. E) an authorization to exchange confidential information.

Provincial agency

Deceitful practices and fraud are ongoing concerns for those transacting business on the Internet. Pat has recently been the victim of such a scam. He gets into a heated discussion with his friend over the application of current consumer protection laws to online transactions. Which of the following statements is correct? A) In most provinces, consumer protection legislation has been enacted to invalidate internet transactions and render electronic "signatures" ineffective. B) Provincial securities regulations will also apply to trades on the Internet, but amendments will likely be enacted to apply special provisions to electronic trading. C) Although new legislation may be enacted in the future, general consumer protection legislation has yet to be extended to online transactions in any Canadian jurisdictions. D) While case law applies to online activities, statute law - such as sale of goods legislation - does not apply to such transactions. E) Consumer protection law in respect of online transactions is governed by the federal Universal Internet Transactions Act (UITA).

Provincial securities

Which of the following is an example of an agent as opposed to an employee? A) Joe worked as a mechanic for Smith Used Cars Ltd. B) Joe worked as a janitor fo Smith Textiles. C) Joe worked as the purchasing agent for Smith Textiles Ltd. D) Joe worked as a delivery driver for Smith Textiles Ltd. E) Joe worked in the mailroom of Smith Textiles, sorting mail.

Purchasing agent

Which of the following is true with regard to remedies for breach of contract? A) The quantum (amount) of damages to be given to the victim of the breach may be limited to the amount specified in a liquidated damages clause of her contract. B) The victim of a breach can recover damages that he could have avoided if he had tried to mitigate his loss. C) A person who breaches a contract is liable for all the loss that directly and naturally flows from the breach, no matter how unforeseeable. D) Specific performance is the proper remedy to stop a person from doing something that he had promised in the contract not to do, e.g., not to compete, not to disclose secrets, etc. E) An injunction is an equitable remedy forcing a person to comply with the terms of the contract.

Quantum

Chad was the best private detective in the west. His system for tracking persons who have caused themselves to disappear was markedly superior to that of others. Sally, his only assistant, was considered so valuable that he always had her sign five-year contracts with non-disclosure clauses. Sally took notes at a private meeting between Chad and a representative of the RCMP who was negotiating a contract with Chad for tracking down two criminals. Sally and Chad took care that the discussions were understood to be confidential - - regarding both the information from the RCMP and from Chad about his methods. Sally was approached by a competitor of Chad, Mr. Adolph, who offered her three times her salary if she would break her contract with Chad, sign with him, and bring him information about Chad's tracking system. After some months, she did just that. Furthermore, she told Adolph the details of the information given to Chad by the RCMP, which caused the RCMP embarrassment, time, and money. Which of the following is false? A) The RCMP could not sue Chad for breach of confidence because the information disclosed by Sally was not novel know-how that was giving the RCMP the cutting edge in business competition. B) Chad could sue Sally for disclosing the information only if he had made it clear that the information was confidential and should not be disclosed. C) Chad could sue Sally for breach of her employment contract, not only on the clause relating to the term of her employment, but also on the non-disclosure clause. D) Sally owes a fiduciary duty to Chad because of her trusted position as an employee. E) Chad could sue Adolph for the tort of inducing breach of contract.

RCMP

Art Raskle was an officer, director, and employee of a broadly held corporation. At a directors' meeting, he was surprised but pleased to learn that the corporation was discussing a resolution to contract with the firm of Fielding's Office Supply for $200 worth of office equipment. He and a businesswoman recently bought that business; Raskle has a 45% interest. Raskle voted for the contract and the resolution passed without discussion by a vote of 6-0. Several months after completion of the purchase, the other directors learned of Raskle's interest in Fielding's Office Supply and called on him to account to the corporation for any profit made. Which of the following is true? A) Raskle is not in breach of any fiduciary duty because the dollar value of the contract falls below the minimum statutory threshold. B) Raskle must account for any profit made because he failed to disclose his interest and voted on the question. C) Raskle has breached his fiduciary duty but if the sale was "fair" and if the shareholders approve the sale by a special resolution after full disclosure, he need not account to the corporation for any profit made. D) Raskle has not breached his fiduciary duty because his vote did not determine the matter. Had he not voted, the result would have been the same. E) Raskle is not in breach of his fiduciary duty because directors of corporations vote on contracts in which they have an interest all the time.

Raskle must account

The promoter of a corporation, called Seymour Holdings Ltd., contracted for $4,000 worth of office furniture "on behalf of Seymour Holdings Ltd.," prior to incorporation. After incorporation, the new directors want to ensure that the corporation is bound. They will be able to do so if A) the promoter intended that the corporation, and not himself, would be bound by the contract. B) the promoter made it clear that he was signing on behalf of the corporation. C) the promoter was acting in the best interests of the corporation to be formed. D) the corporation is closely-held and the promoter is a director. E) the corporation ratifies the contract and ratification is permitted in the jurisdiction.

Ratifies

Which of the following is false with regard to "property"? A) Real property consists of land but does not include the buildings on that land. B) Both real and personal property can be given as security to a creditor that he will be repaid. C) Personal property includes chattels. D) Personal property includes intangible rights. E) Real property includes "fixtures."

Real property consists of land

When two parties are involved in a mutual mistake (misunderstanding) as to the meaning of a term of the contract, which of the following is usually applied by the court to settle the matter? A) Non est factum B) The court will find that there is no contract because there is no meeting of the minds. C) Caveat emptor D) The reasonable person test E) The equitable remedy of rectification

Reasonable person test

Which of the following types of contracts would not be considered illegal? A) Contracts to commit a tort B) Contracts that promote litigation C) Contracts that obstruct justice D) Contracts that reasonably restraint trade E) Contracts preventing someone from marrying

Reasonably restraint trade

The certification process was introduced to solve which of the following kinds of disputes? A) Jurisdictional dispute B) Rights dispute C) Interest dispute D) Recognition dispute E) Commercial disputes

Recognition

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) direct sales. B) consumer sales. C) referral selling. D) preferred selling. E) one-off marketing.

Referral

Jurisdiction with respect to the internet is an important area of concern. Which of the following statements is false? A) There must be a special link or connection to have a local court take jurisdiction. B) Without a degree of interactivity, the courts in a particular province may refuse to hear a case. C) It is relatively straightforward to take a judgment obtained in one jurisdiction, and enforce it in another. D) To avoid battles over jurisdiction, the parties should specify in their contract what law is to apply. E) A Canadian may be prosecuted for an activity that is against the law in one jurisdiction, but perfectly acceptable in another.

Relatively straightforward

Smith, Jones, and Brown incorporated XYZ Ltd. The three were sole shareholders, directors, officers, and employees. Jones and Brown disliked working with Smith. They knew he was good for the business, but they disliked his personality and politics. After a year, Jones and Brown, as directors, removed Smith as an officer and employee and raised their own salaries as employees. They then voted Smith out as a director at the next shareholders' meeting. Which one of the following provisions would aid Smith? A) Preemptive right provisions B) Dissent procedures C) Indoor-management rule D) Derivative-action provisions E) Relief-from-oppression provisions

Relief

Bob and Barb went into Logan Drugs, a self-service drug store. She bought some packaged cookies and he bought some Tilox, a cleaning solvent for tile that he hoped would remove greasy dirt from a painted kitchen chair. Because Bob wanted to work on the chair, Barb set their son, Keith, at the kitchen table with some cookies so he could watch without being in the way. After he had two cookies, Barb noticed that there were worms in the cookies. She took Keith and the cookies (made in Vancouver) to the doctor. While they were away, Bob learned too late that the Tilox did take off the grease but also the paint. The directions advised against using the product on wood or painted surfaces. On these facts, which of the following is true? A) Bob's purpose for buying the cleaning solvent was implied although not express. B) Keith (represented by a parent) would have an action against the makers of the cookies in tort law. C) Logan Drugs has no right to sue the makers of the cookies under the Sale of Goods Act. D) Bob has a cause of action against Logan Drugs because it is a dealer in cleaning products and this Tilox was not fit for his purpose. E) Barb could not sue Logan drugs for breach of contract for the wormy cookies.

Represented by a parent

Cleo entered into a contract with Harvey in June to redecorate his apartment before Christmas. However, in the middle of October, she informed him that she would not be able to do his job because she had been offered a big contract in Japan that would take her away until spring. Which of the following is true with respect to this situation? A) The most likely remedy would be for the court to award specific performance to make her do the job. B) Cleo has repudiated the contract and Harvey can take legal action immediately. C) Their contract has been frustrated by circumstances outside their original contemplation, and thus they are excused from their previous obligations. D) Harvey must wait until Christmas to see if Cleo actually performs before he can take legal action. E) Cleo could claim quantum meruit for any work she had done so far and that would be the end of the matter.

Repudiated

Which of the following is not an unfair labour practice? A) An employee is required to join a union as a condition of employment. B) A union representative threatens to have an employee beaten if he fails to join the union. C) An employer threatens to start another business that is non-union and transfer all the work to that business. D) An employer threatens to have an employee fired if he joins a union. E) An employer pays higher wages when he learns that a union is trying to organize his employees, with the intention of persuading the employees they don't need a union.

Required to join

A computer salesman innocently misrepresented a fact about a Macintosh computer to a customer. Although this fact was not about a term of the contract, it did induce the customer to buy the computer. The customer has now learned the true facts and wants to return the computer. If the store refused to take it back, the customer would ask the court for which equitable remedy? A) Rescission B) Injunction C) Rectification D) Restitution E) Damages

Rescission

A fraudulent misrepresentation which induces another person to enter into a contract can result in which of the following remedies? A) Rectification B) Rescission and/or damages C) Rescission only D) Damages only E) There is no remedy available for fraudulent misrepresentation.

Rescission and/or damages

Which one of the following statements is correct with respect to sole proprietorships? A) The sole proprietor need not adhere to any licensing and government regulations. B) The sole proprietor is responsible for the torts committed by an employee that take place during the course of business. C) The sole proprietor has the same extent of liability as a shareholder. D) The sole proprietor has limited liability. E) The sole proprietor must consult with the other owners before making any major decisions regarding the business.

Responsible for the torts

Greg told Rick that he would be willing to pay a high rate of interest for a two-month loan of $2,000. Rick agreed to lend Greg this amount at an annual rate of 20%, repayable March 1, 2011. Greg agreed to these terms. Greg did not pay on March 1. Rick learned that Greg had recently completed some work for Martinson for which Greg was owed $2,000. Now that Greg is in default, which of the following is false? A) Rick could sue Greg for breach of contract. B) Rick could execute against Greg even if Rick had not obtained judgment against him. C) If Rick obtained a judgment against Greg, he could compel him to be examined about his income, property, and debts. D) Once he has obtained judgment, Rick can garnishee the money owed to Greg by Martinson. E) Rick could not place Greg into bankruptcy unless Greg had committed an "act of bankruptcy."

Rick could execute

When the transaction is registered, the creditor's rights include all of the following except A) resell the security. B) seize the security. C) right to order the debtor arrested or detained. D) right to sue debtor rather than seize security. E) contractual remedies upon default

Right to order

After a creditor has taken possession of collateral, the debtor's right to reclaim it on payment of any money owing is known as a A) right of settlement. B) constructive trust. C) right to salvage. D) collateral contract. E) right to redeem.

Right to redeem

Collective agreements must have provisions in them providing for the arbitration of which of the following kinds of disputes? A) Jurisdictional dispute B) Rights dispute C) Interest dispute D) Recognition dispute E) Commercial disputes

Rights

Tufts and McDougal were having an argument about the law regarding performance of a contract. Which one of the following statements of theirs is correct? A) If Roscoe tries to deliver lumber to Jed in accordance with their contract and Jed doesn't take delivery of it, Roscoe can sue Jed for breach of contract without ever trying to deliver it again. B) If Jed shows up with cash for the mechanic on the day and at the place designated in the contract, and the mechanic refuses to take it for some reason, Jed doesn't ever have to pay him. C) If Joan owes a $500 debt due on a specific date, she doesn't have to pay until the creditor seeks her out for payment. D) If Jed owes the mechanic $500, a cheque is as good as cash in law even if the mechanic said he wouldn't take a cheque. E) If Jed has to pay $500 to his mechanic, he can pay the whole debt in dimes and the mechanic has to take them.

Roscoe

The Weyburn Farmers' Co-op contracted to sell a carload of grain to Mr. Takemori for $2,000. The co-op assigned, in writing, its contractual right to receive the $2,000 to the Royal Bank, to which it was indebted. The Royal Bank gave written notice of the assignment to Takemori. Unknown to the buyer and the seller, at the time of the contract the grain had been destroyed because of a train derailment caused by the negligence of the train conductor. On these facts, which of the following is true? A) The Royal Bank will receive part payment from Takemori. B) The Royal Bank, the assignee, will receive the $2,000 because it could prove privity of contract with Takemori. C) The Royal Bank will receive nothing from Takemori, because Takemori owes nothing to the Co-op. D) Because of the conductor's negligence, the railroad will have to honour Mr. Takemori's contract with the Royal Bank. E) The Royal Bank will receive $2,000 from Takemori because there was an assignment in writing and that is the sole test for determining if the assignee will be paid the amount of the assignment.

Royal Bank will receive nothing

Which of the following is not federal legislation? A) Food and Drug Act B) Competition Act C) Hazardous Products Act D) Motor Vehicle Safety Act E) Sale of Goods Act

Sale of Goods Act

Which of the following agreements has to be in writing under the original Statute of Frauds in order to be enforceable? A) An agreement for the sale of a building lot. B) An agreement for the sale of a farm animal. C) An agreement by a creditor to accept $800 in full satisfaction of a debt in the amount of $1,000. D) A lease of a vehicle for a term commencing on November 1, 2011, and expiring November 1, 2013. E) An agreement to sell a car on January 1 of the following year.

Sale of a building lot

Which of the following contracts would be covered by the Sale of Goods Act? A) The purchase of a house B) A contract for the sale of a famous painting C) A contract for medical services with a doctor D) The sale of corporate shares E) The trade of a car for a boat involving no money

Sale of a famous painting

To which of the following transactions would the Sale of Goods Act apply? A) The sale of an office building B) The sale of shares in a corporation C) The oral lease of an apartment for less than two years D) A heart transplant operation E) The sale of a puppy to be given as a present by the buyer

Sale of a puppy

To which one of the following would the Sale of Goods Act not apply? A) A meal in a restaurant B) A contract for future goods when title will pass in the future. C) A contract for the purchase of a car D) A contract for the sale of a ranch E) A contract for the sale of tangible personal property

Sale of a ranch

When Mr. George sold his house, he rented an apartment and was forced to store some furniture until he bought another house. He attended the downtown office of Security Warehousing Ltd. and entered into a bailment contract that promised to safeguard the furniture. Four months later, his things were stolen from the warehouse, and when he asked for compensation for his loss, the company admitted it was in breach of contract, but said it was exempt from liability because of an exemption clause posted on the wall of the storage area where George had taken the furniture. The sign read "Not liable for loss due to fire or water." On these facts, which of the following would be his least successful argument to nullify the exemption clause? A) The Sale of Goods Act voids such an exemption clause. B) Such terms cannot be unilaterally imposed. C) There has been a fundamental breach of the contract. D) On the strict construction of the clause, it doesn't cover the cause of the loss. E) He failed to receive reasonable notice of the clause at the time of contract.

Sale of goods act

Given the provisions of the Statute of Frauds, which of the following contracts should be evidenced in writing? A) A retainer with a lawyer B) Domestic agreements C) A sale of goods involving $4 D) An employment contract E) A sale of land

Sale of land

With respect to the breach of a sale-of-goods contract, consider the following statements. Which of these is false? A) Whether a seller can sue for the price or damages depends upon whether or not title has passed. B) Before a court will award a remedy, generally it will decide whether the breach was of a condition or a warranty. C) Even after the seller has given possession of the goods to the buyer, he may be able to get them back under the provisions of the Bankruptcy and Insolvency Act. D) The Sale of Goods Act excludes the possibility of the various equitable remedies such as specific performance. E) Where a buyer has continued to push a breaching seller for performance, he could lose the right to discharge the contract in the event of a breach of a condition.

Sales of Goods Act excludes

Which of the following is false with regard to a "holder in due course"? A) A person cannot be a holder in due course if he acquired the instrument in bad faith; e.g., he tricked the person into giving him the cheque. B) A holder in due course is the same as the "drawee" or "acceptor." C) A holder in due course is in a better position to be paid by the drawer or maker of the instrument than is an immediate holder, because there are fewer defences against his claim for payment. D) A holder in due course cannot be an immediate party. E) A person cannot be a holder in due course if he knew the instrument had been obtained by the payee by fraud.

Same as the drawee or acceptor

In which of the following situations will Smith be responsible for the tortious conduct of Jones? A) Jones is a salesperson Watson's Warehouse visiting Smith's Grocery Store Ltd. B) Jones is a secretary working in Smith's office. C) Jones is a independent contractor installing drywall for Smith's grocery store. D) Jones is a computer programmer working for Ace Computer Ltd. and installing new software for Smith's department store. E) Jones is a self-employed vacuum cleaner salesman and Smith manufactures one of the lines he carries.

Secretary

Smedlap, a trucker, and Dewdney, a farmer, entered into a contract under which Smedlap agreed to haul all of Dewdney's 2011 pumpkin crop to market in time for the Halloween sales. However, the day before Smedlap was to pick up the pumpkins, he called Dewdney and told him that, since he had received such a good offer to buy his truck, he had sold it and therefore was not able to haul Dewdney's pumpkins. There was not enough time for Smedlap to buy another truck, but he was sure that Dewdney could make other arrangements and he hoped that he hadn't unduly inconvenienced him. Unfortunately, Dewdney was not able to make arrangements in time for the Halloween market, and instead he had to sell his crop to a pie-filling canner for much less than he could reasonably have expected at the market. Furthermore, the market owners were so disappointed by Dewdney's failure to deliver that they refused to give him their usual order for Christmas turkeys, in contrast to previous years, where this had generated his major income for the year. He was forced to find another outlet for his turkeys, and again he ended up selling to commercial processors for a substantially lower price. As a result of these two events, Dewdney was unable to keep up his mortgage payments on the farm and eventually he lost it to the bank in a foreclosure action. Dewdney is now suing Smedlap to recover these losses. Identify the correct statement with respect to the question of whether Smedlap's conduct was a breach of contract. A) Smedlap simply cancelled the contract, which he was entitled to do as long as it was before performance was due. B) Smedlap is not liable because it was not his fault that Dewdney was unable to make other suitable arrangements. C) This was a breach that consisted of self-induced frustration. D) This was not a breach because Smedlap did not do it maliciously, and he gave Dewdney what he honestly believed was adequate notice to make other arrangements. E) The contract was discharged by frustration.

Self induced frustration

Which of the following contracts is void? A) A contract with an insane person for a T.V., where the insane person, or his legal representative, can prove that he was insane at the time of the contract but cannot prove anything else about the incident. B) Any contract with a status Indian. C) A contract containing an exculpatory clause limiting the liability of one of the parties. D) A contract with an insane person for necessaries such as food and shelter. E) A contract to sell a crop of marijuana growing in a particular field.

Sell a crop of marijuana

Roberts has the chance to buy three adjacent city lots zoned "duplex." The most profitable return would be the building of four townhouses across the three lots, but that would necessitate getting permission from the city, and that procedure takes time. If Roberts buys a 60- day option from the seller of the properties for $400, which of the following is true? A) If Roberts does not exercise the option, she will get her $400 back because she didn't get what she was bargaining for. B) If Roberts does not exercise the option during the option period, she can later force the seller to sell that property to her at that price. C) By buying the option, Roberts has bought a period of time during which she must accept the land offer. D) The offer for the properties will expire before the end of the designated 60-day period, if another person offers a higher price. E) The seller is bound by contract neither to sell the property to any other party nor to revoke the offer within the option period.

Seller is bound

To which one of the following contracts would the Sale of Goods Act apply? A) A contract in which one party gives an antique pin in exchange for the other party giving an antique cigar box B) A contract in which the seller sells a computer, and ownership will transfer to the buyer at a specified future time C) A contract for the sale and purchase of a farm D) A contract for the assignment of a company's "accounts receivable" E) A contract with an artist to have a portrait painted

Seller sells a computer

Which one of the following will not end an offer? A) The offer is said to be open for 3 weeks and the 3 weeks expire. B) The offeree makes a counter offer. C) The offeror communicates a revocation of the offer. D) The offeror dies. E) The offeror sells the goods being offered to someone else.

Sells the goods

The directors held their last meeting on December 31 at 4:30 p.m., and it was conducted more like a party than a usual meeting. A director was negligent in signing a promissory note, which cost the corporation $15,000; furthermore, the director was in breach of his fiduciary duty because the note was paid to a corporation in which he had an interest. Which of the following is true? A) The proper plaintiffs in the action are the shareholders, under the relief from oppression provision. B) The shareholders could dissent to this act and force the corporation to buy them out at fair market value. C) A shareholder could commence an action on behalf of the corporation against the director if he gets the court's permission to do so. D) If the corporation failed to start an action through its authorized agents (e.g., its directors), no action could be taken because a corporation is merely a legal concept and must act through its authorized agents. E) The shareholders could force the director to pay the $15,000 to the corporation by insisting on their "pre-emptive rights."

Shareholder could commence an action

An agent owes a fiduciary duty to his principal; a director owes a fiduciary duty to the corporation; partners owe a fiduciary duty to the firm and to the other parties. Which of the following is not true with regard to one's fiduciary duty? A) A partner secretly competing with his own firm would be in breach of his fiduciary duty. B) An agent failing to disclose to his principal all information relating to the principal's business transaction would be a breach of his fiduciary duty. C) A fiduciary is in a position of trust and owes true loyalty to the person depending on him. D) A shareholder owning a business that secretly competes with the corporation is in breach of fiduciary duty. E) An agent would be in breach of his fiduciary duty if he let his interest conflict with his duty.

Shareholder owning a business

Which of the following is true with regard to the characteristics of corporations? A) A shareholder's liability is limited to the amount he or she paid for the shares. B) Shareholders, are liable for the debts and other obligations of the corporation. C) Directors are responsible for the shareholders of the corporation. D) The corporation is a separate legal person, but neither can sue nor be sued. E) The shareholders would be vicariously liable for any damage caused by an employee of the corporation carrying out his or her duties.

Shareholder's liability is limited

John Hollin was an officer, director, and employee of a large broadly held corporation. At a directors' meeting, he learned that the corporation was voting on a resolution to buy a piece of property from Sam Keanu for $100,000. It happened that Hollin was one of three co-owners of that property. Hollin voted for the purchase and the resolution passed without discussion by a vote of 5-0. Several months after completion of the purchase, the other directors learned of Hollin's ownership and called on him to account to the corporation for any profit made. Which of the following is false? A) The shareholders could proceed under the dissent procedure and force the corporation to buy them out. B) Hollin owed a fiduciary duty to the corporation and breached that duty by his actions. C) Hollin should have disclosed his interest and refrained from voting or otherwise influencing the decision. D) If the directors failed to take action, the shareholders could have brought an action on behalf of the corporation against Hollin. E) Hollin must account for any profit made because he failed to disclose his interest and voted on the question.

Shareholders could proceed under dissent procedure

Berman made a documentary on the life of musician Artie Shaw. Shaw was cooperative and gave her permission to use certain songs if she received proper permissions from the copyright holders.The cost of the film was funded by her own savings, a private investor, the Canada Council, the Ontario Arts Council, and deferred salaries and material costs. In March of 1987 the film won an academy award as the best feature documentary for 1986. In November of 1987 Shaw's lawyer contacted Berman's lawyer: "... This letter states that Artie Shaw has a 35% profit participation in the motion picture... ." Which of the following accurately sets out the legal position of the parties? A) Shaw has no claim since there was no such agreement. B) The court will award Shaw a reasonable profit because it is fair. C) A public celebrity has the right to prevent this kind of exploitation if Berman refuses this demand. D) Shaw has a right to this share because the movie is about him. E) The court will imply an agreement to this effect between the parties.

Shaw has no claim

Aunt Juliet wants to incorporate a small closely held corporation. Which of the following bits of advice, given to her by friends, is false? A) In some jurisdictions in Canada, she could be personally responsible for a pre-incorporation contract. B) The incorporation document to be submitted in Ontario is the "Articles of Incorporation." C) She can enter into a contract on behalf of the corporation even before incorporation and the company will automatically be bound when it is incorporated. D) The incorporation documents to be submitted in B.C. are called the "Memorandum" and the "Articles." E) She has the option of incorporating federally if she wants.

She can either enter into a contract on behalf

Roberts has the chance to buy three adjacent city lots zoned "duplex." The most profitable return would be the building of four townhouses across the three lots, but that would necessitate getting permission from the city, and that procedure takes time. If Roberts buys a 60- day option from the seller of the properties for $400, which of the following is false? A) The offer for the properties will expire at the end of the designated 60- day period. B) The seller is bound by contract neither to sell the property to any other party nor to revoke the offer within the option period. C) If Roberts does not exercise the option during the option period, she cannot later force the seller to sell that property to her at that price. D) By buying the option, Roberts has bought a period of time during which she may or may not accept the land offer. E) If Roberts does not exercise the option, she will get her $400 back because she didn't get what she was bargaining for.

She will get her $400 back

Which of the following statements would be true with regards to the Uniform Electronic Commerce Act (UECA)? A) An offer will be accepted and a contract formed only when the offer is sent and accepted by snail mail, and not email. B) A password or encryption does not authenticate an electronic document. C) The UECA changes the law with respect to the requirement of written documents and signatures. D) The use of electronic documents is not allowed with regards to online purchase of goods. E) A signature equivalent may be a password or some other form of encryption.

Signature equivalent

Which of the following statements regarding cybersquatting is true? A) Registration of domain name precludes someone from registering a similar name to confuse visitors of their business website. B) Businesses that did not register their domain name, have no recourse against someone else appropriating their name and registering it first. C) Similar domain names are registered just to sell them to others or so that visitors making slight but expected mistakes are intercepted and redirected to a competing business. D) Cybersquatters capture domain names that rightfully belong to no one. E) A business is entitled to its own unique domain name regardless who registered it first.

Similar domain names

Which of the following is false with regard to the intention of the parties to an agreement to enter into a legal relationship? Where appropriate, assume that all the other elements necessary to form a contract are present. A) Since family matters are private matters, an agreement between a husband and wife to transfer property from the husband to the wife could not be a contract even if all the other elements of a contract were present. B) An intention to be legally bound is a necessary element of a contract; without it there is no contract. C) The court will presume there is no intent to be legally bound in social situations. D) Although the court makes presumptions about the intention of parties to be bound, the presumption may be rebutted by evidence to the contrary. E) Parties may expressly state their intention to be legally bound, in which case the court need not rely on presumptions.

Since family matters

Mr. A is the sole shareholder of X Ltd., and is also a director of Y Ltd. Y Ltd. is negotiating to buy property from X Ltd. Which of the following is false? A) Failure to disclose his interest will make Mr. A liable to Y Ltd. for any profits he makes on the transaction and for any losses suffered by Y Ltd. B) Mr. A. does not owe a fiduciary duty to X Ltd. or to his fellow X Ltd. shareholders. C) So long as Mr. A discloses his position to the board of directors of Y Ltd., he can vote in favour of the contract at the directors' meeting. D) Mr. A. has a duty to act in the best interests of Y Ltd., and to avoid any conflict of interest. E) To protect himself, Mr. A must disclose his interest to the other directors and refrain from voting or influencing the decision.

So long as Mr. A discloses his position

Which of the following statements is correct with respect to the Sale of Goods Act? A) The parties are restricted to contract out of any of the terms of the Sale of Goods Act. B) The Sale of Goods Act does apply to the sale of land. C) Some of the terms of the Sale of Goods Act are implied in the contract of sale. D) The Sale of Goods Act does apply to the assignment of a contractual claim. E) The terms included in the Sale of Goods Act override the terms agreed upon by the parties to such a sale of goods.

Some of the terms

Which of the following is correct with respect to consideration? A) It must be reasonable. B) At least some money must be involved. C) It is binding even though a duty to so act already exists. D) It must be specific. E) It is to compensate for an act that happened in the past.

Specific

Alan entered into a written contract for the purchase of a house owned by Joe . But as the time to move approached, Alan discovered that Joe was refusing to move out and refusing to transfer the property. Apparently a dissatisfied customer had driven through the showroom window of Joe's new car dealership causing him considerable expense. Joe could no longer afford to purchase the new luxury home in Langley to which he had intended to move. Which of the following is the appropriate remedy in these circumstances for Alan, who really wants the house? A) Injunction B) Specific performance C) Damages D) No remedy E) Rescission

Specific performance

Which of the following is one of the remedies generally available for a breach of contract? A) Punitive damages B) Specific performance C) Novation D) Repudiation E) Anticipatory breach

Specific performance

Electronic commerce (E-commerce) legislation consists of: A) The laws of what jurisdiction should apply to internet transactions. B) The digital communication between government agencies. C) The laws to restrict internet gambling, pornography, and defamatory material. D) Specifies the time and place of the formation of electronic contracts. E) The laws regulating the internet and internet transactions.

Specifies the time and place

Which of the following is a violation of the fiduciary duty of a partner? A) Where one partner uses information that he has gained from the partnership for the advantage of the partnership. B) Where one partner learns of an investment opportunity in the field of the partnership and tells the partners. The partners decline on the opportunity, so he takes advantage of it himself C) Where a partner uses the partnership property for partnership business. D) When one partner starts another business without the consent of the other partners which is the same as or in competition with the partnership business E) Where one partner carries on an business unrelated to the partnership with the permission of the partners

Starts another business

Which of the following is true with regard to the law of contracts? A) A statutory assignment is easier to enforce than an equitable assignment. B) An employee sent by his employer to do a routine job for one of the employer's customers is in a contractual relationship with the customer. C) A party to a contract for services can assign both his contractual obligations and his contractual rights. D) Assignments are modifications of the Privity of Contract Rule, since they do allow a one person to take over the obligations of another. E) The assignor for value of a negotiable instrument may acquire better rights than the assignee has.

Statutory assignment

Back in the days when people in Vancouver sold houses as houses and not for demolition, Mrs. Reid prepared her house for the market by contracting with Silversteps Ltd. to have her front steps replaced for the sum of $800. Warren, an employee of the company, worked for days framing the stairs and pouring the concrete. Unfortunately, he had done the framing wrong and, in addition, the concrete mix was faulty, so all of his efforts were in vain; the stairs were worthless. On these facts, which of the following is true? A) Mrs. Reid could successfully sue only Silversteps Ltd. for breach of contract or Warren for breach of contract but not both. B) Mrs. Reid could successfully sue the manufacturer of the cement for breach of contract because the cement was not fit for its purpose. C) Mrs. Reid could successfully sue only Silversteps Ltd. for breach of contract. D) If Silversteps Ltd. failed to pay Warren under the employment contract, Warren could sue Mrs. Reid directly for his pay because he worked on her stairs. E) Mrs. Reid could successfully sue both Silversteps Ltd. and Warren for breach of contract because they were both connected with the job.

Successfully sue only Silversteps

Misgana ran into Tarja at their local gym. Tarja, it turns out, operated an art gallery that did custom framing and mounting. Misgana had some beautiful prints she wanted to have put into special frames and agreed to pay Tarja $400 to have this done. Tarja passed the task along to her new assistant, Shandy. Shandy used the wrong adhesive when mounting the prints, which meant they did not stick properly to the backing. Which of the following is true? A) Misgana could successfully sue Shandy and Tarja for breach of contract because both were connected with the job. B) Misgana could only sue Tarja because she is the one who did a poor job of the framing. C) Misgana could successfully sue only Tarja for breach of contract. D) If Tarja doesn't pay Shandy, Shandy could sue Misgana directly for her pay because she worked on Misgana's prints. E) Misgana could successfully sue only Shandy or Tarja for breach of contract, whichever she chooses, but not both.

Successfully sue only Tarja; breach of contract

Mr. Ho talked with Mr. Tarr, who ran a business called Roscali Roofing. Mr. Ho agreed to pay Tarr $250 for the repair of his roof. In time, Gene Fix, Tarr's employee, came to Mr. Ho's and worked on the roof. Fix used the wrong material in the repairs, which made all his effort worthless; during the next rain the roof leaked as before. Which of the following is true? A) Ho could successfully sue only Tarr for breach of contract. B) Ho could successfully sue only Fix or Tarr for breach of contract, whichever he chooses, but not both. C) Ho could successfully sue Fix and Tarr for breach of contract since they were both connected with the job. D) Ho could only sue Tarr because he is the one who did a poor job of the roof. E) If Tarr doesn't pay Fix, Fix could sue Ho directly for his pay because he worked on Ho's roof.

Successfully sue only Tarr

Rick has just been told that he will have to undergo a second operation because the results of the first operation are not as expected. In the first operation, a small device was inserted near his damaged knee to stimulate bone growth with electrical impulses. The device was not working. The operation was performed by Dr. Jones, who is employed by St. Everybody's hospital. There is evidence that the device itself is faulty. The hospital had purchased the device from Medisci Ltd., which had purchased it directly from the manufacturer, Electrobo Ltd. The operation is not covered by the medical plan, and it will cost Rick $5,000. Rick is very upset and wants to sue for damages. Which of the following is correct with respect to who Rick could sue and why? A) Rick can't sue anyone. There are no guaranties in surgery. B) Rick can sue Electrobo for both negligence and breach of contract. C) Rick can sue Electrobo for negligence. D) Rick can sue Medisci Ltd. for breach of contract. E) Rick can successfully sue the doctor for negligence.

Sue Electrobo for negligence

Which of the following is the consequence of an unpaid subcontractor failing to file his lien on time? The owner had contracted with the general contractor who in turn had contracted with this subcontractor. A) He will lose his right to place a charge against the owner's property, but he can sue the owner directly for the amount owed him, because his work and materials went into the owner's house. B) He can submit documents giving his reason and he will be allowed to file the lien late. C) He will lose all of his remedies. D) He loses his right to claim against the building but can sue the owner of the property directly. E) He would lose his right to place a charge against the owner's property, but he can sue the contractor on the contract.

Sue the contractor on the contract

Which of the following statements are relevant to determining the appropriate jurisdiction for litigation arising from online defamation? A) Whether there is a sufficient connection between the defamation and the jurisdiction for the case to be heard. B) Whether the defendant owns the ISP that posted the comments. C) Whether the plaintiff suffered any harm where the comment was posted D) Whether the website that posted the comments has a local server. E) Whether the defendant only intended for a local audience to view the comments.

Sufficient connection between

Colson went to Logon Drugs and bought some light bulbs for the hallways of his new apartment building. A tenant asked for one and Colson gave him one but told him he was responsible forgetting his own from now on. The bulb, manufactured by Burnaby Brite, Ltd. and sold to Logon Drugs by Dandy Distributors Ltd., was defective, improperly made. It exploded and set some curtains on fire. The tenant's apartment suffered $6,000 damage; he had to move out. He couldn't live there while repairs were being undertaken and had no choice but to find another place, as it would take three weeks to get the apartment liveable again. On these facts, which of the following is false? A) Logon Drugs cannot sue the manufacturer for breach of contract even though the manufacturer was at fault. B) The manufacturer could be sued in contract by Dandy Distributors, but could be sued by others only for the tort of negligence. C) The tenant could sue Logon Drugs for breach of contract or negligence because his loss was caused by the defective light bulb. D) Logon Drugs could sue Dandy Distributors for breach of contract, although it was not at fault for the damage. E) Logon Drugs had not really caused the damage, but it could still be sued by Colson for breach of contract.

Tenant could sue Logon Drugs

Jones entered into a contract for the sale of his barber shop to Harry Cutter. One of the terms of the contract was that Jones would never open up a similar business within 50 kilometres of the location of the barber shop being sold. About two weeks after the sale, Cutter noticed a new barber shop opening across the street with brand-new facilities and equipment. When he learned that the owner of the new shop was the very Jones who sold the business to him, he sued for breach of contract. Which of the following correctly indicates the legal position of the parties? A) The term is too broad and would be found to be void or non-enforceable. B) If the 50 kilometres is determined to be reasonable, this restriction will be valid and Harry Cutter will succeed. C) These terms are enforceable no matter how unreasonable because they are part of the bargain struck. D) Any such attempt to restrict competition is illegal and, no matter how reasonable the terms are, the provision will be void. E) The whole contract for the sale of the business is void because of the illegal term, and therefore Harry will be able to force Jones to take his barber shop back and return the purchase price.

Term is too broad

Which one of the following statements accurately describes the legal relationship between the principle of caveat emptor ("buyer beware") and the effect on a sale-of-goods contract of the Sale of Goods Act? A) Because caveat emptor applies to the quality of goods, the buyer's only protection is to examine them carefully and only accept them if he finds them to his liking. B) The sale of goods provisions with respect to fitness and quality always override a different stated intention in a contract for the sale of goods. C) The buyer must be particularly careful to make it an express term of the contract that he get good title to the goods. D) The Act provides a number of implied contractual terms to supplement those expressed in the contract, and these implied terms override the principle of caveat emptor. E) When there is a conflict between the principle of caveat emptor and the provisions of the Act, the principle prevails over the Act.

The Act provides a number of implied

If a bank as chattel mortgagee fails to register the mortgage of a car, which of the following is false? A) A potential purchaser of the car from the chattel mortgagor would not find the bank's interest recorded in the central registry. B) If the chattel mortgagor would sell the car to a third party and not pay the chattel mortgagee, the third party's claim would override that of the chattel mortgagee. C) If a trustee in bankruptcy seizes the car from the chattel mortgagor, the trustee's claim would override that of the chattel mortgagee. D) The chattel mortgagee has lost his security and thus all his legal rights. E) The failure to register would not affect the rights of the chattel mortgagee against the chattel mortgagor if no third party is involved.

The chattel mortgagee has lost

The contract signed by XYZ Ltd. and Charles provided that the company would receive a licence to use the computer program that Charles was creating, that Charles would complete the program by January 15, 2012, that Charles would retain copyright, and that Charles would receive $10,000 on completion of his work. Two weeks before the due date, Charles told the president of the company that he was not going to complete on time. The president said, "Don't worry about it; get it done as soon as you can." Charles was 10 days late in completing the work. The delay caused the company to lose money, so it sued Charles for damages. On these facts (which you should assume can be proved), which of the following is false? A) Charles could enter his defence and could also enter a counterclaim if he felt he had an action against the company. B) If this case were heard in the B.C. Supreme Court, the judge would have to follow a precedent on the point set by the B.C. Court of Appeal. C) The company has the right to sue even though it is not a natural person. D) The company doesn't have the right to sue because the law would presume that the parties did not intend to be legally bound. E) Charles could use equitable (promissory) estoppel as a defence.

The company doesn't have the right to sue

With regards to internet jurisdiction, the courts have identified eight factors in determining a real or substantial connection. Which of the following statements is false? A) There need be neither an unfairness to the plaintiff nor the defendant in assuming jurisdiction. B) The courts will consider the standards of jurisdiction, recognition, and enforcement prevailing elsewhere. C) The courts will not consider the standards of jurisdiction, recognition, and enforcement prevailing elsewhere. D) The courts will consider the involvement of the parties to the suit in determining jurisdiction. E) There need be a connection between the forum and the plaintiff's claim.

The courts will not consider

Grant and Shawna developed a new and exciting invention which they called the "Zlackerblogf". They incorporated "Zlackerblogf Industries Ltd." to be responsible for the manufacture and sale of this revolutionary new product. After years of success, they decided to sell their product online.When time came to register "zlackerblogf.com", however, they discovered that the domain name had already been taken by Curlicue Developments Inc., a major competitor. Which of the following is true? A) Curlicue Developments Inc.'s registered domain name could be used as a defence to any allegation of trademark infringement. B) If Curlicue Developments Inc. obtained the domain name to prevent their competitor from using it, this does not undermine Curlicue's claim to the name; it merely demonstrates that Curlicue is a crafty competitor. C) The dispute over the domain name could be dealt with by dispute resolution mechanisms in place to resolve exactly this kind of domain name conflict. D) Although Curlicue Developments Inc. may have acted improperly, once a domain name has been issued, it cannot later be rescinded. E) Zlackerblogf Industries Ltd. does not need to worry; because of the nature of the Internet, the same domain name can be used by more than one entity.

The dispute over the domain name

Which of the following is false with regard to contract law? A) An exchange of promises can be consideration adequate to form a contract. B) To form a contract, there must be an offer that is accepted unconditionally. C) The parties to a contract can always go to court and have the court declare a contract void if the consideration is not adequate, i.e. fair, even if there is no evidence of fraud, duress, undue influence, or mental incapacity. D) A contract for a $50,000 boat does not have to be evidenced in writing to be a valid contract. E) A contract is unenforceable if it is required to be evidenced in writing under the Statute of Frauds and is not.

The parties

Last night at the dinner table, Uncle Isaac started on again about his company buying a truck on time. Which of these statements by his friends is false with regard to conditional sales contracts? A) If the company is in default and the conditional seller seizes the truck, the relevant statute provides that it still has the right to redeem it within a short period of time. B) If goods are repossessed under a conditional sales contract, the creditor must use commercially reasonable care to protect the goods and keep them in good repair. C) The rights and obligations of the company differ substantially if the company buys the truck under a chattel mortgage rather than a conditional sale contract. D) If the company is in default, in some provinces the conditional seller can seize the truck, sell it, and sue for any deficiency between the amount received and the amount the company owes. E) If the company were in default, the conditional seller could sell the truck, but it must return any of the proceeds from that sale beyond the debt and costs owed.

The rights and obligations

With respect to a sale of goods, which one of the following statements is false? A) If the parties do not agree otherwise, the risk of loss stays with the seller until delivery. B) If the parties do not agree otherwise, the time of payment is the time of delivery. C) A seller who has been given a cheque that "bounces" (dishonoured for insufficient funds), in payment for goods that he still possesses, has rights against the goods themselves as well as an action for breach of contract against the buyer. D) The Sale of Goods Act does not apply to the purchase of real estate or of bonds. E) Legislation in most provinces will not allow a seller to override the requirement that goods supplied be fit and of merchantable quality in consumer transactions.

The risk of loss stays

They couldn't remember exactly how it happened, but the Mauri's ended up a three-computer family with the consequent mess of books and papers in three different rooms. Mr. Mauri hired a general contractor, Mr. Wip, to build a "computer room." Wip had several qualified workers but still sub-contracted with an electrician and a carpenter. The work went well. Mauri held back 10%, but paid out 90% in good faith; i.e., when he paid, there were no complaints or liens filed. It turned out, however, that before anyone had completed his work--and no one expected payment until the job was finished-- Wip disappeared with the money. On these facts, which of the following is true? A) If all those entitled to file a lien do file and prove in court the amounts owed, Mauri is responsible for the sum total of those claims. B) The workers and subcontractors have an action against Wip for breach of contract. C) If the carpenter properly files a lien in the appropriate office, he can be assured that he will recover the entire amount owed. D) The subcontractors, but not the workers, are entitled to place a lien on Mauri's property. E) If the electrician failed to file his lien on time, he can file it late if he uses the right form.

The workers and subcontractors

With regard to conditional sales and chattel mortgages, which of the following is false? A) If a conditional buyer defaults in his payments, the conditional seller can generally seize the chattel without a court order. B) There is no longer a distinction between a chattel mortgage and a conditional sale. C) A chattel mortgagee must register the mortgage in the appropriate registration office, not to protect his claim on the chattel against the chattel mortgagor, but to protect his claim against third parties, e.g., a bona fide purchaser for value. D) A conditional seller can assign the conditional sale contract to a finance company without the consent of the conditional buyer. E) These transactions are now governed by the Personal Property Security Act.

There is no longer

Mr. Buyer, the plaintiff in the action, was attempting to enforce a contract in which the defendant, Mr. Seller agreed to sell to buyer his property, Blackacre, for $100,000. Which of the following, by itself, would be sufficient to allow Mr. Seller to get out of the contract? A) At the time of the contract, unknown to Mr. Buyer, Mr. Seller did not understand the quality and nature of this act because of mental incapacity. B) Mr. Buyer referred to essential terms in a letter sent to Mr. Seller. C) There was only a verbal agreement between Mr. Seller and Mr. Buyer. D) Although both parties agreed to this, there had not actually been any money paid on the contract, not even a deposit or a down payment. E) The $100,000 was not enough, not fair.

There was only a verbal

Which of the following is an unfair labour practice? A) An employee is required to join a union as a condition of employment. B) An employer pays higher wages as part of his annual wage increase, as a union is trying to organize his employees. C) An employer threatens to have an employee fired if he joins a union. D) A union representative has a conversation with an employee about joining the union. E) An employer starts another unrelated business that is non-union, as a union tries to organize his employees at the present location.

Threatens

Which of the following is an example of duress? A) Joe, knowing of Harry's financial situation, refuses to sell him his car. B) Joe counteroffers Harry's original offer. C) Joe wants to purchase Smith's car from him, and Smith sells it to someone else. D) Joe threatens to smash Harry's car if Harry won't sell it to him. E) Joe refuses to sell Harry his car unless Harry offers him more money.

Threatens to smash

If an offer is made by mail and an acceptance by mail is requested, when does a letter revoking the previous offer actually take effect? A) At the time that it is posted B) Never. A revocation must be done in person. C) At any time before actual performance of the contract has begun D) At the time that it is received, if before acceptance E) At any time before a letter of acceptance is received by the offeror

Time it is received

Which of the following statements regarding the securing of debt is true? A) To avoid problems related to consideration, lending institutions often require that guarantees be placed under seal. B) The term guarantee, otherwise known as an indemnity, refers to a primary debt obligation. C) In every province, there is now a requirement that a guarantor appear before a notary public. D) As guarantees are mere formalities, there is little point in getting legal advice prior to executing one. E) Because of the principle of caveat emptor, a creditor has no obligation to protect the interests of a guarantor.

To avoid problems related

Which of the following is incorrect with respect to the law of incapacity? A) Married women are no longer incapacitated. B) Trade unions may have limited capacity to contract. C) Even after the passage of the Charter of Rights and Freedoms, some contracts entered into with status Indians cannot be enforced. D) To escape a contract on the basis of insanity, the insane person need only show that he did not know what he was doing at the time the contract was formed. E) Some Crown corporations have limited capacity to contract.

To escape a contract

The objective, in Canada, of the Uniform Electronic Commerce Act (UECA) is primarily: A) To make electronic documents and signatures as binding on parties as written ones. B) To restrict internet gambling C) To provide a series of remedies for internet commerce retail abuses primarily from "offshore" enterprises D) To define what constitutes a violation of privacy E) To restrict internet pornography.

To make electronic documents

Naxon opened a retail computer shop which he called Computer Haven Ltd. He used colours and signs similar to those used by Computerheaven Ltd., a very successful computer store three miles away. After Naxon was in business for about five months, the directors of Computerheaven Ltd.noticed that their sales had dropped. On these facts, which of the following is true? A) Computerheaven could successfully sue Naxon for the tort of innuendo. B) Computerheaven could successfully sue Naxon for breach of contract. C) Computerheaven could successfully sue Naxon for the tort of injurious falsehood. D) Computerheaven has no cause of action against Naxon because ours is a free society and competition in all forms is encouraged by our political and legal system. E) Computerheaven could successfully sue Naxon for the tort of passing off if it can prove that the name, signs, and colours used by Naxon were likely to mislead the public.

Tort of passing off

Which of the following is not a federal statute with a consumer protection aspect? A) Textile Labelling Act B) Consumer Package and Labelling Act C) Trade Secrets Act D) Competition Act E) Precious Metals Marketing Act

Trade Secrets Act

Which of the following is true with regard to employment law? A) Employees are allowed to strike only when the employer refuses to honour the collective agreement (a rights dispute). B) A "lockout" is action taken by the employees to prevent employer from operating as normal. C) If a worker is injured on the job, he can sue the employer for any injuries he may have suffered. D) "Constructive dismissal" refers to a breach of the employment contract by the employer in which the employer has discovered the employee had committed theft. E) The traditional test for determining whether or not a person is an employee is to assess the degree of control; an employee could be told not only what to do but how to do it.

Traditional test

Which one of the following actions by a debtor constitutes an act of bankruptcy? A) Generally meeting liabilities as they become due B) Assignment of liabilities to a trustee C) A fraudulent conveyance of liabilities to one of the creditors D) A fraudulent transfer of money or assets E) Having more debts than assets

Transfer of money

Which of the following is not a common internet or computer-related offence? A) Gambling B) Distribution of pornography C) Trespass D) Computer piracy E) Hate literature and other human rights violations

Trespass

Four students assigned to examine the operations of Mr. Triffle's restaurant supply company found that the business worked in an inefficient manner. On the students' recommendation, Triffle went to Computerheaven Ltd. and explained to the salesperson the needs of the company. Computerheaven sold the company an Olivetti computer system for $18,000. The system was in operation less than one hour when it malfunctioned and injured one of Triffle's employees. The malfunction was not the fault of the seller or the buyer, but of the manufacturer. Which one of the following actions arise from these facts? A) Triffle's company vs. Computerheaven for breach of a warranty because the system was not of merchantable quality B) Triffle's company vs. the manufacturer for frustration. C) Triffle's company vs. Computerheaven for breach of a condition because the system was not fit for purpose D) Triffle's employee vs. Triffle Company for breach of condition. E) Triffle's employee vs. Computerheaven for negligence.

Triffle's company vs. Computerheaven for breach of a condition

Which one of the following mistakes voids a contract? A) Sally and Mary had a serious misunderstanding about a term in the contract; the court found that the more reasonable interpretation was that of Sally. B) Two parties contract for a shipload of coal, but unknown to both parties, at the time of the contract the ship had sunk and the coal had been lost. C) When Mr. and Mrs. Houston put their property up for sale, Sam without speaking to the Houstons or their agent about the land, offered close to the asking price because he thought it was suitable for growing wheat. After his offer was accepted, he learned it was not suitable for wheat. D) Sam bought three gallons of paint, but found he had made a mistake; two would have been sufficient. E) Two parties contracted for the sale and purchase of a painting for the price of $800. When the contract was written up, the price was incorrectly stated as $900.

Two parties contract for a shipload of coal

Laura is concerned that her e-mails may be read by third parties and that her Internet "surfing" is being tracked by businesses hoping to use the information to inundate her with unsolicited e-mail advertising. She is also convinced that embedded software devices on her computer give others the ability to access her private information. Her friends think she is just being paranoid. Which of the following is true in respect of privacy on the Internet? A) Unauthorized interception of communications between individuals is now a criminal offence in Canada. B) While unencrypted data is susceptible to unauthorized access, encryption of information communicated online provides a guarantee of security. C) Now that privacy rights are legally protected, Internet users should feel secure in giving out private information online. D) Although privacy laws are being enacted as precautionary measures, voluntary protection of privacy has proven overwhelmingly successful. E) Every Canadian province is governed by the provisions of the federal Personal Information Protection and Electronic Documents Act.

Unauthorized interception of communications

It came to your attention that your great-grandmother had signed a contract pursuant to which she would be paying $5,000 for an electronic organ that retails in reputable stores for $3,000.Furthermore, the interest being charged is 18%, even though today's rate fell to a 20- year low. This debt is totally out of line with her pension income. It is apparent that she was misled by the door-to-door salesman who came to her place. On these facts, which of the following laws is the most likely to help her? A) Misrepresentation only B) Non est factum C) Unconscionability only D) Both unconscionability and misrepresentation E) Undue influence only

Unconscionability and misrepresentation

Zlotnik incorporated a company shortly after graduation. The company bought a truck and a computer. Short of operating capital, the company, through its agent Zlotnik, borrowed $10,000 from the bank. In consideration for its loan, the bank took, in addition to the company's promise to pay the bank both principal and interest, a mortgage of its truck and computer. The company made its payment each month without incident. For reasons still unknown, the stock market took a tremendous fall, which caused the officer of the bank to call Zlotnik and ask him to guarantee the company's debt. The company was doing very well, so Zlotnik agreed to be guarantor of the debt. His oral assurances were sufficient for the bank officer. On these facts, which of the following is true? A) Zlotnik's promise to guarantee the debt is unenforceable because it is not supported by any consideration flowing from the bank to Zlotnik. B) All guarantees and indemnities must be in writing and under seal to be binding. C) Zlotnik's promise to guarantee the debt is void because the guarantee itself is not in writing. D) Zlotnik's promise to guarantee the debt is enforceable wholly on the grounds that the Statute of Frauds with its writing requirement has been repealed. E) Because Zlotnik's promise is a guarantee and not an indemnity, he automatically becomes the legal person primarily liable on the debt; the company becomes secondarily liable.

Unenforceable; flowing from the bank

Mr. Copperfield, a collector of movie memorabilia, bid $50,000 on the Batmobile. After taking delivery, he discovered the car was not the car actually used in the film "Batman," it was merely one of five cars used to promote the film. He is suing the seller, Mr. Eisenberg. In which of the following cases would Mr. Copperfield not be entitled to a remedy? (Assume that in each case the facts could be proven.) A) Innocent misrepresentation by Mr. Eisenberg B) Negligent misrepresentation by Mr. Eisenberg C) Breach of contract by Mr. Eisenberg D) Fraudulent misrepresentation by Mr. Eisenberg E) Unilateral mistake by Mr. Copperfield

Unilateral mistake

A contract is terminated by agreement in which of the following situations: A) Frustration B) A written statement by one party to cancel an accepted order C) Unilateral release D) The occurrence of a condition subsequent E) Breach

Unilateral release

The court may hold that a contract is "void," "voidable," "unenforceable," or "illegal." Which of the following is true with regard to these terms and the court's use of them? A) "Void" is the same as "unenforceable." B) If a contract is held to be illegal, the plaintiff will get some help, because the court will try to put the parties back to their original position. C) If a contract is held to be void, it was a contract, but for some reason, one party can end it. D) If a contract is held to be void, it never was a contract. E) If a contract is unenforceable, it means it doesn't exist.

Void = never was a contract

When the courts find that undue influence is present, the resulting contract is A) void. B) illegal. C) binding. D) voidable. E) unenforceable.

Voidable

Bruce was a union representative working for Ace Manufacturing Co. The union and management had just concluded a collective agreement that set out terms under which certain functions of the plant would be computerized. A few months after the agreement was signed, the management started installing the computers, and in the process laid off three people who were no longer required. This in fact was exactly what Bruce had taken great care to prevent by the provisions that were included in the collective agreement. The management was in clear violation of these terms. Bruce called the members of the union out on strike and set up a picket line that effectively shut down the plant. Which of the following is true with regard to the legal position of the parties? A) The picket line has the legal right to physically block people from the plant if they are not persuaded to turn back. B) If the workers disagreed with the layoffs, management could lock them out. C) In this type of dispute, the workers can slow down and disrupt production, but they can't walk off the job. D) The management was in the wrong and would be unsuccessful in getting an injunction to stop the strike and picketing. E) The union was right in objecting to the layoffs, but it should have followed the grievance procedures in the collective agreement. Their strike is illegal.

Union was right

With regards to the National Do Not Call List registry (National DNCL), which of the following statements is true A) The registry enables consumers to reduce the number of unsolicited calls they receive by making a single registration. B) The registry requires telemarketers to operate and maintain the national DNCL. C) The registry enables consumers to reduce the number of unsolicited pop-up ads they receive by making a single registration. D) The registry enables consumers to reduce the number of unsolicited bulk email they receive by making a single registration. E) The registry requires consumers to register only once to avoid all future unsolicited calls.

Unsolicited calls they receive

Identify which of the following statements is true about secured transactions in provinces not having a personal property security act. A) This kind of transaction, which formerly was legal, is now prohibited by law in all provinces. B) All kinds of security arrangements involving personal property as collateral now come under one statute. C) Only tangible personal property can be used as security. D) An assignment of an account receivable does not qualify as a security arrangement because no tangible property is involved. E) Various kinds of secured transactions, such as conditional sales, chattel mortgages, etc., are regulated by their own distinct statutes.

Various kinds of secured

Which one of the following is true with respect to the builder's lien acts? A) If a lien claimant files his lien within the time set, he can be assured that he will collect the full amount of his claim. B) A lien claimant owed money by a general contractor can choose to pursue either the general contractor or the property owner for the full amount of the claim. C) Compliance with the statutory holdback provisions is required, but gives an owner no protection against potential lien claims. D) Various provincial statutes give suppliers of work and materials a claim for payment against the land enhanced by their services. E) If a lien claimant loses the right to file a lien, he also loses the right to sue for breach of contract.

Various provincial statutes

With regard to guarantees, which of the following is false? A) A guarantor can use any defence against the creditor that the debtor could use. B) A legally binding promise to be primarily responsible for someone else's obligation is an indemnity. C) A verbal guarantee is as enforceable as a written one. D) A legally enforceable guarantee must satisfy all the elements required to create a binding contract. E) Subrogation can result in a guarantor's being able to sue successfully the very debtor whose obligation he guaranteed.

Verbal guarantee

Which of the following is not an advantage of incorporation? A) There may be tax advantages. B) Shareholders can veto decisions of directors. C) Shareholders are not liable for debts of the corporation. D) Shares are easily transferred. E) Shareholders owe no duty to the corporation.

Veto

Jack Kihn incorporated and put $20,000 into the corporation by way of a shareholder's loan and took back a chattel mortgage on the corporation's equipment. The corporation created decorative boxes. An employee of the company delivered some boxes to a customer who complained about the colour used. The employee became so angry that he shoved the customer, who fell into a glass display case, causing $30,000 damage to the customer and the case. On these facts, which of the following is false? A) If the corporation went bankrupt, Kihn himself would be a secured creditor. B) Kihn himself is vicariously liable for the damage caused by the employee. C) The employee is liable for his tort and his employer is also liable. D) Although Kihn is the sole shareholder of the corporation, he is not responsible for company debts. E) The employee is liable for the tort of battery.

Vicariously liable

Which of the following complaints would lead to a successful action under the Sale of Goods Act? A) "I hired you to wait tables, not to stand around doing stand-up comedy routines." B) "You are not going to honour our contract for the land?! I planned to build on that lot in the spring!" C) "Waiter, there's a spider in my sandwich." D) "I left the car here with orders to adjust the front lights; I did not order a tune- up!" E) "I paid $1000 for government bonds, but you have sent me shares in a private company that I never heard of!"

Waiter

Which of the following is a statement of facts to which the Sale of Goods Act would apply? A) "I ask for a trim! You've cut off 5 inches!!!" B) "I agreed to give you a dozen old campaign buttons for that original signature of the Prime Minister, but received the signature of the Governor General." C) "Waiter, there is a dead fly in my spaghetti." D) "Today is the closing date and I am willing to tender the full price in cash, namely $70,000, for the farm, and you are now telling me that you have no intention of closing." E) "I brought in five shirts to be laundered and you are returning only four to me!"

Waiter

Which one of the following statements about the compensation insurance scheme under the Workers' Compensation Act is false? A) When a worker is injured on the job through the fault of someone other than his employer, he cannot claim under the Workers' Compensation provisions. B) Legislation sets rates of compensation to be paid for different types of injuries. C) Employers pay different premiums depending on the nature and danger of the industry. D) If the injury is caused by the worker's own careless conduct, he will still receive compensation under the Act. E) Businesses covered by the Act are required to contribute to a no-fault fund that is used to pay for job-related accidents and diseases.

When a worker is injured

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) Registration of domain name precludes someone from registering a trademark. C) Where trademarks are infringed, it will be no defence to show one registered a domain name. D) A business is entitled to its own unique domain name regardless of trademark law. E) The Canadian Internet Registration Authority determines whether a domain name constitutes trademark infringement.

When trademarks are infringed

Which one of the following statements is false with respect to who bears the risk of loss in a sale-of-goods contract? A) When unascertained or future goods are involved, the risk transfers once a reasonable time has passed. B) The parties can contradict the provisions of the Sale of Goods Act on this question. C) The risk of specific goods may pass upon formation of the contract. D) Where repairs have to be done before delivery, the risk passes when the repairs are made and notice given. E) The risk of loss may depend on who holds title.

When unascertained or future goods

Which of the following is true with regard to the implied terms of the Sale of Goods Act? A) The Act does not provide that the goods must be fit for purpose. B) When you buy a car, and the contract speaks only of the car and the price, you are entitled to receive good title, to acquire quiet possession and a car free from any encumbrances (i.e., a claim by a bank). C) If you ordered a lamp from a catalogue but it did not match the description when you got it, the seller is in breach of a warranty of the contract. D) If a buyer places an order for silk after seeing a sample of it, the order delivered must be delivered within 10 days. E) The Act provides that the goods must be of "merchantable quality," and that means that the goods must be without flaw.

When you buy a car

Jones did work for Smith, who agreed to pay him in advance by cheque. Smith prepared a cheque for Jones. In which of the following situations would Smith have to honour the cheque to Green after it had been transferred to her by Jones? A) Where Green and Jones had worked together in a scheme to cheat Smith. B) Where Green operated a finance company and, while not knowing Jones but recognizing Smith's signature and knowing his good reputation, had given Jones $400 for the $500 cheque. C) Where Jones had changed the $500 to read $5000 by adding a zero and rubbing out the word hundred and writing thousand over it. The alteration was clearly visible on the cheque. D) Where Green knew that Jones had taken the completed cheque from Smith's desk while Smith was out to lunch. E) Where Green was Jones's girlfriend who had been given the note as a gift. Jones had not yet started the job.

Where Green operated a finance company

Which of the following statements is correct with respect to a contract for the purchase of goods? A) Where a breach of a condition is involved, the contract is still in force and the victim of the breach must still perform her side of the agreement. B) The purpose of the inclusion of a warranty in a sale of goods contract is to force the seller of those goods to repair the goods if they are defective. C) Where a breach of a warranty is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement. D) Where a breach of a condition is involved, the obligation of the victim of the breach is ended and that person need not perform her side of the agreement. E) The purchaser has a claim against the manufacturer only if the goods purchased are defective.

Where a breach of condition is involved, obligation of the victim

Which of the following statements accurately state the law with respect to consumer transactions? A) Where a consumer has been subject to a deceptive or unconscionable act or practice, he may recover damages and an order of rescission. B) Where the court decides that a transaction was unconscionable, that transaction is unenforceable by the buyer. C) A deceptive or unconscionable supplier does not lose his right to carry on business in the province. D) In all consumer transactions, there is a cooling-off period of seven days in which the consumer can call off the deal. E) Where a supplier engages in a deceptive or unconscionable act, he is neither subject to fines nor jail.

Where a consumer has been subject

With regard to the law governing privity of contract and assignment, which of the following is true? A) An equitable assignment is easier to enforce than a statutory assignment. B) Novation refers to the voiding of the original contract and substituting another. C) If a promisor (debtor) accidentally pays out to the assignor after receiving notice of the assignment, he is free from any obligation to the assignee; the assignee must look to the assignor for payment. D) An exception to the doctrine of privity of contract is a contract selling a car. E) Where the assignor assigns the same debt to two or more persons, if the promisor (debtor) pays out, in good faith, to the first assignee to give him notice, he has no further obligation.

Where the assignor assigns

Identify the true statement concerning the law of principal and agent. A) 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. B) Agency is only created by way of a contract. C) An agent can never be liable to the third party himself while the principal will bear no such liability. D) The principal and his agent owe each other the same duties. E) An agent with no express authority can never bind his principal into a contract with a third party.

Who puts himself

With regard to liability of partners, which of the following is true? A) A general partner could not be liable for losses suffered by a client because of misapplication of funds unless he knew about or took part in the misapplication. B) A limited partner has unlimited liability beyond the amount of his initial investment. C) A general partner has limited liability for any loss suffered because of the negligent act (e.g. omission) of one of his partners. D) A general partner who retires from the partnership by giving notice of his leaving to the other partners could still be found liable for debt pursuant to a contract made when he was a partner. E) The partnership, and thus the partners, are liable for any loss suffered because of a tort committed by its employee outside the course of his employment.

Who retires from

Mr. and Mrs. H were induced to sign a mortgage in favour of M Co. Ltd. by Johnston, a man living with their daughter. Johnston led them to believe that the document was an unimportant amendment to an existing mortgage, when in reality, it was a second substantial mortgage of their home. Neither read the document nor questioned it. When the payments were in arrears, the mortgagee took an action for foreclosure (to take their home). Which of the following is correct with respect to the legal position of the parties? A) They will likely have to honour the mortgage contract even though they didn't read it. B) If Mr. and Mrs. H can show they didn't read the document, they will not have to honour the mortgage contract. C) If the court finds that this is an example of undue influence by Johnston, Mr. and Mrs. H will not have to honour the mortgage. D) If the court finds that this is an example of duress by Johnston, Mr. and Mrs. H will not have to honour the mortgage. E) If the court finds that Johnston has committed a fraudulent misrepresentation, Mr. and Mrs. H will not have to honour the mortgage.

Will likely have to honour the mortgage

A purchase money security interest A) is prohibited in most provinces. B) will be automatically subordinate to any general security agreement, even if registered within the specified time period. C) will prevail over a general security agreement covering all of a merchant's assets, if it registered within the specified time period. D) is also known as floating charge. E) is now obsolete, in light of the Personal Property Security Act.

Will prevail

Able Company contracted to sell to Baker Company 400 barrels of chemical C for $1,200. Able Company assigned the entire $1,200 in writing to Mr. Long, who sent a letter informing BakerCompany of the assignment and directing Baker Company to forward money to him instead of Able Company. Unbeknown to both companies, at the time of the contract the ship carrying the chemical had sunk and all cargo was lost. Which of the following is true? A) Mr. Long will receive nothing from Baker Company because nothing is owed to Able company. B) Mr. Long will receive part payment. C) The assignment to Mr. Long would fail to be a statutory assignment. D) Since Able Company has breached the contract, they pay compensation for the damages of both Baker Company and Mr. Long. E) Mr. Long, the assignee, will receive $1,200 from Baker Company.

Will receive nothing

In which of the following will the title to the goods pass to the buyer at the time of contract? A) Mrs. Jones calls the Bay and asks them to send out the blanket advertised on p. 3 of its flyer. The Bay agrees and takes her credit card number. B) While at the Bay, Preston decides to buy the style of sofa he sees on display. He pays by cash and the store arranges to have one sent from its warehouse directly to Preston's home. C) ABC Co. buys all the chemicals contained in a drum marked "A" but the price has to be ascertained by measuring the number of litres in the drum. D) Williams contracts for the desk he selected at Antiques Unlimited, and he arranges to have it delivered to his office tomorrow and to be paid for in one month. E) Mary picks out a leather briefcase and leaves it with the seller so that initials can be engraved on it. She pays by cheque.

Williams contracts

The Bankruptcy and Insolvency Act allows a supplier of goods to recover those goods even after they are delivered to the purchaser if A) within 7 days of delivery, the debtor has become bankrupt or a receiver has been appointed, even if the goods have been transferred to a third party. B) within 30 days of delivery, the debtor has become bankrupt or a receiver has been appointed, provided the debtor or trustee still has them. C) within 6 months of delivery, the debtor has become insolvent, provided the debtor or trustee still has them. D) within 6 months of delivery, the debtor has become bankrupt or a receiver has been appointed, provided the debtor or trustee still has them. E) within 30 days of delivery, the debtor has become insolvent, provided the debtor or trustee still has them.

Within 30 days, the debtor has become bankrupt

Which of the following statements is correct with respect to the law of consideration? A) Without consideration or a seal, there can be no contract. B) For a contract to be binding something valuable must have changed hands. This consideration may have been paid before the agreement (past consideration) or at the time of the agreement (present consideration), but future consideration is no consideration. C) Consideration must have some value but need not be specific. D) The amount of consideration to be paid in a contract must be reasonable (that is, fair) from the point of view of each party. E) Consideration need not be specific, just so both parties got something out of the deal.

Without consideration or a seal

Which of the following are in no way incapacitated when entering into contracts? A) Mentally disabled B) Trade unions C) Status Indians D) Women E) Children

Women

Carson arranged with his brother-in-law, Waxman, that he would try to buy a famous old B.C. coastal airplane, the Spruce Ghost, which Waxman would then buy from him to display in his flight museum. Waxman promised to pay Carson a 10% commission over the price that Carson had to pay to buy the plane, so that their price would be 110% of Carson's purchase price. Carson and the owner, Wonka, agreed on a price of $80,000. After reconditioning the plane but before delivering it to Carson, Wonka decided to take it up for one last nostalgic flight and, because of his carelessness, he crashed it on take-off. Although Wonka escaped uninjured, the plane caught fire and was totally destroyed. Carson was able to locate a similar plane for only $60,000 but Waxman wasn't interested. Carson sued his brother-in-law and Wonka. What is the likely outcome of this suit? A) Waxman will have to pay Carson $8,000, the commission on the agreed sale price between Carson and Wonka. B) The Frustrated Contracts Act will require Carson to share in the expense of reconditioning the Spruce Ghost that Wonka had undertaken in preparation for sale. C) Wonka will have to pay Carson damages (probably $8,000) for breach of contract. D) Because the contract between Carson and Wonka was frustrated by the destruction of the Spruce Ghost, Carson has no claim against anyone. E) Waxman will have to pay Carson $6,000 as the commission he would have made on the purchase of the second plane.

Wonka will have to pay

Four days ago, Pete was reading the newspaper and saw the following: "Best offer in town! Zenith XX Laser Printer - $1,000! When he went to the store this afternoon and said he wanted one, they replied that they didn't have any left, nor could they get one. On these facts, which of the following is true? A) Pete could sue them for breach of contract because he was accepting the offer in the newspaper. B) The store had revoked the offer before he tried to accept. C) The wording in the newspaper was merely an invitation to the public to do business, and no contract was formed. D) Pete could sue for breach of an option contract. E) The offer by the store had lapsed before he tried to accept.

Wording in the newspaper

Which of the following could not be used as consideration? A) A promise to deliver three tons of steel B) 50 cents C) A promise to give up a legal right D) A kilogram of green beans E) Work that was done in the past

Work that was done in the past

For the purpose of building a playhouse for his sons, Andy went to Lumberlore Ltd. and bought, with his charge card and without talking to a salesperson, the following things: a drill, lumber, and a six-foot step ladder. While working on the project, Andy noted that the drill worked but it was not powerful enough to drill into the 4x4 inch posts the playhouse needed for support. When he went toward the house to get his car keys, he found his wife unconscious. She had used the ladder to take some leaves out of the gutter, and it buckled under her weight because of its faulty design. Which of the following is false? A) The sale of the items he bought is covered by the Sale of Goods Act although he used his charge card. B) Andy would have an action against Lumberlore, Ltd. for breach of a condition of the contract for the ladder because it wasn't of "merchantable quality." C) Andy would have an action against the seller for breach of a condition of the contract for the drill because it wasn't fit for his purpose. D) Title for the goods passed to Andy at the time of contract but that does not preclude him from his remedies. E) Andy's wife would have an action against the manufacturer of the ladder in tort.

Would have an action against Lumberlore

Mike contracted to buy Rita's house in a written contract that provided for a deposit of $10,000 to be forfeited in the event of Mike's failing to go through with the deal. This deposit was an honest estimate of the damages Rita would suffer. On these facts, which of the following is true? A) If Mike breaches the contract, he will have to pay Rita all the damages that directly and naturally flow from the breach. B) If the contract price agreed upon was $150,000 and Rita, after Mike breaches the contract, sells the house in one week for $138,000, she will still be able to recoup all her losses. C) A clause in a contract that provides for the forfeiture of a deposit is called an exemption clause. D) If Mike breaches the contract, he would not have to pay $10,000 even if Rita suffered a substantial loss. E) If Mike breaches the contract, he would have to pay $10,000 even if Rita's actual loss was $40,000.

Would have to pay $10,000

Which of the following situations gives rise to the application of the equitable remedy of rectification? A) The contract is one requiring "utmost good faith." B) Both parties to a contract agree that they want to change some of its terms and thus apply jointly to the court to have the relevant terms altered. C) A written instrument, because of an obvious mistake, does not embody the unchanged terms of an original oral agreement. D) The defendant has a justifiable defence of non est factum. E) The two parties to a contract have made a mutual mistake and one of these parties is asking the court to choose the more reasonable meaning of the terms in question.

Written instrument

Which of the following is not an example of a contract? A) A verbal agreement to work for someone starting next week B) An agreement not to sue someone for negligence in exchange for their promise to pay you a specified amount C) A written promise to give your husband a ring for Christmas D) An implied promise to pay for a meal when you order it E) A verbal agreement for the sale of a car where neither the money nor the car has yet changed hands

Written promise

The following events occurred before the goods or parts of the goods were lost or destroyed. In which case would the buyer suffer the loss? A) Yates chose which of the desks he wanted and contracted for it, but he had agreed to pay and pick it up the next day. B) Jaspers contracted for four standard-sized cupboards for the kitchen. The boards had been cut, but they had not been assembled. C) George ordered a Pentium computer system with 4 megabytes of RAM and a 105 megabyte hard drive advertised by Kicks Computers. D) Heinz contracted for all the corn in Silo A. The seller still had to weight the corn to determine the price. E) Al picked out and contracted for a particular computer, and an additional component had to be installed before it was in deliverable state. It was installed, but Al had not been notified that it was ready.

Yates