BLAW CH 8
8. It is possible to have several mortgages on the same property.
False
52. Which of the following is not protected under copyright law? a. computer programs b. architectural works c. trade secrets d. drawings
c. trade secrets
3. Different people may have different property rights in the same piece of property.
True
9. Most mortgage agreements include an acceleration clause that provides that full payment of the entire debt becomes due on default of a condition.
True
61. Briefly define "bailment" and list its two key features. What is its significance?
a. Bailment occurs when goods are borrowed, rented, stored, or found by a person other than the owner of the property. The owner is known as the bailor, and the person who is in temporary possession of the property — but who does not own it — is called the bailee. The two key features of bailment are: • the split between possession and ownership of goods, and • the intention that the situation is temporary.
66. Briefly describe two conditions precedent commonly found in agreements for purchase and sale of real property.
a. Conditional on financing: The agreement of purchase and sale may provide that the buyer is not required to complete the sale unless he is able to arrange a mortgage or other financing by a specified date. b. Conditional on zoning approval: The agreement of purchase and sale may provide that the buyer is not required to complete the sale unless she is able to obtain the zoning approval required to use the land in the manner intended.
63. List two steps a business can take to minimize the risk of liability with respect to bailment.
a. Ensure that all bailed goods are well maintained, safe, and in good repair. b. Describe the responsibilities of bailor and bailee in a written contract. c. Include disclaimer clauses where appropriate.
75. List two strategies that can be used to reduce the cost of insurance.
a. Partially self-insure by buying insurance for less than the full value of the item; b. Agree to a higher deductible to reduce the premiums; and c. Install smoke detectors and alarm systems to reduce the premiums you pay, and reduce the risk of harm.
58. List the three rights that are generally included in property ownership.
a. Right to possess and use property, b. Right to prevent others from possessing it, and c. Right to transfer property rights to others.
59. Briefly explain the difference between tangible and intangible property, and provide two examples of each.
a. Tangible property consists of things that are physical — that can be seen and touched. Examples include a factory, a stapler, a painting, and a farmer's field. b. Intangible property also has value, but its value does not arise from its physical attributes. Intangible property includes negotiable instruments, such as cheques, intellectual property, such as copyright and patents, and goodwill, which is a business's good reputation with its customers and others.
55. Which of the following is not a requirement for an invention to be patentable? a. The invention must be entirely new. b. The invention must not be obvious. c. The invention must function when put together according to the specifications submitted with the applications. d. The invention must not have been published by the applicant more than one year before the applicant submits the application.
a. The invention must be entirely new.
38. Jill forgets her phone in the fitting room of a clothing store. A store staff member finds the phone and turns it over to the store manager. This is a. a constructive bailment. b. a gratuitous bailment. c. a special bailment. d. not a bailment.
a. a constructive bailment.
47. A lease that exists for a specified period of time, at the end of which the landlord and tenant have no obligation to each other to continue the lease arrangement is called a. a fixed tenancy. b. a periodic tenancy. c. a defined tenancy. d. an agreed term tenancy.
a. a fixed tenancy.
39. In a gratuitous bailment a. only the bailor benefits from the bailment. b. only the bailee benefits from the bailment. c. either the bailor or the bailee benefits from the bailment. d. no payment is exchanged, so neither the bailor nor bailee benefits from the bailment.
a. only the bailor benefits from the bailment.
69. List two advantages of renting business premises over buying.
a. renting does not tie up capital, b. renting increases a business's flexibility to change locations, and c. renting may decrease maintenance responsibilities (depending on the terms of the lease).
50. Bob owns a valet car parking service. Which type of property-related insurance would be particularly important for Bob's business? a. Property loss b. Liability for property loss c. Occupier's liability d. Business interruption
b. Liability for property loss
40. In the process of purchasing a property, Simon discovers he is a victim of a fraudulent transfer. He may be able to receive compensation from the government if the transfer happened under which system? a. The land registry system. b. The land titles system. c. Caveat emptor is the ruling principle of both systems. The government provides no protections. d. Either. The government vouches for the title under both systems.
b. The land titles system.
41. A breach of which of the following would entitle the non-breaching party to sue the breaching party for damages? a. Conditional on no asbestos in buildings. b. Warranting no issues with roof on property. c. Conditional on zoning approval. d. Conditional on environmental audit.
b. Warranting no issues with roof on property.
42. Real property is legally transferred when a. the parties sign the agreement of purchase and sale. b. closing occurs. c. the deed is registered under the land titles system. d. the transfer form is filed under the land registry system.
b. closing occurs.
43. At the end of the mortgage term, a. the mortgagee can switch lenders. b. the mortgagor and the mortgagee must negotiate a new interest rate. c. the mortgagee takes clear title. d. the mortgagor has paid the debt in full.
b. the mortgagor and the mortgagee must negotiate a new interest rate.
48. The property that Tim leases for his business was recently destroyed by flooding. Under the common law a. the principle of frustration of contract applies and Tim is freed from his obligations to pay rent. b. Tim's obligation to pay rent resumes only when the premises has been restored to a usable condition. c. Tim's obligation to pay rent continues. d. Tim has the right of distress.
c. Tim's obligation to pay rent continues.
72. How are shopping centre leases complicated? What additional terms may be included, if any?
Shopping centre leases are complicated because they pertain to space that is shared among many tenants, such as space for parking, storage, and shipping, as well as public space for shoppers. The common interests of the tenants and landlord are reflected in the special obligations that they both assume under shopping centre leases. For example, a lease may require the landlord to promote the shopping centre with advertising. Tenants may be required to keep their stores open during specified business hours for the convenience of shoppers, which provides a benefit for all tenants.
57. In Canada, a business's trade secret a. is protected by legislation. b. is protected under PIPEDA. c. is protected when registered with the Canadian Intellectual Property Office. d. none of the above
d. none of the above
67. What is a "mortgage" and what is its purpose?
A mortgage is a loan secured by property; it gives the lender the right to sell the property, and recoup any loss, if the borrower fails to repay the loan. While the mortgage is in effect, the mortgagor keeps possession of the real property, and may make full use of it. Purchasers often obtain mortgages to finance the purchase of real property. Sometimes, however, property owners mortgage the property they already own as a method of raising funds for some other purpose.
76. What is the meaning of "public domain" and how is it significant?
Once copyright protection expires, a work is said to be "in the public domain." This means that the public is free to use it. Anyone may exercise the rights that were formerly exclusively held by the copyright owner. In general, unless the Copyright Act contains a specific provision to the contrary, a work becomes part of the public domain 50 years after the calendar year following the author's death.
70. Briefly explain what a "lease" is and list three commonly included terms.
The lease is the contract that sets out the rental terms that the parties have agreed to, such as the length of the lease, the amount of rent to be paid, the timing of rental payments, obligations of maintenance and repair, and restrictions on the tenant's use of the premises. When the lease comes to an end, the right of possession reverts to the landlord.
68. What are the mortgagor's obligations that must be met to avoid default of the mortgage?
The mortgagor's obligations included in all standard mortgage agreements are: • make the periodic mortgage payments (usually monthly or bi-weekly), • pay all property taxes, • insure the property against loss, and • make all repairs necessary to ensure that the property does not lose value (don't commit "waste").
53. Moral rights a. are rights that fall under copyright. b. can be assigned to whoever the creator designates. c. includes the right to remain anonymous. d. cannot be waived.
c. includes the right to remain anonymous.
56. Misrepresentation of a product or business by using a name or mark that is associated with another product or business is called a. plagiarism. b. infringement. c. passing off. d. breaching a restrictive covenant.
c. passing off.
44. When a mortgagee seeks an order of possession, it may then obtain relief by a. suing the mortgagor for payment of debt. b. relying on the acceleration clause in the mortgage agreement for full payment of the entire debt. c. selling the property in a judicial sale action. d. registering their mortgage to preserve their position in the priority sequence.
c. selling the property in a judicial sale action.
37. Sandra leaves her broken car with Jim to fix and pays him for the repairs. a. Sandra is the bailor and Jim is the bailee in this gratuitous bailment. b. Jim is the bailor and Sandra is the bailee in this special bailment. c. Sandra is the bailee and Jim is the bailor in this lucrative bailment. d. Jim is the bailee and Sandra is the bailor in this lucrative bailment.
d. Jim is the bailee and Sandra is the bailor in this lucrative bailment.
46. Exclusive possession of the property refers to a. the ownership rights in land where the owner can do what they desire. b. the landlord's ownership of the property. c. a person's ability to retain an interest in the property while being in possession of the property for the duration of their lifetime. d. a tenant's entitlement to exclude all others from the property.
d. a tenant's entitlement to exclude all others from the property.
51. An interest that causes you to benefit from the existence of the property and to suffer from its loss is called a. an ownership interest. b. a fee simple. c. an easement. d. an insurable interest.
d. an insurable interest.
36. Which of the following is not an example of personal property? a. goodwill b. promissory note c. machinery d. lighting fixtures
d. lighting fixtures
45. In an action of foreclosure, the mortgagor may a. remain indebted to the mortgagee. b. be liable for any shortfall after the sale of the property. c. be entitled to any remaining proceeds from the sale of the property after the entire debt has been satisfied. d. none of the above
d. none of the above
54. According to patent law in Canada, a. an invention is automatically protected when it is created. b. registration of the invention minimizes the risk of infringement, but unregistered inventions are protected. c. there is no cut off time for protection. d. none of the above
d. none of the above
49. A tenant is entitled to use the property for its intended purpose, without interference from the landlord or others that are under the control of the landlord. This is called a. exclusive possession. b. quiet possession. c. exclusive enjoyment d. quiet enjoyment.
d. quiet enjoyment.
64. What is "fee simple?" How is it different than ownership?
"Fee simple" is an interest in real property, which provides rights that are similar to ownership. These rights include the right to possess the real property, exclude others from it, use it, build on it, sell it, give it away, and transfer it by will. However, the government retains the right to expropriate, or take land away, from private owners without their consent, providing them with monetary compensation. The government may also impose taxes on property owners, and an owner's failure to pay may result in the loss of his property to the government. The government also has the right to limit how an owner uses his land by imposing zoning bylaws, and on how an owner exploits his land through activities such as mining or forestry.
10. The law governing commercial tenancies is substantially similar to the law governing residential tenancies.
False
14. The amount of rent owed by a subtenant is no more than the amount specified in the lease between the landlord and tenant.
False
15. A licence is an interest in real property based in contract.
False
17. All losses are generally covered by standard insurance policies unless specifically excluded.
False
25. Intellectual property rights belong to the creator, while rights to the physical objects, such as CDs and pharmaceuticals, belong to the business.
False
27. Moral rights may be assigned or waived by the creator.
False
4. A constructive bailment occurs when a subcontractor has not been paid for work done on a property, according to the terms of the contract.
False
7. Like any contract, an agreement for purchase and sale of real property may be negotiated to suit the needs of the parties, and need not be in writing.
False
71. Briefly explain the difference between a fixed tenancy and a periodic tenancy.
In a fixed tenancy, a lease exists for a fixed term, such as 1 year, 5 years, or even 99 years. At the end of the term, the landlord and tenant have no obligation to each other to continue the lease arrangement. They may part ways without legal consequence. In a periodic tenancy, the lease does not specify a rental term or a termination date. Instead, the lease continues to operate indefinitely, unless one of the parties gives notice to the other of its wish to terminate the lease. Fixed tenancies may become periodic tenancies if, after the termination date, the tenant continues paying rent and the landlord continues to collect it.
60. Briefly explain the difference between chattels and choses in action, and provide two examples of each.
Personal property includes chattels, choses in action, and intellectual property. Chattels are moveable items of property, or goods — distinct from land, buildings, and the fixtures attached to land and buildings. Your stapler, the paper you staple together, your pens and pencils, and the computer you use in your office are all chattels. They can be picked up and taken from one place to another. Choses in action are negotiable instruments, such as cheques, money orders, and promissory notes.
65. Briefly describe the two systems for transferring the ownership of real property. Which system is preferable and why?
The two systems for transferring the ownership of real property are the traditional land registry system and the more modern land titles system. The land registry system requires buyers to search records of past transfers of the property to ensure that title, or ownership, has been uninterrupted. By contrast, under the land titles system, the government vouches for the title. Therefore, if there is a problem — such as a fraudulent transfer — purchasers who were unaware of the fraud may receive compensation from the government. The land titles system provides greater certainty for buyers and is much faster and cheaper.
74. What is an "insurable interest" and what is its significance?
To obtain insurance for property, you must have an insurable interest in that property — that is, an interest that causes you to benefit from the existence of the property and to suffer from its loss. This means that you cannot be the beneficiary of insurance for property that you have no interest in, even if you pay the premiums. Nor can you insure property for more than its market value. In a bailment situation, where more than one party has an interest, the parties may wish to include a term in their contract that assigns the responsibility for obtaining insurance to one party or the other.
1. Public property is owned by the government.
True
11. The amount of rent payable under most commercial and industrial leases is determined on the basis of the square footage/square meterage of the space leased.
True
12. Rent abatement is a reduction in the amount of rent payable.
True
13. Tenants have the right to sublet the premises unless the lease states otherwise.
True
16. An insurance policy is a contract that describes the types of losses covered as well as the reasons why the insurer may deny coverage.
True
2. Property law affects all businesses that own or deal in property by defining the risks assumed by the ownership or possession of property.
True
26. The Copyright Act protects a broad range of works including recorded music and computer programs.
True
28. Patent law encourages the investment in research and development necessary to pursue ideas, innovate, and invent.
True
29. Patent law protects inventors by preventing others from manufacturing, using, or selling the inventions without the permission of the patent holder.
True
30. A patent is protected for 20 years from the day on which the patent application is filed.
True
31. A patent right is infringed when anyone produces, uses, or sells a patented invention without the permission of the patent holder.
True
32. The tort of passing off provides protection for trade-marks and does not require registration of the trademark.
True
33. A registered industrial design is protected for 10 years only.
True
34. Integrated circuit topography involves the design of microchips, and to protect topographies they must be registered.
True
35. Confidential information is a type of trade secret.
True
5. In most cases of lucrative bailment there is a contract that dictates liability, so the common-law bailment rules rarely arise.
True
6. A business that pays for real property without a clear chain of title may, in fact, be paying for nothing.
True