BLAW Final Chapters (8)
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.
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
Define confidential information and provide two examples.
Confidential information is information that a business does not want its competitors to have and that it takes steps to protect. The value of confidential information is dependent — at least in part — on it remaining confidential. Examples include supplier pricing, customer names, accounts receivable, and advertising slogans before they are launched.
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
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
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
Moral rights may be assigned or waived by the creator.
False
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.
What does industrial design law protect?
Industrial design law protects the visual appearance of a product, including its shape, patterns, and ornaments. The law that governs industrial design fills a gap left by copyright law, which does not generally cover mass-produced goods, such as lamps and lawnmowers. The Industrial Design Act offers creators of massed-produced goods an opportunity to protect their designs from use by others.
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.
A business that pays for real property without a clear chain of title may, in fact, be paying for nothing.
True
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.
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.
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).
List the three elements required to prove the tort of passing off
a. use of the trademark for sufficient time to demonstrate a market association between the mark and your product or business; b. confusion between your trademark and the use of it by a competitor, or misrepresentation by your competitor in connection with your trademark; and c. damage to your reputation or a loss of sales.
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
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
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.
Identify and briefly describe two types of trademarks referenced in the Trade-marks Act. Provide an example for each.
A. Ordinary or classic marks: Trademarks may include the names of products, product lines, businesses, and slogans. The key feature of this, and every other trademark, is that the name or slogan must distinguish the product or business from its competitors. Generally used descriptive words, such as "fast" or "fresh," may not be accepted. However, if such a word has become associated, over time, with a certain product or business, registration may be possible. A business or trade name can have great value to a business by linking the business's reputation with the quality of its goods or services. Trademark law protects business names, provided that they are used to identify wares or services. For example, a business name such as Sony is protected because it is used in this manner as a trademark. b. Service marks: Service marks protect services rather than products. Service industries are numerous and include banking, insurance, transportation, and restaurants, and professional services such as legal, accounting, and engineering. Service industries generally do not have a product or packaging to mark with a brand name, however, they can advertise using a slogan, and if this slogan is associated with the services it can be registered as a trademark. c. Distinguishing guise: The appearance, shape, colour, and packaging of a product can be characterized as a trademark if these attributes distinguish the product from that of a competitor. Examples of distinguishing guise include a bell-shaped bottle of scotch, gold foil-wrapped chocolates, or pink insulation. d. Certification marks: This type of mark labels a product or service as having met a particular standard, be it the safety or quality of the goods, the place where the goods were produced, or the working conditions of the workers who made them. For example, a product approved by the Canadian Standards Association may be labelled as such. Unions may also permit the labelling of products to indicate that they were produced by unionized labour only. Similarly, certification marks may be used by franchisors to label the products sold by franchisees.
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
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
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
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
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
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.
C
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
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
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
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
Which of the following is not protected under copyright law? a. computer programs b. architectural works c. trade secrets d. drawings
C
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
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
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
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
Which of the following is not an example of personal property? a. goodwill b. promissory note c. machinery d. lighting fixtures
D
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
A licence is an interest in real property based in contract.
False
All losses are generally covered by standard insurance policies unless specifically excluded.
False
Intellectual property rights belong to the creator, while rights to the physical objects, such as CDs and pharmaceuticals, belong to the business.
False
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
The amount of rent owed by a subtenant is no more than the amount specified in the lease between the landlord and tenant.
False
The law governing commercial tenancies is substantially similar to the law governing residential tenancies.
False
Briefly explain the difference between the "amortization period" and "mortgage term."
Like most loan payments, mortgage payments consist of a combination of principal (the amount of money loaned) and interest. The amortization period is the length of time it will take to pay off the debt entirely, based on the regular payment of a fixed amount. The amortization period is usually long — 20 years perhaps. However, the mortgage term is considerably shorter, usually between 1 and 5 years. The agreed-upon interest rate applies only during the term of the mortgage. At the end of the term, the mortgagor and the mortgagee must negotiate a new interest rate. Once the debt is paid in full — at the end of the amortization period — the mortgagor takes clear title.
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.
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.
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. Also reflective of the parties' shared interest in the shopping centre's success is the fact that rental payments are usually arranged so that the landlord shares in the profits of the tenants. The lease may require a minimum monthly rental payment, but it also usually requires the tenant to pay the landlord a percentage of gross sales.
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.
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").
How is confidential information protected?
To be protected, confidential information must be kept confidential — it loses its status if it is made readily available to the public or to competitors. There are common law principles that prevent employees from revealing confidential information; however, businesses that are concerned about confidentiality should protect themselves with contracts. Many businesses have confidentiality clauses in employment contracts and in contracts with external organizations or independent contractors, such as advertising agencies or management consultants.
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.
In what way is the purpose of protecting trademarks different from the purpose of protecting other intellectual property?
Trademark law does not protect creativity so much as it protects marketing and advertising clout. Trademark rights have more to do with who uses a trademark, and how this leads to brand identification, than with who creates the trademark. Unlike the purpose of other types of intellectual property law, the primary purpose of trademark law is to facilitate commerce, not to promote innovation.
What does trademark law protect? Provide two examples.
Trademark law protects the words, symbols, and pictures that are associated with a business's name, brand, or product. It protects the trademark owner's name, its brand recognition, and the reputation that accompanies its name and brand recognition. Examples include slogans, distinctive colour and design of packaging, logos, and symbols.
A patent is protected for 20 years from the day on which the patent application is filed.
True
A patent right is infringed when anyone produces, uses, or sells a patented invention without the permission of the patent holder.
True
A registered industrial design is protected for 10 years only.
True
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
Confidential information is a type of trade secret.
True
Different people may have different property rights in the same piece of property.
True
In most cases of lucrative bailment there is a contract that dictates liability, so the common-law bailment rules rarely arise.
True
Integrated circuit topography involves the design of microchips, and to protect topographies they must be registered.
True
It is possible to have several mortgages on the same property.
True
Most mortgage agreements include an acceleration clause that provides that full payment of the entire debt becomes due on default of a condition.
True
Patent law encourages the investment in research and development necessary to pursue ideas, innovate, and invent.
True
Patent law protects inventors by preventing others from manufacturing, using, or selling the inventions without the permission of the patent holder.
True
Property law affects all businesses that own or deal in property by defining the risks assumed by the ownership or possession of property.
True
Public property is owned by the government.
True
Rent abatement is a reduction in the amount of rent payable.
True
Tenants have the right to sublet the premises unless the lease states otherwise.
True
The Copyright Act protects a broad range of works including recorded music and computer programs.
True
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
The tort of passing off provides protection for trade-marks and does not require registration of the trademark.
True
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. Every bailee (possessor) has a duty to take care of the bailor's (owner's) goods. In other words, the bailor may sue the bailee for the tort of negligence if the goods are damaged. In some cases, a defect in the bailed goods, such as a faulty braking system in a leased car, can result in the bailee suing the bailor.
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. c. Conditional on inspection: The agreement of purchase and sale may provide that the buyer is not required to complete the sale unless a building inspection or environmental audit indicates that there are no hidden structural problems with the building. d. Conditional on environmental audit: The agreement of purchase and sale may provide that the buyer is not required to complete the sale unless an environmental audit indicates that there are no hidden environmental hazards on the property. This condition is particularly important to protect buyers of industrial land. Environmental laws can hold buyers responsible for the high costs of cleaning up toxic wastes, even if they were unaware that environmental problems existed at the time of sale.
Briefly describe and compare two types of bailment, using an example of each. How are they different with respect to liability?
a. Lucrative: Money or other payment changes hands. For example, the bailee pays the bailor for renting personal property, or the bailor pays the bailee for storing or repairing personal property. The bailee must conform to the standard of care of the reasonably diligent person. A higher standard may exist if the bailed item is particularly valuable or fragile. The terms of the contract may dictate the standard of care owed by the bailor. If the bailor rents defective equipment to the bailee, the bailor may be liable for harm suffered by the bailee as a result. b. Constructive: The bailor loses personal property, which comes into the possession of the bailee. For example, a customer inadvertently leaves his keys behind at a grocery store. Where the bailment benefits the bailor, the standard of care is low: gross negligence. The constructive bailee has an obligation to return the property to the bailor, if possible. c. Special: Particular obligations are imposed by statute on certain bailment relationships, such as those undertaken in the hotel business. For example, a hotel guest deposits jewellery in a hotel safe. The bailee hotel is required to receive the jewellery for "safe custody" and is liable if the jewellery is damaged, lost, or stolen. The bailor is required to deposit the jewellery in a fastened and sealed box or other receptacle if the hotel requires him to do so. d. Gratuitous: No money or other payment changes hands. The property may be borrowed, to the benefit of the bailee, or it may be stored, to the benefit of the bailor. When the bailment benefits the bailor, the standard of care is low: gross negligence. When the bailment benefits the bailee, the standard of care is very high: slight negligence. Even when the bailment benefits the bailee, such as where the bailor lends property to a friend, the bailor has an obligation to be aware of any defects or vulnerabilities of the property, and to caution the bailee about them.
Briefly describe the two requirements that must be met before a work may be protected by copyright.
a. Originality: Originality demands that the work be new in some way and come from the creator. If a work is not original, it cannot be protected by copyright. In other words, a work that is a copy of another work is not protected. The legal test for originality is not stringent. The work need not be a masterpiece or a great literary achievement. It can be similar to other works, but it must come from the author, rather than from another work. b. Fixation: Fixation demands that the work be more than simply an idea. Ideas themselves are not protected by copyright. To enjoy copyright protection, ideas must be fixed in a material form, such as written pages, digital data, or a video or audio recording. For example, a speech given at a conference may not be protected unless it is written down or recorded. Text on a computer monitor may not be considered fixed until it is saved. If a film company has an idea for a movie but never commissions a script or produces a film, copyright law will not protect the unrealized idea.
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.
Briefly describe two different types of insurance of interest to business, and the losses they protect.
a. Property loss: Businesses carry property loss insurance to protect themselves against the risk of loss from catastrophes such as fire, flood, theft, accident, and extreme weather. Property loss insurance protects businesses against losses of real property, such as factories destroyed by fire, and personal property, such as machinery and equipment inside these factories. b. Liability for property loss: Businesses carry property liability insurance to protect themselves against the financial consequences of failing to take adequate care of the property of customers and others. This form of insurance is particularly important for businesses that act as bailees. c. Occupiers' liability: The occupier of real property — that is, the owner or tenant, depending on who is using the premises — owes a duty of care to customers and others who venture onto the property. Occupiers' liability insurance protects an occupier against negligence lawsuits, by covering her legal costs and any damages awarded. Business tenants of shared spaces, such as shopping malls, should review their leases carefully to determine the extent of their responsibility for maintenance and insurance. d. Business interruption: After suffering the loss of real or personal property, a business may find that its production is seriously impaired or shut down entirely. If, for example, a business is temporarily shut down when a fire devastates its premises, business interruption insurance compensates it for the loss of its operating income.
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.
