Question 1

What is deceit?

Accepted Answer

The intentional making of a false statement with the intention of misleading another person.

Question 2

The Hedley Byrne case establishes the principle of liability to for .

Accepted Answer

A)  friends and relatives; negligence 
B)  third parties; tort 
C)  third parties; negligence misrepresentation 
D)  clients; breach of contract 
E)  clients; breach of fiduciary duty 
A)  friends and relatives; negligence 
B)  third parties; tort 
C)  third parties; negligence misrepresentation 
D)  clients; breach of contract 
E)  clients; breach of fiduciary duty C

Question 3

What is a multi- disciplinary partnership?

Accepted Answer

A multi- disciplinary partnership is one in which partners of one profession practice together with members of other professions, for example lawyers practicing together with chartered accountants.

Question 4

Which of the following is NOT a characteristic of a fiduciary relationship?

Accepted Answer

A)  The fiduciary can unilaterally exercise the power of discretion so as to affect the beneficiary's legal or practical interests. 
B)  The beneficiary places trust in the fiduciary. 
C)  The beneficiary is particularly vulnerable to or at the mercy of the fiduciary holding the discretion or power. 
D)  The fiduciary is more wealthy than the beneficiary. 
E)  The fiduciary has scope for the exercise of some discretion or power. 
A)  The fiduciary can unilaterally exercise the power of discretion so as to affect the beneficiary's legal or practical interests. 
B)  The beneficiary places trust in the fiduciary. 
C)  The beneficiary is particularly vulnerable to or at the mercy of the fiduciary holding the discretion or power. 
D)  The fiduciary is more wealthy than the beneficiary. 
E)  The fiduciary has scope for the exercise of some discretion or power.

Question 5

Which of the following is true?

Accepted Answer

A)  Complying with normal professional standards is always an adequate defence. 
B)  Causation in professional- client relationships is not based on reliance. 
C)  The ordinary standard of care for ordinary negligence, is appropriate when judging the work of a professional. 
D)  A professional who exhibits the degree of skill and knowledge that is commensurate with a particular task, will be held to have met the required standard even if the advice given is wrong. 
E)  The duty to take reasonable care, does not include omissions. 
A)  Complying with normal professional standards is always an adequate defence. 
B)  Causation in professional- client relationships is not based on reliance. 
C)  The ordinary standard of care for ordinary negligence, is appropriate when judging the work of a professional. 
D)  A professional who exhibits the degree of skill and knowledge that is commensurate with a particular task, will be held to have met the required standard even if the advice given is wrong. 
E)  The duty to take reasonable care, does not include omissions.

Question 6

The duty of a professional to take reasonable care does not include a duty not to omit essential matters.

Accepted Answer

A) True 
 B)False

Question 7

The value of a professional is that

Accepted Answer

A)  he or she is able to assist a client in making a decision with the likelihood that the decision will be a sound one. 
B)  he or she is infallible. 
C)  he or she charges high fees for the services they perform. 
D)  he or she is required by law not to make mistakes. 
E)  he or she performs services in society. 
A)  he or she is able to assist a client in making a decision with the likelihood that the decision will be a sound one. 
B)  he or she is infallible. 
C)  he or she charges high fees for the services they perform. 
D)  he or she is required by law not to make mistakes. 
E)  he or she performs services in society.

Question 8

An accounting firm negligently prepares an audit of a company. The audit is intended to help the shareholders in the work of supervising management. Some investors review the audit and, in reliance on the audit, purchase shares in the company. If the investors lose a substantial amount of money and they sue the accounting firm, the firm would be liable for

Accepted Answer

A)  breach of fiduciary duty. 
B)  breach of contract. 
C)  would not be liable. 
D)  negligent misrepresentation. 
E)  the tort of libel. 
A)  breach of fiduciary duty. 
B)  breach of contract. 
C)  would not be liable. 
D)  negligent misrepresentation. 
E)  the tort of libel.

Question 9

The contractual duty of a professional contains a promise

Accepted Answer

A)  to engage other agents in pursuance of the contract. 
B)  to perform the services with due care. 
C)  to accept payment rendered for services. 
D)  to submit invoices denominated in Canadian dollars only. 
E)  to work for the client. 
A)  to engage other agents in pursuance of the contract. 
B)  to perform the services with due care. 
C)  to accept payment rendered for services. 
D)  to submit invoices denominated in Canadian dollars only. 
E)  to work for the client.

Question 10

James, one of the partners of James & fiduciary duty. Co., the auditors of a major Canadian corporation (Canco), is one of the major shareholders of Canco. This situation could result in a

Accepted Answer

A)  breach of duty. 
B)  breach of contract. 
C)  violation of the statute. 
D)  conflict of interest. 
E)  fiduciary duty. 
A)  breach of duty. 
B)  breach of contract. 
C)  violation of the statute. 
D)  conflict of interest. 
E)  fiduciary duty.

Question 11

The duties of professionals may be categorized as

Accepted Answer

A)  duty in tort, business and contractual duty. 
B)  fiduciary, duty in tort, and duty to employees. 
C)  general duty, contractual duty and duty in tort. 
D)  contractual, duty to employees, and duty in tort. 
E)  contractual, fiduciary and duty in tort. 
A)  duty in tort, business and contractual duty. 
B)  fiduciary, duty in tort, and duty to employees. 
C)  general duty, contractual duty and duty in tort. 
D)  contractual, duty to employees, and duty in tort. 
E)  contractual, fiduciary and duty in tort.

Question 12

The essence of causation in the professional client relationship is reliance.

Accepted Answer

A) True 
 B)False

Question 13

A lawyer who enters into a business transaction with a client, and neglects to inform the client that his credit rating is poor may be found to be

Accepted Answer

A)  in breach of his or her fiduciary duty. 
B)  in breach of the law that governs lawyers. 
C)  in breach of contract. 
D)  in breach of his or her duty to inform the client. 
E)  in breach of the common law. 
A)  in breach of his or her fiduciary duty. 
B)  in breach of the law that governs lawyers. 
C)  in breach of contract. 
D)  in breach of his or her duty to inform the client. 
E)  in breach of the common law.

Question 14

Self- regulating professions are governed by

Accepted Answer

A)  the individual professional's own rules. 
B)  a governing body comprised mainly of the members of the profession. 
C)  federal legislation. 
D)  standards determined by a majority of the members of the profession. 
E)  provincial legislation. 
A)  the individual professional's own rules. 
B)  a governing body comprised mainly of the members of the profession. 
C)  federal legislation. 
D)  standards determined by a majority of the members of the profession. 
E)  provincial legislation.

Question 15

Most of the major professions are governed by professional organizations that are regulated by

Accepted Answer

A)  provincial statutes. 
B)  the common law. 
C)  rules set by the professional bodies. 
D)  ancient rules of medieval guilds. 
E)  codes of conduct. 
A)  provincial statutes. 
B)  the common law. 
C)  rules set by the professional bodies. 
D)  ancient rules of medieval guilds. 
E)  codes of conduct.

Question 16

Damages for breach of fiduciary duty is restitutionary in that

Accepted Answer

A)  the client is entitled to be placed in the position he would have been had the breach not occurred. 
B)  the client may be contributorily negligent. 
C)  the breach is not a breach of contract. 
D)  the professional is required to give back what he has taken from the client. 
E)  the breach is not a tort. 
A)  the client is entitled to be placed in the position he would have been had the breach not occurred. 
B)  the client may be contributorily negligent. 
C)  the breach is not a breach of contract. 
D)  the professional is required to give back what he has taken from the client. 
E)  the breach is not a tort.

Question 17

A disclaimer is

Accepted Answer

A)  a statement made by one person to the effect that the person making the statement will assume liability for loss up a certain specified limit. 
B)  an exclamation. 
C)  a statement in a claim of a client against a professional to the effect that the client seeks to claim damages for specified breaches. 
D)  a statement made in soft voice or tone. 
E)  a statement to the effect that the person making it does not assume any responsibility for an action. 
A)  a statement made by one person to the effect that the person making the statement will assume liability for loss up a certain specified limit. 
B)  an exclamation. 
C)  a statement in a claim of a client against a professional to the effect that the client seeks to claim damages for specified breaches. 
D)  a statement made in soft voice or tone. 
E)  a statement to the effect that the person making it does not assume any responsibility for an action.

Question 18

What is a fiduciary duty?

Accepted Answer

A fiduciary duty is a duty tha

Question 19

The standard of care that the law imposes on a professional who is sued for negligence is

Accepted Answer

A)  what a reasonable member of the profession would do in the circumstances 
B)  acting to the best of the professional's ability 
C)  making full disclosure to the client 
D)  the standard of care adopted by a particular professional body 
E)  whether the professional considered the best interests of the client 
A)  what a reasonable member of the profession would do in the circumstances 
B)  acting to the best of the professional's ability 
C)  making full disclosure to the client 
D)  the standard of care adopted by a particular professional body 
E)  whether the professional considered the best interests of the client

Question 20

A plaintiff is entitled to a higher damage award for breach of fiduciary duty.

Accepted Answer

A) True 
 B)False

Exam 4: Professional Liability

What is deceit?

The Hedley Byrne case establishes the principle of liability to for .

What is a multi- disciplinary partnership?

Which of the following is NOT a characteristic of a fiduciary relationship?

Which of the following is true?

The duty of a professional to take reasonable care does not include a duty not to omit essential matters.

The value of a professional is that

The contractual duty of a professional contains a promise

James, one of the partners of James & fiduciary duty. Co., the auditors of a major Canadian corporation (Canco), is one of the major shareholders of Canco. This situation could result in a

The duties of professionals may be categorized as

The essence of causation in the professional client relationship is reliance.

A lawyer who enters into a business transaction with a client, and neglects to inform the client that his credit rating is poor may be found to be

Self- regulating professions are governed by

Most of the major professions are governed by professional organizations that are regulated by

Damages for breach of fiduciary duty is restitutionary in that

A disclaimer is

What is a fiduciary duty?

The standard of care that the law imposes on a professional who is sued for negligence is

A plaintiff is entitled to a higher damage award for breach of fiduciary duty.

Law and Society

The Machinery of Justice

The Law of Torts

Formation of a Contract: Offer and Acceptance

Formation of a Contract: Consideration, and Intention to Create Legal Relations

Formation of a Contract: Capacity to Contract and Legality of Object

Grounds Upon Which a Contract May Be Impeached: Mistake

Grounds Upon Which a Contract May Be Impeached: Misrepresentation, Undue Influence, and Duress

The Requirement of Writing

The Interpretation of Contracts

Privity of Contract and the Assignment of Contractual Rights

The Discharge of Contracts

The Effect of Breach

Remedies for Breach

Sale of Goods

Leasing and Bailment

Insurance and Guarantee

Agency and Franchising

The Contract of Employment

Negotiable Instruments

Intellectual Property

Interests in Land and Their Transfer

Landlord and Tenant

Mortgages of Land and Real Estate Transactions

Sole Proprietorships and Partnerships

The Nature of a Corporation and Its Formation

The Internal Affairs of Corporations

The External Responsibilities of a Corporation

Secured Transactions

Creditors Rights

Government Regulation of Business

International Business Transactions

Electronic Commerce

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