Deck 1: Knowledge of Law As a Business Asset

Question 1

A dispute has arisen between business entities with a lengthy relationship, and each would suffer economically if the relationship were to suddenly end. What procedure should first be employed to attempt to maintain the relationship and quickly resolve the dispute?

A) Consult with accountants to determine whether the company can afford litigation.
B) Refuse to compromise and look for alternate business relationships.
C) Attempt to negotiate a direct resolution with the goal of achieving a formalized settlement agreement if necessary.
D) Ask the company lawyer to commence litigation.

Answer 1

C

Question 2

What was the outcome of U.S. government reluctance to regulate the activities of its banks, financial institutions, and markets?

A) U.S. destabilization left global markets unaffected.
B) There was severe destabilization of global markets and economies.
C) Subprime mortgage lending continued to grow.
D) U.S. banks, markets, and financial institutions flourished.

Answer 2

B

Question 3

What law regulates the use of tanning beds in Nova Scotia?

A) the Tanning Beds Act
B) the Consumer Protection Act
C) the Criminal Code of Canada
D) the Constitution of the World Health Organization

Answer 3

A

Question 4

How does a legal contract contribute to a business relationship?

A) It contributes uncertainty of liability in the relationship.
B) It defines the moral principles and values of the relationship.
C) It provides principles of paramount to govern the relationship.
D) It gives structure, predictability, and security to the relationship.

Question 5

Risk managers were keen to use unregulated, derivative mortgage products to shift risk off their balance sheets. What is the consequence of failing to regulate investment business activities in a free-market environment?

A) Unscrupulous participants use the opportunities to act exploitatively.
B) Market participants voluntarily enforce ethical business practices.
C) Oversight by directors is a guarantee of scrupulous behaviour.
D) Market participants will cautiously push markets to expand.

Question 6

I'mNottaSoSmart Inc. overlooked the proper registration of its patent for a unique relay component used in its new software before release for public sale. A year later it discovered a competitor had used the component in its just-released patented software. Which of the following best describes the consequences to the competitor for its actions?

A) Unprotected intellectual property can be used with impunity.
B) Theft of business property is a criminal offence.
C) Patent law infringements are punishable offences.
D) Losses due to theft of business property are recoverable.

Question 7

Organic Veggies'4'U Inc. has entered into a one-year, extendable supplier contract with EcoWise Fertilizers Ltd. for the delivery of 1.5-ton pallets of worm castings fertilizer at a price of $2,000 per ton in March and June. What type of role do contract law and its contributions to the establishment of this business relationship have?

A) a facilitating role, providing definition, context, and certainty
B) an ethical role, facilitating better environmental practices
C) a litigation role, defining clear areas of liability for breach
D) a governing role, providing a comprehensive action plan

Question 8

What are the commonly used alternative dispute resolution methods for avoiding litigation?

A) intervention, negotiation, and reconciliation
B) intervention, arbitration, and mediation
C) negotiation, mediation, and adjudication
D) direct negotiation, mediation, and arbitration

Question 9

Which of the following best defines business law?

A) legal responsibility for the occurrence of an event causing loss
B) rules governing commercial relationships and the enforcement of rights
C) rules governing procedures involved when one person sues another
D) rules providing members of a society with established rights

Question 10

Which of the following matches the reality that contracts cannot recite or provide for all contingencies, leaving some issues unstated?

A) The degree of certainty established in a contract is not entirely absolute.
B) Contractual disputes over unknown contingencies require litigation.
C) Standard form contracts are preferred as they cover all contingencies.
D) Unknown contingencies can cause irreconcilable disputes between businesses.

Question 11

Which of the following best exemplifies some of the most important contributions the law provides when facilitating commercial activities?

A) structure, confidence, and preclusion
B) structure, certainty, and prevention
C) structure, certainty, and predictability
D) structure, confidence, and promise

Question 12

Novel Swings Inc. has a contract to begin construction of a school's swing set on June 15th and work is to be completed by August 1st. After weeks of wet weather, the ground was unsuitable for work to begin in June and Novel will not meet the completion deadline. Which of the following best describes the legal statutes of the contractual relationship between Novel Swings and the school?

A) The contract is void due to wet weather.
B) The contract requires renegotiation.
C) The contract is in good standing.
D) The contract has been breached.

Question 13

What is the purpose of contract law?

A) to ensure litigation of parties committing contractual breach
B) to prescribe principles and values for use in society
C) to determine right and wrong in the business world
D) to enforce expectations and facilitate planning

Question 14

Mortgage Plus Inc. made outstanding profits selling derivative, asset-backed investments based on subprime mortgage products. What was the incentive for mortgage lenders to bundle derivative investment products with subprime mortgage loans?

A) Mortgage lenders were able to avoid all risk of loss from borrower default.
B) Borrowers were able to escape consequences of default on payments.
C) Risk of loss to mortgage lenders resulting from borrower default was less.
D) Mortgage lenders could share risk of loss from borrower default.

Question 15

What is the primary asset needed to maximize protection of entrepreneurs and the entire business enterprise?

A) inventory tracking software
B) accounting software
C) surveillance cameras
D) knowledge of business law

Question 16

Jim has retained a lawyer to file a lawsuit claiming economic loss due to theft of business revenues by his partner. What form of dispute resolution has Jim undertaken?

A) arbitration
B) mediation
C) litigation
D) reconciliation

Question 17

Which of the following situations best exemplifies how the law protects members of society?

A) The RCMP reviews Robert's email without the required judicial warrant.
B) Bruce's company car is stolen; no one is charged with the crime.
C) Evelyn is awarded compensation for wrongful dismissal.
D) Alexis is not charged for identity theft; the two-year time limit passed.

Question 18

Windy Energy Inc. recovered most of its property stolen by a former employee. The employee was placed on probation and ordered to pay restitution. What type of law determined the employee's punishment?

A) employment law
B) business law
C) criminal law
D) contract law

Question 19

Which of the following is a distinguishing characteristic of the influence of law on the business environment?

A) The influence of law does not have to be exacting and literal.
B) The influence of law demands strict, literal enforcement.
C) The influence of law requires litigation of all disputes.
D) The influence of law creates rules of procedure for planning.

Question 20

A small group of entrepreneurs undertaking a business venture have agreed on the roles each will assume in the business, but they must now determine the form of business structure for the enterprise. What does the law facilitate by offering entrepreneurs different business structure options?

A) choice of degree of exposure to liability for business risks
B) rules that make written agreements between parties binding
C) opportunities to maximize the protections that the law extends
D) legal certainty for activities conducted in the commercial arena

Question 21

Litigation directly involves lawyers, judges, and the court system because it is the process one person or a business must use to sue another.

Question 22

In every type of business dispute resolution, Canadian law requires that a judge must decide the amount of the loss to prevent hard feelings between the parties and allow the business relationship to be maintained.

Question 23

The creation of complexity in business relationships is one of the most important contributions the law can make to the commercial arena.

Question 24

Which of the following is an example of how business law guides business conduct?

A) The law sets rules and penalties to encourage compliance.
B) The law sets specific codes of ethics to guide conduct.
C) The law seeks levels of compensation exceeding losses.
D) The law limits executive compensation to guide conduct.

Question 25

Recent events involving fraud on the public in Canada confirmed that failure to comply with the obligation to abide by the law can lead to severe consequences for business enterprises, including financial penalties and criminal prosecution.

Question 26

What is the main goal of the Canadian legal system?

A) to facilitate commerce and mediation of disputes
B) to facilitate arbitration and free trade
C) to facilitate free trade and planning for the future
D) to facilitate planning, protection, dispute resolution and justice

Question 27

Canada offers an attractive commercial environment for entrepreneurs because it has an established set of laws comprised of rules and principles intended to guide conduct in business relationships and protect the property of persons and business.

Question 28

Evergreen Solutions Inc. intends to sell its database of customer contact information to a telemarketing firm. What infraction might Evergreen Solutions Inc. be committing if it proceeds with this plan?

A) privacy breach
B) Criminal Code conflict
C) conflict of interest
D) financially profitable

Question 29

Contract law refers to a collection of rules used to establish contracts as binding agreements between contracting parties and to ensure their obligations can be legally enforced.

Question 30

Canadian business law consists of a set of established bilingual rules governing commercial relationships that exclude enforcement of rights.

Question 31

An outdoor adventure business that inhumanely kills sled dogs may face prosecution under animal welfare statutes and even the Criminal Code of Canada.

Question 32

Canadian law provides that business owners may discriminate in hiring practices and may ignore the laws of other countries; however, they must comply with the health and safety regulations governing the workplace.

Question 33

Litigation is an expensive and lengthy process that involves one business entity attempting to find a resolution for a conflict caused by the other party to the contract by actively engaging in negotiations aided by a neutral party.

Question 34

What ethical infraction is hiring a company's accounting auditors to act as the business's accounting compliance consultants an example of?

A) unfair tender of contract
B) employee privacy breach
C) conflict of interest
D) labour code violation

Question 35

What type of law is the vehicle for ensuring that those affected by a failed business are treated fairly, reasonably, and in accordance with agreed rules?

A) bankruptcy law
B) contract law
C) criminal law
D) corporate law

Question 36

Which of the following best describes the nature of the mediation process?

A) submission to litigation of the dispute before a judge in court
B) negotiated resolution with the assistance of a neutral person
C) submission to an arbitrator's binding decision to resolve a dispute
D) renegotiation of the contract with the assistance of a judge

Question 37

Which of the following is an example of the values represented in the Canadian legal system?

A) The system seeks to be partial and flexible.
B) The system strives to produce just outcomes.
C) The system seeks to limit fairness and equity.
D) The system demands fairness and subjectivity.

Question 38

Which of the following best exemplifies a protective element of Canadian law?

A) It seeks to make those who break the law accountable.
B) It sets rules in order to encourage complexity.
C) It sets rules in order to encourage complacence.
D) It provides rules that prohibit making commitments.

Question 39

What outcome would eventually result from approaching the operation of a business with an unethical perspective combined with a lack of respect for adherence to and enforcement of the law?

A) commercial social responsibility
B) increased business morality
C) the success of the business
D) the demise of the business

Question 40

What are the standard forms of business structure available to entrepreneurs to facilitate creation of a for-profit business enterprise?

A) sole owner, proprietor, and partnership
B) sole proprietor, partnership, and corporation
C) sole partnership, proprietor, and corporation
D) sole owner, proprietor, and corporation

Question 41

Liability is a set of moral principles and values that seek to determine right from wrong in the business world.

Question 42

Parties that agree to submit disputes to a neutral party who will ultimately make a binding decision to resolve the dispute are agreeing to participate in the arbitration process.

Question 43

Liability between parties engaged in a contractual business relationship refers specifically to the legal responsibility of one party to the other for any event or loss that may occur due to breach of the contract.

Question 44

A contract provides the legal backdrop to commercial relationships by defining the rights and obligations of the parties, but it is the business relationship itself that will determine whether, in a conflict, the parties will insist upon strict enforcement of their legal rights.

Question 45

Briefly describe the main reasons one party to a contract might decide to overlook a breach of contract by the other party.

Question 46

It is a rule of law that a party who suffers a breach of contract is entitled to be put in the position it would have been in had the contract been fulfilled.

Question 47

Briefly describe the main reasons that some business disputes must be resolved in court.

Question 48

A supplier who commits to a contract is free of any legal obligations for direct and foreseeable financial consequences the other party to the contract may experience should the supplier breach the contract.

Question 49

Briefly describe the laws a Canadian business involved in contracts outside of Canada's borders would have to consider to ensure compliance.

Question 50

Briefly describe the steps that parties must go through to achieve the consensus reflected in a contract. What role does a lawyer play in this process?

Question 51

A legal risk management plan involves a business strategy that may require legal supervision to reduce the probability and severity of loss.

Question 52

In the mediation process, the parties to the dispute agree on the choice of the mediator who will be appointed to review the facts of the dispute and make a binding decision to resolve the problem.

Question 53

Identify two basic values of the Canadian legal system? Discuss your own view of how successful the Canadian legal system is in its pursuit of achieving justice, citing examples.

Question 54

In the litigation process, the party initiating a claim for breach of contract is obligated to prove its case, and the judge is obligated to be as objective as possible in determining whether the case of breach has been proven.

Question 55

Businesses that have been unable to resolve complex contractual disputes may have to turn to litigation as the last resort to, among other things, establish the liability of one business to another.

Question 56

Lawsuits come to court for either of two reasons: there is a dispute about the facts that actually occurred or there is a dispute about the way the law treats the parties. Describe the role and obligations of the judge, including what details must be considered and what must be proven to the court to allow it to reach a decision resolving the dispute?

Question 57

While dispute resolution is a function of law, there are other functions that shift the law's focus and intent to another purpose with respect to facilitating relationships. Briefly describe the other functions of law and what the primary focus of law is through their application.