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Business Law
2022 Business Law Exam Review
| Question | Answer |
|---|---|
| Land | Soil, building(s), and fixtures |
| Crown Land | Government owned land |
| What are the four main interests in land? | Fee simple, life estate, leasehold estate, condominiums |
| Fee Simple | full ownership and you can dispose of land while living or after death |
| Life Estate | Right to use land while alive, upon death their rights end |
| Leasehold Estate | tenant has right to exclusive, quiet possession for term of the lease |
| Condominium | ownership of unit and shared ownership of common elements |
| Board of directors | decided on by condominium owners who hire professional management to look after day to day operations. |
| Board of Directors has the power to.. | pass by-laws on noise, pets and children as well as fine members who voilate by laws or force them out of unit. |
| What are the two options for multiple land owners | Tenancy in common and Joint tenancy |
| Joint tenancy | Equal ownership and survivorship - if one dies the other owner gets their interest |
| Tenancy in Common | Each owner can deal with their own interest and decide after death who gets their interest |
| What are other interests in land | easement, statutory easement, right of way, adverse possession |
| What are the two ways to keep track of ownership in land? | land titles act and land registry act |
| Registry act system | old- required lawyer to search back at least 40 years to ensure ownership and title had no outstanding claims |
| Land Titles Act | computerized which gov guarantees the title except in fraud cases |
| Family asset | full value of family home is family asset when couple split regardless of who bought the home or who it is registered under |
| What can override the family law division of an asset? | marriage contract |
| Exclusivity clause | states that tenant shall be the only business of that type in an area (ex. mall) |
| Radius Clause | restricts tenants rights to open up another branch within a certain radius of the mall |
| Repair | duties should be carefully drafted, usually tenant does internal repaid and landlord does structural repairs |
| Re-entry right | Landlord has re-entry right and can evict commercial tenant without court order 15 days after rent is overdue |
| Distress right | Landlord can seize and sell commercial tenants assets to recover money owed (this continues lease) |
| Terms of Distress rights | landlord bust give notice of sale, hold goods for 5 days, and obtain 2 appraisals |
| Can landlord distress tenant and lock them out? | no |
| What are the two steps of a mortgage transaction? | 1) lender agrees to the loan 2) customer pledges the house as security for repayment of the loan |
| What can mortgage lender do if customer does not pay? | sue in civil court on promise to pay, sell property under a court supervised judicial sale, sell privately under power of sale (45 days), sell property under foreclosure rights after 6 month period. |
| Borrower's Remedies | ask for an accounting, have court assessment evaluate legal fees, let borrower sell house, ask court to convert the foreclosure to a sale. |
| What are three types of mortgage fraud? | identity theft, Texas-two step, Oklahoma flip |
| Insurance agent | works for one insurance company |
| insurance broker | works for their client and tries to find best insurance and rate for customer |
| premium | amount client pays for insurance coverage |
| deductible | amount customer pays first before insurance company pays a lame. The higher deductible the lower the insurance premium. |
| Types of insurance: | personal, property, business |
| Duty of utmost good faith | when a person applies for insurance there is a duty of utmost good faith |
| Exclusion clause | all risk policies do not cover all risks, most policies have exclusion clauses that deny coverage in specific situations |
| Intellectual Property | intangible property that covers a variety of creations |
| Intellectual property includes: | copyrights, trademarks, patents, industrial confidential designs information, personality rights |
| Personality rights | protects well-known person's right to control the commercial us elf their distinctive features such as name, image, voice and likeness |
| Copyright | applies to artistic creations |
| Copyright includes | literature, art, music, film, photos, maps, drawings and computer software |
| Copyright gives.. | author exclusive right to reproduce their work for their lifetime plus 50 years for most works |
| Can you copyright and idea? | no, but you can copyright the expression of an idea |
| What to copyrights extend to include? | preforming, reproducing, publishing, translating, and adapting the format of work |
| What is needed to protect your rights in other countries? | international registration |
| Trademarks | apply to names, symbols, logos and sounds that distinguish goods |
| How long do trademark registrations last for? | 15 years but can be renewed every 15 years for eternity |
| Trademark infringement | occurs when another uses a trademark identical or confusingly similar to another (owner can sue under trade-mark act or in tort of passing off) |
| industrial design | unique pattern, shape or ornament that appeals to the eye and is commercially reproduced |
| When do you register industrial design? | within one year of the design becoming known to the public |
| How long does industrial design right last? | 10 years but must be paid in first 5 |
| Patent | obtained for a new, unique and useful product, apparatus, process or drug |
| How long do patent rights last | 20 years |
| What are the three sections of the Criminal Code that may apply when confidential info is taken and a computer is involved? | fraud, unauthorized use of computer, and mischief related to data |
| Anti-spam legislation | it is an offence to send an electronic message for commercial purposes unless the other parts consented. |
| What must employer make for employees? | source deductions and contributions (ex. taxes, CPP, EI, WSIB) |
| Employee | employer determines when, where, how the work is to be done and worker is integrated into business |
| indépendant contractor | person provides their own tools, hires helpers, and bears risk of profit/loss |
| Do employment contracts have to be in writing? | no |
| What working conditions do federal and provincial standards legislation set? | minimum wage, vacation, family leave, max work hours, statutory holidays, maternity leave, overtime pay, parental leave, emergency leave |
| Can workers who are injured on the job sue their employer? | no |
| What are steps to prevent workplace discrimination and harassment? | set policies, provide training, have complaint procedure, punish offenders |
| Just cause dismissal | employee did something so bad they can be terminated without any notice Goes to the "heart of the employment relationship" |
| Wrongful dismissal | Employee conduct did not rise to level of just-cause termination. Employee entitles to notice |
| Constructive dismissal | Employer made a fundamental change so the employee was forced to quit and can sue. |
| Progressive discipline | if worker has done something wrong, court can require employer to use progressive discipline and go through de-hiring steps |
| Steps in progressive discipline | Oral warning, written warning, suspension, demotion, termination |
| What can just cause dismissal include | theft, dishonesty, incompetence, intoxication, frequent lateness, repeated absences etc. |
| Long term Illness or Disability | may entitle company to treat the contract as frustrated |
| Can employer be liable for sexual harassment acts from employees? | yes |
| Poisoned work environment | serious repeated wrongful behaviour that makes employment impossible |
| When is it a wrongful dismissal? | if the employer did not have a just case or the worker had done something wrong but should have received progressive discipline not termination and de-hiring was not done |
| Notice | when employee is terminated without just cause they are entitled to termination notice or pay in lieu of notice |
| Statutory termination notice | the minimum amount an employer must pay to terminate an employee if there is no just cause |
| Common law notice | an employee can claim instead of statutory termination notice and severance pay |
| Factors determining common law notice | nature of the job, length of service, age of employee, availability of similar jobs |
| Lesser notice | legal as long as it is equal or greater than all statutory requirements |
| Wrongful resignation | employees should give their employer reasonable notice if they leave |
| Labour unions | generally have higher wages, better benefits, and earlier retirement. |
| Union | voted on by non-managerial workers who are 50% +1 in favour. The union negotiates a collective contract on behalf of the workers. |
| What are the three types of unions? | Closed shop, union shop, rand formula |
| Closed shop | company can only hire workers already in the union |
| Union shop | Company can hire any worker but the worker must then join the union |
| Rand formula | company can hire anyone and they do not have two Join union, but they must pay union dues. |
| When can unions picket when on strike? | when it is not creating a nuisance or creating violence |
| What are the steps required for a legal strike or lockout? | 1) Collective agreement expired 2) both sides bargain for a specific time period 3) union conducts a strike vote and if 50%+1 is yes 4) outside 3rd party mediator is brought to suggest settlement but not binding 5) cooling off period 6) strike/lockout |
| What is the purpose of a bankruptcy act? | to save an ongoing business or individual from bankruptcy if possible and to ensure a fair distribution of bankrupt assets among creditors if bankruptcy occurs. |
| Who does bankrupt? | Both people and corporations. |
| Causes of bankruptcy | financial mismanagement, job loss or reduction in employment income, illness and medical problems, separation or divorce, failure of a business, unexpected events, gambling |
| What are the three ways to go bankrupt? | voluntarily, involuntarily, division 1 proposal is rejected |
| Proposals | many debtors present a proposal to creditors to try and avoid bankruptcy with Licensed Insolvency Trustee's help |
| Division 1- Commercial proposal | used by any commercial debtor and any individual. Debtor gives creditors notice and then has 30 days to come up with proposal. If proposal is rejected the debtor automatically goes bankrupt. |
| Division 2- Consumer Proposal | Only used by consumers who owe less than $250,000 excluding a home mortgage. Less formal, court approval not required, if rejected not automatic bankrupt. |
| Companies Creditors Arrangement Act (CCAA) | for corporations that owe more than 5 million. |
| Bankruptcy process | the assets of the debtor is transferred to the trustee , trustee determines what the debtor owns and owes, creditors file a proof of claim and meets with trustee, trustee sells off debtors assets and distributes process to creditors in strategic way |
| What are the three categories of creditors? | secures creditors, preferred creditors, unsecured creditors. |
| Secured creditors | creditors who hold a security interest on a debtors assets ex. bank has mortgage on the building |
| Preferred creditors | classes of creditors the BIA gives priority to ahead of unsecured creditors ex. gov for taxes owed |
| Unsecured creditors | Creditors with no security interest and no special priority ex. suppliers |
| Discharge from personal bankruptcy | clear a person from bankruptcy and debts are "wiped clean" |
| What are debts not discharged in personal bankruptcy? | student loans the are 7+years after grad, spousal and child support, fines, debts due to fraud/assalt, income tax debts over $200,000 |
| What are financial institutions in Canada? | banks, trust companies, credit unions, finance cos. and pay day loan cos. |
| Guarantee and Indemnity | third party who guarantees a loan will be paid if personal guarantee on business so that if person cannot pay the guaranteer will. |
| When can a bank refuse to pay a payee? | the drawers account has non-sufficient funds, the cheque has been altered or changed, the cheque is stale dated (6+ months) the payee lacks proper identification, there is a stop order on the cheque |
| Forgery and Fraud | bank is liable if it cashed a forged cheque but customer must report it within 30 days |
| Letter of credit | bank agrees to pay specific amount of money when a specific event occurs |
| Promissory note | negotiable instrument that is a written promise to pay the amount written on the note, |
| Security interests | lenders can use or sell assets that are not pledged as security for a loan, Lenders want a security or collateral that they can use to get the money tehey are owed if debtor does not make their payment. |
| PPSA | Personal property security act |
| PPSA purpose | to regulate the priority of security interests in personal property |
| Conditional Sales Contract | buyer has possession of the goods but seller has legal title until the last payment is made. |
| General Security Agreement | one document that allows a lender to claim on all tangible and intangible personal property of a debtor. (real estate not included) |
| Receiver | has the right to seize and sell the company's assets to pay debts, and can run the business. |
| White-collar crime | non-violent financial crime often commuted by business professionals ex. lawyer, accountant... |
| What is the maximum fraud sentence | 14 years in jail |
| What does IMET stand for and what is purpose | Integrated Markets Enforcement Team, RCMP created it to target white collar crime. |
| Insider trading | it is illegal to buy or sell shares of a public company with knowledge of "material information" that has not been publicly disclosed. |
| Sole proprietorship | a business that is owned and operated by one person who is personally liable for the business debts |
| What are advantages of sole proprietorship? | simple, cheap, easy to form, don't have to share profits |
| What are disadvantages of sole proprietorship? | Unlimited personal liability, pay personal tax rates, one person does not have all the skills, difficult to raise money, difficult to transfer ownership |
| General Partnership | Two or more people carrying on a business together and each one is personally liable for the partnership debts. Each own each other a fiduciary duty |
| What are disadvantages of general partnership? | unlimited personal liability, fights, pay higher taxes |
| Limited partnership | one or more fully liable general partner and one or more limited partners who is only liable for the money they invested in the partnership. Limited partner cannot actively participate in the business and must be registered with the government. |
| Corporation | separate legal entity whose actions and liabilities are separate from its owners, the shareholders. |
| Parent-subsidary relationship | owns 50% or more of the shares of another corporation |
| IPO | initial public offering used as a first attempt to sell shares to the general public. |
| Shareholders Rights | have right to financial statements, inspector appointed, and seek oppression remedies. |
| Duties of directors | fiduciary duty, oversee corporation, select officers, set executive compensation |
| Directors liability | torts they commit on behalf of the corp, but not for contract claims. |
| Protection for directors | due diligence defence, directors' liability insurance, corporation sets up a liability fund. |
| Due diligence defence | involves setting up policies and procedures to prevent violations. |
| Agency | a principal hires an agent who is authorized to act on their behalf and set up a contract with a third party. Agent is not liable for contract disputes. |
| Agent duties | act within authority, follow principal's instructions and update them, owe principal fiduciary duty, disclose they are agent, sign "per" the principal indicating they are agent. |
| Principal duties | vicariously liable for agents actions, pay agent, assume liability for contracts agents sign, principal must inform third parties if agent is no longer with them. |
| Franchises | agreement that is grants the right to use a name, trademark and business system for a product or service |
| Common terms in a franchise agreement: | initiation fee, royalties, advertising fees, tied selling of supplies, non-competition term, termination terms. |
| Advantages of franchises | recognized name and advertising, tested management system, higher chance of successes, lower cost for supplies, on-going support |
| Disadvantages of franchises | high initiation fees, ongoing royalties, high advertising fees, higher costs for supplies, high rent, too many franchises in one area, inflated profit, unfair renewal or termination |
| Why do courts want to enforce contracts? | they provide certainty and predictability |
| Why may a contract be set aside? | misrepresentation, mistake, duress, undue influence, unconscionable transaction, non est factum. |
| misrepresentation | false statement about a material fact that induces another into a contract |
| what are the three types of misrepresentation | innocent (honest lie), negligent (careless lie) and fraudulent (intentional lie) |
| is silence usually a misrepresentation? | no |
| duty to disclose | usually n o duty on the seller to disclose on defects when selling goods |
| what are exceptions to duty to disclose | insurance contracts, franchise agreements, real estate deals - latent defects that are health hazards |
| False advertising | offence under several laws |
| mistake | erroneous belief or misunderstanding about an essential term in a contract- usually you are stuck with it |
| rectification | large and obvious clerical error which the court may grant rectification order and alter the mistake |
| duress | contract that is formed due to threats or actual physical violence |
| economic duress | one party knows the other is in a desperate financial position and uses unfair methods to obtain better terms in a contract |
| undue influence | one party unduly or unfairly influenced or pressured into making a contract they did not want to make |
| Non est factum | "it is not my act", contract made in foreign language that the other party is illiterate in. |
| Frustration | occurs when an outside event makes it impossible to complete the contract and excuse a party from performance |
| Possible causes of a frustrated contract | law change, Mother Nature (acts of god), injury or sickness, cancelation, fire, theft, strikes, etc. |
| Breach of contract | occurs when a party does not perform the contract as precisely promised. |
| minor breach | minor term not fulfilled- innocent must continue contract but can seek remedies |
| major breach | major term is not fulfilled- innocent party is substantially deprived of the main benefit of contract. Can end contract or continue and seek remedies. |
| Damages for breach of contract | awarded to put injured party in the same position as if the contract was completed properly. |
| Pecuniary damages | money for financial losses if contract had not been breached |
| Non-pecuniary damages | money for non-financial losses such as pain and suffering, uncommon in the contract cases as not often a personal injury |
| aggravated damages | money for mental anguish, distress or emotional upset and requires medical proof |
| punitive damages | money awarded to punish intentionally bad behaviour and not often awarded |
| nominal damages | small amount awarded as no financial losses |
| order of specific performance | court orders defendant to preform contract, usually only given if a contract for the sale of something rare or unique ex. house or rare painting |
| injunction | a stop order issued by the court to stop a particular action |
| Anton piller order | a civil search warrant |
| rectification order | a court will correct a wide large obvious clerical mistake in a contract |
| an accounting | a party must deliver their books to an expert and court order that illegal profits be paid. |
| Bailment | involves giving up possession of your goods to another for a purpose |
| bailor | owner of the goods |
| bailee | keeper of the goods |
| liability issues in bailment | owner gives up possession but not ownership, duty of bailee to take reasonable care |
| Lien right | if the bailee is not paid, they have a lien right to keep and then sell the goods to get the money they are owed |
| Real property | land, buildings fixtures, (permanent things) |
| Personal property | tangible personal property (hard assets such as vehicles, furniture, equipment) and intangible personal property (legal rights and creative works such as patent, debts, copyrights) |
| implied terms of the Sale of Goods Act | 1. seller has right to sell goods with no unpaid claims on it 2. goods sold will match description 3. Goods sold will be merchantable 4. Goods sold must be fit for a specific purpose |
| Cooling off period | you can get out of a contract if done in writing within the time period even if paid and used it |
| What are common cooling off periods? | 2 days, 10 days, 20 days |
| Competition act | Goal is to maintain and encourage competition in Canada while ensuring small and medium sized businesses have equitable opportunity to participate In the economy. |
| Conspiracy | such as cartels that agree to fix price, allocate customers and control supply to the market resulting in higher prices to customers |
| Civil Reviewable Matters | false and misleading advertising, bait and switch mergers, abuse of dominate position |
| Dual Track Matters | offences that can be pursued as either criminal or civil reviewable matters |
| Bid-rigging | two or more persons artificially increase the prices offered in bids to potential customers |
| Bait and switch | lure customers with low prices but inadequate supply and then try to sell higher price item |
| What are common misleading practices? | special sale, "free", false price comparison, bait and switch, false comparative studies. |
| Comparing prices to imply a bargain | company compares sales price to higher regular pice that it rarely or never sold goods at. Seller cannot claim a regular price unless it has sold a substantial volume at that price for a substantial amount of time (usually 6+ months) |
| Abuse of dominate position offences | price maintenance, predatory pricing, exclusive dealing, tied selling, market restriction, refusal to deal |
| PIPEDA | Personal Information Protection and Electronic Documents act- protect personal info |
| Contract law principles | freedom to contract, enforcement of a contract, certainty and predictability |
| Contract interpretation | equity, fairness, public policy |
| consumer vs business | unequal bargaining power, complex legal terms, consumer does not read/understand |
| Unfair surprising term | only enforced if reasonable measures were taken to bring the term to the attention of the consumer (ex bold/highlight) |
| contract interpretation | what a reasonable person would understand a term to mean |
| Parole Evidence Rule | if a contract is in writing no extrinsic oral or written evidence that contradicted a contract terms will be considered. |
| Implied terms | court will add an implied term if it is an obvious oversight and it is understood that both parties would have easily agreed to it when the contract was made |
| Mongolia | right to access leased space |
| Limitation Clause | the damages a business is liable for |
| Exemption or disclaimer clauses | the business is not liable for any losses (Ex, parking lot not liable for damages) |
| Liquidated damages | pre-set amount of damages that a contract states will be paid if there is a breach |
| deposit | sign of good faith |
| down payment | part of purchase price |
| interest rates | illegal over 60%. exception for pay day loans (up to 500%) |
| contract | an exchange of promised between two or more parties that will be enforceable in the court of law |
| who lacks capacity to contract? | minors, intoxicated people, mentally incompetent |
| steps in reaching a consensus | negotiations, offers and counter offers, acceptance |
| option | new and separate contract to keep an offer open for a specific time |
| counter-offer | if a party changes any terms in the original offer, it is a counter-offer not an acceptance |
| consideration | each party in a contract must get a consideration- something of value |
| Negligence | unintentional careless conduct that results in reasonably foreseeable damages |
| standard of care | the amount of care a "reasonable person" would take in the same circumstance |
| duty of care | owed to your neighbour -party that you should have reasonably foreseen would be affected by your actions. (In close enough proximity) |
| remoteness of damages | the defendant is only liable for damages that are reasonably foreseeable and not remote ones |
| contributory negligence | plaintiff is partly liable for their own injuries |
| voluntary assumptions of risk | plaintiff is 100% liable for their own injuries as they voluntarily assumed the risk |
| occupiers liability | occupier of a property has a duty of care to keep their property reasonably safe for people who come onto it |
| small claims court max claim amount | $35000 |
| class actions | lawsuit brought by group of individuals on the same defendant |
| fundamental rights | groups of rights that have been recognized by Supreme Court as requiring high degree of protection from government encroachment. |
| tort | a wrongful act that causes harm in a ciivl law |
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Annie_k19883
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