gmgt 3300 past exam questions

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Commercial Law Old Exams

Short Answer Questions

1. What is a Ratio?

It is the narrowest and necessary legal principles upon which a decision is based.

Ratios are the binding aspects of a precedent. Ratios are the legal principleswhich bind future courts. The Ratio Decidendi (principal of precedence) has 2aspects: 1) definitional - element of a previously decided case which is to befollowed by future courts and 2) structural – every court is bound to follow anycase decided by a court above it in the hierarchy of the court system.

2. What is the duty to mitigate in court?

A person who has sustained a loss as a result of a breach of contract must dowhat they can to mitigate (i.e. Limit the extent of their loss). The damages theyrecover at law will not include what they might have reasonably avoided.

3. What does the phrase Mutatis Mutandis mean and in what context was itused during this course?

In Latin means the necessary changes being made to statutes of CanadianParliament and the Provincial Legislation.

4. In the context of Corporate Law, what does “locked in and frozen out”mean and how can such a situation be remedied?

Locked in - minority shareholders will have a hard time to sell their shares

because no one wants them, so they must sell at a huge discount, or sell them tothe majority shareholders to get rid of them. Most often, they are unable to selland must remain a minority shareholder.

Frozen out - Minority shareholders do not have sufficient votes to get somebodyon the board of directors, so they are frozen out of management (therefore theylack any real power/control)

Remedy – the use of provisions in a shareholder’s agreement and especially ashot-gun clause which gives the minority shareholder the option to sell theirshares to the other shareholders at a fair price.

5. In the situation of a breach of contract, various equitable remedies areavailable. Name 3 such remedies.

Specific performance – the court orders the defendant to complete a specific act,injunction - a court order restraining a party from acting in a particular manner,such as committing a breach of contract, and rescission - to restore the parties tothe positions they would have been in had the contract not been made at all.

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6. What is the Law of Equity?

The law of equity is a set of rules which can be invoked to supplement thedeficiencies of common law or to ease the working of common law actions andremedies. Equity is much more discretionary.

7. What are the elements necessary for the imposition of an equitableremedy in contract law?

- Plaintiff must have clean hands: can’t be guilty of unethical conduct - Can’t have acquiescence: no long delays, must act promptly - Requires substantial consideration – the seal, peppercorn or $1 is

insufficient- a court will refuse to intervene on equitable principals when to do

so would affect an innocent third party- a plaintiff must ordinarily be a party again when the remedy would

be awarded were they a defendant instead

8. Roscoe Pound is best known as an adherent to what School ofJurisprudential Though?

Philosophy of science of systems of law, Roscoe Pound is best known to thesocial engineering which led by scientific study of peoples’ needs andexpectations and the prevailing values.

9. Briefly define a guarantee. Indicate when a guarantee might beemployed and for whose benefit.

The person who promises to answer for the default of the principal debtor iscalled the guarantor and his promise is called a guarantee. A guarantee usuallyarises when a prospective creditor refuses to advance money, goods, or servicessolely on the prospective debtor’s promise to pay for them. The creditor mustlook first to the debtor for payment, and only after the debtor has defaulted maythe creditor claim payment from the guarantor. The guarantee is for the benefitof the creditor.

10. What is a limited partnership and identify the danger to an investor ifhe/she participates in the management of such a partnership?

A partnership in which some of the partners limit their liability to the amount oftheir capital contribution so as to isolate their personal assets from the executionto satisfy the liability of the business. Limited partners are prohibited from takingan active role in the business, thus the major requirement for the formation of alimited liability is that there must also be one or more general partners. A limitedliability partnership is utilized especially for investment purposes and for creative,no tax avoidance situations. If a limited partner does participate in the





management of such a partnership, he/she will become liable as a generalpartner, incurring a considerable personal risk. However, he/she can advise onthe management, can examine the records of the firm, and inquire into itsprogress without incurring this liability.

11. What is Stare Decisis?

Stare Decisis is a theory of precedent, which means to stand by previousdecisions in Latin. This is the technical name of the doctrine of precedent.

12. What does limited liability mean in the context of Corporate Law?

A shareholder has limited liability in the sense that they can only lose their capitalinvestment and/or the amount of the price of the shares for which they have notpaid.

13. State the purpose of damage awards in Tort and Contract.

Tort law – to place the injured party in the same position had the tort notoccurred. Contract law – to place the injured party in the same position had thecontract been completed.

14. What is the adversary system in the Canadian legal system? Define andexplain.

In civil disputes it is up to the parties, not the court, to initiate and prosecutelitigation, to investigate the pertinent factors and to present proof and legalarguments to the decision making tribunal. Fight theory by Jerome Frank statedthat the basic concept is that presentation and prosecution is made by two selfinterested parties, with the court acting as an essentially passive arbitrator.

3 assumptions: 1) truth and justice is more likely to emerge, 2) the most accepteddecision will come from a neutral person conducting a court, 3) the opportunity tobe heard. 2 problems: 1) the parties are unequal, 2) a self-interest group cancover some evidence themselves, so there isn’t a consistent adversary system.

15.What is meant by the “Standard of Proof”? Name the civil Standard ofProof and criminal standard of proof.

The Standard of Proof is a set of specific elements that must be proven withintort law. The standard of proof in civil law is the Balance of Probabilities (need amajority of >50%) which requires that intention, causation, and proscribed harmbe proven. (Standard of Proof in criminal cases is “guilty beyond a reasonabledoubt - >90%).






16. What does the phrase Sine Qua Non mean and in what context was itused during this course?

“Sine Qua Non” means without that nothing and is also referred to as the “but for”test. If the accident would not have occurred but for the defendant’s negligence

then his conduct is a cause of the injury. The act of the defendant must havemade a difference, but it doesn’t have to be the cause.

17. Name the four basic duties an agent owes to his principal.

- Duty to Comply With the Contract- Duty of Care- Personal Performance- Good Faith

18.What is the “liberal” approach to contractual interpretation?

It’s “an approach that looks to the intent of the parties and surroundingcircumstances, but does not ignore, the importance of the words actually used”.It stresses the circumstances surrounding the contract, the negotiations leadingup to it, the knowledge of the parties, and any other relevant facts, thus it canlead to endless speculation of intent.

19.Briefly define “Gatekeeper Liability” as it exists in corporate law.

The purpose of gatekeeper liability is to control wrong doings by companies bymaking the directors liable for those duties owed to shareholders, employees,creditors, competitors, government, and the community at large. The category ofpersons to whom a duty is owed has expanded and the types of breaches ofoffences have increased and exposure of directors is no longer limited tofinancial liability. The rationale was that the normal sanctions and liabilitiespinpointed on the business or actual wrongdoer were insufficient in reducingcorporate wrongdoing.

20. What does the term Ultra Vires mean?

Ultra Vires in Latin means “beyond the power”. Delegated bodies can onlycreate legislation within the jurisdiction given by statutes. So whenever an act orprovision is passed by parliament or a provincial legislature and they are foundby the courts to be outside the legislature’s jurisdiction, the act or provision isultra vires therefore void.





21. What is the Corporate Veil?

A corporation has a separate existence from its shareholders. The separateentity principle gives rise to the limited liability of the corporation. It acts like aprotection towards individuals within a corporation.

22.What does “piercing the corporate veil” mean and when will a courtpierce it?

To pierce the corporate veil means to ignore the separate entity principle with theresult that the individuals who control the corporation are responsible for theiracts personally. The court will pierce the corporate veil in: 1) Taxation situations

– statutory piercing, 2) agency law, 3) fraud, and 4) residence of the corporation.

23. Name the 6 elements necessary to establish a contract.

Offer, Acceptance, Consideration, Capacity, Intention to create legal relations,Legality of the contract.

24.What is the “Doctrine of Substantial Performance”?

The doctrine of substantial performance asserts that the promisor is entitled toenforce a contract when it has substantially performed, even though itsperformance does not comply in some minor way with the requirements of thecontract. The promisor’s claim is, however subject to a reduction for damagescaused by its defective performance to avoid its own obligations.

25. Briefly define the difference between a void and voidable contract.Discuss how a holding by a court that a contract is void or voidable issignificant to innocent, subsequent, third parties for value.

Void contract – it was never formed in law, thus there is no agreement.Title/ownership of property at common law would not pass under void contractsand the initial party will be compensated for their loss from innocent subsequentthird parties for value, whom left without remedy.

Voidable contract – a party has entered into a contract under some condition,either misapprehension or misrepresentation, that will render it unfair if thecontract terms were enforced against them. Equity determines the contractvoidable and will either set it aside or rescind it to restore the parties to thepositions they would have been in had the contract not been made at all.Innocent, subsequent third parties for value are treated more fairly under equityand are not required to return the goods to the initial party.






26. Define consideration as it exists in the Law of Contract.

Consideration is the price for which the promise or act of the other is bought.When people make a contract it is about the exchange of money, goods, or

services and an exchange of promises. The matter of exchange is calledconsideration.

27.Define “wrongful dismissal” in the context of employment Law. What isit? On what basis, if any, are damages awarded?

Wrongful dismissal is when an employer has broken a contract and fails to givethe employee the notice to which he/she was entitled. In an employmentcontract, we must ask what amount of damages will compensate the employeefor failure to receive the required notice of termination. For instance, the courthas to determine what length of time would have been reasonable notice in the

circumstances.

28. What is subordinate legislation? Give an example asubordinate/delegate body.

Subordinate legislation is legislation made by a person or body other than thesovereign parliament by virtue of power confirmed either by statute or bylegislation which is itself made under statutory power. School board; they makeregulations, order, rule etc…

29. What is standing?

People need standing to sue. That means the litigant or in particular the plaintiffmust have a special interest and right to be indicated. The reason for theconcept of standing is to prevent frivolous claims.

30. What is agency by estoppel? What is apparent authority in agency law?Give three examples of corporate law principles or issue upon which ithas an influence and discuss that influence.

Agency by estoppel arises when the agent’s authority is merely apparent, notreal. When one party allows another to believe that a certain state of affairsexists and the other person relies upon that belief, the first party will be preventedfrom afterwards stating that the true state of affairs was different. Agency byestoppel has relevance to the law of agency in two types of cases: apparentauthority and holding out. An agent may acquire apparent authority from a pastmanner of transacting business with the principal or from trade custom. Suchcircumstances may make it appear to third parties that the agent has authority forthe contract in hand. In fact, however, he/she does not have any real authority





for the purpose. There existed no understanding between the agent and theprincipal, express or implied, granting this authority.

Apparent authority is manifested in 3 ways: 1) the effect of publicly filingdocuments – if the documents prohibited either the corporation or one of its

officers from carrying out certain acts, a third party could not rely upon whatotherwise might be the officer’s apparent authority to perform those acts, 2)indoor management – a person dealing with a corporation is entitled to assumethat its internal procedural rules have been complied with unless it is apparentthat such is not the case, and 3) Pre-incorporation contract – a) the corporation isbound by the contract and is entitled to the benefits thereof as if the corporationhad been in existence at the date of the contract and had been a party thereto,and b) a person who purported to act in the name of or on behalf of thecorporation ceases…to be bound by or entitled to the benefits of the contract.

31. What is the Parol Evidence Rule? Identify 3 exceptions to it.

A rule preventing a party to a contract from later adding a term previously agreedupon, but not included in the final written contract, to contradict the contract. 3exceptions: 1) the rule would not be applied to a written contract that neverembodies all the terms, 2) it does not hinder the interpretation of express termsalready in the contract, 3) the rule does not exclude evidence of an oralagreement that the parties may reach after they have entered into the writtenagreement.

32.What does the term “intra vires” mean?

Intra vires means within the power, or anything within the law.

33.Canada is described as having a constitution that is “Quasi Federal.”What does this mean?

This means that Canada is a country that has some federal aspects as well asnon-federal aspects. Canada is referred to as being a federal country in the BNAact, there are 2 levels of government, and the lieutenant governor is not just afederal official, rather he/she posses all the prerogative powers of the Crown.However Canada is not federal country in the fact that judges on the SupremeCourt of Canada are appointed by the prime minister, the federal governmentgives power to the provincial power, and the Charter of rights is adjudicated bythe federal government.

34. What is a condition subsequent?

Condition subsequent is an uncertain event that brings a promisor’s liability to anend if it occurs.






35. What is a condition precedent?

A futur e or uncertain event that must occur before the promisor’s liability is

established.

36.What is “non est factum” in contract law?

In Latin it means, “It’s not my doing”. It’s a clause that helps illiterate people toavoid contractual obligations, because it is grounds to impugn a contract fromcontractual liability.

37. What are the 4 basic categories for discharging a contract?

discharge by performance

discharge by agreement discharge by frustration the contract provides for its own dissolution

38. What are the four basic limitations on the separate entity principle incorporate law?

1. Taxation – a Corporation is eligible to enjoy a lower tax rate on its first$200,000.

2. Residence – the residence of the controlling shareholder may determine thecompany residence.

3. Agency – the agent cannot represent a shareholder unless a shareholderagreement has been signed.4. Fraud – when fraud has been committed the court will disregard the

separate entity principles, but will see the directions have committed thefraud.

39. What is convention in the constitutional context? (What is a Conventionof the Constitution)

Conventions are traditional and generally accepted principles that guide politicalactors in how they function. However, conventions are not enforceable by

courts, for example responsible government.

40. What is the J.C.P.C?

Judicial Committee Privy Council. They were the final appellate court before1949. It was comprised of law lords from the UK that listened to appeals fromoverseas dominions and colonies.





41. What is a Pre-trial Conference?

The litigant and the lawyers meet in front of a judge before the trial (not the same

judge that hears the case). The lawyers present a brief on law to the judge inadvance. The judge will tell the parties what their view of the outcome. It is doneto promote settlements and free-up courts.

42.What is “Legal Realism?”

It looks at why legal decisions are made in the legal system. It’s a perspective ofexplanation not a perspective of evaluation. Legal realists look at cases in moredepth.

43. Why is the case Donoghue v. Stevenson significant?

This case is significant because it established the neighbour principle, whichclarified to whom we owe a duty, by rejecting the need for a contractualrelationship for negotiation to exist. You owe a duty of care to your neighbour,and thus don’t need a contract. So third parties are permitted without a contractto sue in tort for negligence. The neighbour principle states that we owe a dutyto persons who are so closely and directly affected by my act that I oughtreasonably to have them in contemplation when I am directing my mind to theacts or omissions, which are called into question. The House of Lords decidedthat manufactures are liable in tort for damages when their products are mostlikely to be used without immediate examination. Manufacturers owe a duty ofcare to consumers and thus they could now sue manufacturers rather than theretailers. Previously, the consumer did not have a contract with the producer andthus could not sue them in tort, however they couldn’t really blame anyone elseand the producer would have the most money.

44. What is rectification in law?

Rectification is a correction of a written document to reflect accurately thecontract made by the parties. The rectification will be made if three conditionsare met: 1) there is a complete agreement between the parties free fromambiguity, 2) parties didn’t engage in further negotiations, 3) the change in thewritten document appears to be an error in recording.

45. What is a court of “first instance” and give 3 examples.

It is the courts where action must first originate, for example, small claims court,family court, juvenile court, police court, traffic court.






46. What was the holding in Hodge v. The Queen and why is it significant?

Provinces are not delegates of the federal parliament, but in their own spheres

they are supreme. It was significant because it allowed provincial legislation tobe supreme within the province.

47. What are the four roles of the court?

Arbitrator of the constitution Interpreter of the legislation Arbitrator of private parties Protector of civil liberties

48. Explain the difference between a Warranty and a Condition in respect of

the Law of Contract. What are the consequences of this classification?Illustrate with appropriate examples.

Essential terms of a contract are known as conditions and non-essential termsare known as warranties. The breach of a condition relieves the injured partyfrom further duty to perform the contract, if they so elect. For example, it is animplied condition that the seller has a right to sell the goods. The breach of awarranty does not relieve the injured party from the bargain, they must performtheir side, but they may sue for damages. For example, it is implied that thebuyer of goods will have and enjoy quiet possession.

49. What is the Civil Law System?

It is the system of law derived from roman law that developed in continentalEurope and was greatly influence by the Code Napoleon of 1804. The civil lawtheory is that a court always refers to the code to settle a dispute. If the codedoes not seem to cover a new problem then the court is free to reason byanalogy to settle the problem from general principles in the code. In theory, alater court need not follow the earlier reasoning in a similar case.

50. What is a fiduciary and give an example?

A person holding a character of a trustee or a character analogous to a trustee inrespect to the trust and confidence involved in it and the scrupulous good faithand candour which it requires. Or it is defined as a person having duty createdby his undertaking, to act primarily for another’s benefit in matters connected withsuch undertaking. For example, a director has a fiduciary duty to theorganization to avoid any conflicts of interest between the director’s personalinterest and that of the corporation.





51.What is “legal positivism?”

Legal positivism seeks to answer what is the law, as opposed to what it should

be. Positivism is a philosophy of analysis and can be considered as an objectivetest to create certain knowledge. Positivists are concerned with humanconditions and moral values. They disclaim the concern whether law is good orbad and suggest no ethical evaluation of the law. The ultimate goal is tounderstand and identify what is law.

52.What is “Responsible Government” in the constitutional context?

It provides linkage between the legislative and the executive of the parliament. Itis to ensure that an element of democratization to executive government at leastin election of executive government and at least to the degree that the legislative

branch is elected according to democratic principles. In Canadian Constitution,responsible government means, a) the appointment of persons to the executivewho sits in the elected assembly and who have the supported elected assembly,b) the analog to this is that the Monarch or representative in giving assent mustfollow the advice of the executive rather than his or her own personal bias.

53. What are 3 bases for professional liability?

Criminal liability, professional liability, contractual liability, fiduciary liability, andtort liability.

54. What are the 3 primary duties of a Director of a Corporation and towhom are they owed?

The primary duties of a director are duties of care and skill and the duty of goodfaith which deals with: a) the duty to disclose an interest in contract with thecompany and b) the interception of corporate opportunity. These duties areowed to the corporation, shareholders, and the public. However, they can alsobe owed to employees, creditors, competitors, and the government.

55.What are “the articles of incorporation” as used in the law ofcorporations? Name four basis features of the “Articles ofIncorporation”.

The articles of incorporation are the basic constitutional document ofcorporations incorporated in most Canadian jurisdictions. Under the articles ofincorporation system, persons who wish to form a corporation sign and deliverarticles of incorporation to a government office and in turn are issued with acertificate of incorporation. Features of the “articles of incorporation” include:name of the corporation, place where the registered office is situated, classes






and any maximum number of shares that the corporation is authorized to issue,rights and restrictions attached to each class, any restriction on the transfer ofshares, number of directors, any restrictions on the business carried on.

56. What are the 2 amendment formulae identified in the Constitutional Act

1982? (2 amending formulae in respect to the entrenched aspects of theCanadian Constitution?)

The 7-50 rule - it requires the resolution of the Senate and House of Common,and resolution of legislative assembly of at least 2/3 of the provinces (7provinces) with 50% of the population in aggregate of all the provinces.Unanimity provision – requires the unanimous approval of all the provinces. Nochange should be made to the Constitution unless there’s agreement of all 11legislatures (parliament and the 10 legislatures).

57. What are the 2 basic legal rules concerning delegate bodies creating

subordinate legislation?

Important regulations require the approval of the cabinet in the form of an order-in-council. The agency itself drafts these regulations and the ministerresponsible for the agency brings them before the cabinet. Lesser regulationsmay be authorized by the minister, the head of the agency, or even a designatedofficer of the agency.

58. The Sale of Goods Act applies to certain transactions. Describe thetransactions as identified in the Act.

For the sale of goods act to apply the contract must be dealing with thetransaction of “goods”, which is defined as “all chattels personal (tangiblepersonal property), other than choses in action and money.

59. In an Insurance Contract, what is an insurable interest?

Insurable interest separates insurance from a wager. Insurable interest existswhere the insured derives a financial benefit in the continuing existence of theinsured object or suffers a financial loss from the loss of the object.Compensation will be paid by the insurer to the individual named as abeneficiary.

60. What is an injunction?

An injunction is a court order restraining a party from acting in a particularmanner, such as committing a breach of contract. For the remedy to beavailable, the courts require the contract to contain a negative covenant, apromise not to do something.





61. What is a presumption in Tort Law or Contract Law? (What is apresumption in law? Give two examples)

With respect to intentional torts, it is presumed by the courts that the element ofintention exists because it would be difficult for the plaintiff to prove the defendanthad intent. Thus, because the plaintiff is taken to have established the element,it is up to the defendant to enter proof to reverse the presumption or conclusion.

With respect to contracts, the three elements: intention to create legal relation,capacity, and legality of the contract are all presumed by the courts. Intention tocreate legal relations is most easily refuted in family cases because the situationis very informal and nothing is generally documented. With capacity it ispresumed that the promisor has the ability to bind him/herself in contract. Finally

it is assumed that the contract is legal; the contract neither offends public policynor violates any law.

62. Give 2 examples of procedures in our legal system in civil cases thatmight be said to encourage people to consider settlement rather thanproceed to trial.

Pre-trial conference and the examination for discovery.

63. Define 2 approaches employed by the Courts to interpret statutes.

Plain meaning approach – dictionary definition, or the liberal approach – purposive, they look at the object of the statutes in the context it was create. Thegolden rule is to use the plain approach and if necessary the liberal approach.

64. What is the principle of remoteness in the Law of Contract?

The issue is just like in tort; it is whether the damages were foreseeable at thetime of the contract. If a special use is to be made out of an item sold, that has tobe communicated at the time of the contract.

65. Define the term of subrogation as it exists in Insurance Law.

The right of an insurer who has paid a claim to “step into the shoes” of theinsured and sue the person responsible for the loss. (Person A gets hurt byPerson B; Person A receives compensation from Insurance Company. A cannotsue B because insurance compensation is adequate, however, Insurance Co.can sue B to recoup the loss)






66. What principles of law are established by the case of Hedley, Byrne &Co. Ltd. V. Heller & Partners?

This case established the principle of expanded liability to third party fornegligence misrepresentation. The result of the case seems to be that anyone

who makes a misstatement is liable for losses suffered by a wider group thanthose with whom one has a direct contractual/fiduciary relationship. What HedleyByrne did is achieved the neighbour principle with respect to professional liabilityand most importantly, in terms of negligence misrepresentation.

67. What is the remedy of specific performance?

The remedy is an order requiring a defendant to do a specified act (whenfinancial compensation is inadequate) usually to complete a transaction, forexample to finish a building contract. “The remedy of specific performance ismost often applied to contracts for the sale of land. Courts granted specific

performance originally on the argument that each piece of land is unique, andthat consequently money damages are an inadequate remedy.”

68. What is a class action?

It is an action in which an individual represents a group and the judgmentdecides the matter for all members of the class at once. Courts are reluctant inhaving class actions because it takes away an individual’s right to litigate his ownclaim. However, this types of action does free the courts of many individualcases.

69.To whom are “costs” awarded in a court action?

Costs are awarded to the winner, whether it is the plaintiff or the defendant,because they shouldn’t have had to go through the court to reach settlement.

70.What is an “assignment” in Contract Law?

An assignment in contract law is the transfer of contractual rights.

71. What is a shotgun clause and where might you find it?

A shot-gun clause gives a party the option to buy or sell shares at a specified fairprice per share. This has the appearance of fairness because it allows the partyto extricate themselves (especially if they are “locked in and frozen out”) and it isfair in that the price offered by the other party will be fair because they don’t wantto be taken advantage of since they do not know if the party will buy or sell. (like“you cut, I choose”) This is often the case with minority shareholders: anindividual has 60% and the other has 40%, or 2 people together have 60% of theshares and work together to oppress the individual with only 40%. However, the





shot gun clause isn’t always fair to everyone, especially if one party isundercapitalized. If you have no money then you can’t realistically buy them out.In those cases the price per share will be determined by someone else so thatthe undercapitalized will be considered.

72. What are 3 implied conditions in the Sale of Goods Act?

Seller’s title – seller has right to sell the goods, description – goods sold bydescription will conform to the description, fitness – the goods are of a type thatis suitable for the purpose for which they are bought (suitability and quality), saleby sample – when a sample has been provided, the actual goods supplied willcorrespond to the sample in type and quality.

73. What is a contingent fee in relation to legal services and when is itusually used?

Under a contingent fee arrangement, “the lawyer agrees to act on the basis tha t ifthe client is successful the lawyer will take as a fee a certain percentage of theproceeds of the litigation, and in the event that the client is unsuccessful thelawyer will make no charge for the services rendered. It is usually used when itis the only practical way of brining an action. It is usually a fairly high percentageof the winnings because you are overpaying the lawyer for the risk that nothingwill be paid if you lose.

74. Why are tort damage awards greater in the U.S.A. as opposed toCanada?

For 3 reasons: a) Pain and suffering rewards in Canada have been subject to alimit by the Supreme Court in 1982 of 100,000 – they feel for the victims but anyreward is arbitrary. Since then it has been indexed and the current maximum is300,000. b) Juries make tort awards in the United States; in Canada these donot exist. Juries tend to be more emotional and as a result will award largersums. c) Americans have jurisprudence that allows for higher rewards of punitivedamages that can also be rewarded by the juries.

75. Who was the Emperor Justinian and what was his pre-eminent legalachievement?

Emperor Justinian was the famous emperor of the Eastern Roman Empire in the

6th

century A.D. He developed the Justinian Code, which was inherited by thewhole of continental Europe and formed the foundation for most of the civil lawlegal system.

76.Describe what the “lapse of an offer” in contract law means, and thenbriefly define when an offer may lapse.

A lapse of an offer is the termination of an offer when the offeree fails to accept itwithin a specified time, or if no time is specified, within a reasonable amount of






time. An offer may lapse when: 1) the offeree fails to accept within the timespecified in the offer, 2) the offeree fails to accept within a reasonable time, if theoffer has not specified any time limit, or 3) either of the parties dies or becomesinsane prior to acceptance. When an offer has lapsed, the offeree can no longeraccept the contract even if he is unaware that it has lapsed; it has become void

and no longer exists.

77. What is the Indoor Management Rule?

Indoor Management rule is the principle that a person dealing with a corporationis entitled to assume that its internal procedural rules are complied with unless itis apparent that such is not the case. The internal issue is the effect on aninnocent third party if the acts have been performed in an irregular manner. Thesimilar authority on this point is the case of the Royal British Bank v. Turquand.In the absence of notice of the irregularity or of suspicious circumstances,everything that appears regular on its face may be relied upon by an outsider and

will bind the company. An innocent third party may rely on the regularity ofcorporate act just as he may rely on the apparent authority of an agent.

78. Who was Jeremy Bentham and for what principle is he best known?Define it.

Jeremy Bentham is known for the principle of utility. The principle states that thegoal of society should be to increase the sum total of human happiness, “thegreatest happiness of the greatest number.”

79. What is the Royal Prerogative?

The royal prerogative is the residual of legal power. It is residing in the crownand passing through the crown to its representative, the Governor Council andthe provincial legislature. The royal prerogative powers that currently exist,although they have both been taken away by statute include: 1) the power toappoint the prime minister or premier, 2) the power to dismiss the prime ministeror premier, 3) the power to declare war, 4) the power to appoint an ambassador,and 5) the power to dissolve the elective of assembly.

80.What does the term “Special Damages” in tort and contract law refer to?

Special damages are those damages that can be easily calculated, such aswage losses and medical expenses.

81. Why is the Judicature Act Significant?

In 1865, in response to Charles Dickens commentary on court systems - BliqueHouse, they created the judicature act which allowed for one set of courts





simultaneously (equity and common law). However, both bodies of principlesremained separate. This was applied in Canada and Manitoba.

82. What is the difference between holding property as joint tenants ratherthan tenants in common?

If you are a joint tenant and one of the joint tenants dies, then the interest of theceased joint tenant get passed on to the surviving joint tenant. If a tenant incommon dies, you are one of any number of owners in the property, the interestof that deceased tenant in common does not transfer automatically to thesurviving tenants in common, but rather the property will devolve according to thewill of the deceased or according to the intestate succession act.

83.What is Wheare’s definition of federalism, which he calls the federalprinciple?

The federal principle is the methods of dividing powers so that the general andregional governments are each, within a sphere, co-ordinate and independent.

84. What is a legal liability and give an example.

Liability – a right recognized by law which can be enforced against a legal personby court process.

85.What is the difference between Hume’s Physical and Normative laws?

Physical laws are laws of nature which we learn in studying the natural scienceslike physics and chemistry. Normative law rules governing human conductcreated and/or enforced by human beings. A person may break normative lawsand face the consequences but we cannot break physical laws.

86.What is the “cabinet” in Canadian constitutional law?

Cabinet is made up of members of House of Common and Senate. It is an activepart of the Executive. The PM is the head of the cabinet. The monarch controllegally executive power while the Queen vested the formal executive power. Thecabinet is not a democracy because it is a one person show, the Monarch onlygets advice form the PM.

87.What is “legal aid”?

Legal assistance provided for poor litigants. This service is only available fordomestic and criminal claims.

88.What does “delgates non potest delagare” mean – in what context is itused?






One of the institutional sources of law is delegated body. Delegated bodies havebeen given power and can create law within the jurisdiction given by the statutes.Delegates non protest delegare means “delegates can’t further delegate”.

89.What does the term “collateral agreement” mean?

An entirely separate undertaking which the parties were agreed upon and whichthey did not incorporate in their written contract, because the written contractseemed an inappropriate place for it.

90. In what situations can a contract of a minor be enforce against him andto what extent?

A minor must pay a reasonable price for all necessaries of their purchase, forexample shelter, food, and clothing. Beneficial contract of service: a minor is

bound to the terms of a contract of employment when it is found to be for hisbenefit.

91. In what situations is the doctrine of frustration applicable to discharge acontract?

Discharge by frustration occurs in two types of situations where the inability toperform is not their fault: a) Where performance has become literally impossible,or b) where performance is physically possible but performance would have a fardifferent meaning for the parties then that which they conceived at the time oftheir agreement. The result of frustration is that the contract is discharged andthe parties are relieved of further performance, any benefits already exchangedfall where they lie. There’s a bit of rough justice, so as a result, the Englishparliament also passed the frustrated contract act which allows for thereallocation of the benefits already exchanged.

92. List 10 criterions an individual should keep in mind when selecting akind of business organization.

Limited liability Estate planning Borrowing requirement

Employees Flexibility of structure Perpetual existence Number of proposed proprietors

Relationship of proposedproprietors

Applicable government

requirements available grants Costs Income tax consideration

93. What is the last Canadian province to have an upper house?

Quebec was the last Canadian province to have an upper house in 1966.





94. What are the 3 authoritative sources of constitution?

Legislative sources – a) the UK parliament, b) the Canadian parliament,and c) the provincial legislature which provinces can create their own

constitution. Judicial decision – are sources of constitution that involve key sections of

constitutional legislation as interpreted by the court. Royal prerogative power – is the king or queen’s ability to make law. This

is residual of power.

95. List 4 categories of the persuasive sources of constitutional law?

Conventions, learned author’s writings, parliamentary privilege or custom ofparliament, decisions from other jurisdictions.

96. Name 4 intentional torts

Assault and battery, fraud, false imprisonment, intentional infliction of mentalsuffering.

97. Name 4 ways in which the relationship of agent and principle can beestablished.

By express agreement - an agent agreement may be oral, written or inwriting under seal.

By ratification – a person purports to act as an agent knowing she ahs no

authority but hoping the proposed principal will alter the contract. By estoppel – the agent’s authority is merely apparent and not real. By necessity

98. What is the ratio in the Maritime Bank case?

The lieutenant governor is not merely a federal official; rather the LieutenantGovernor passed all the prerogative power of the Crown. This is the indication ofan equal and co-ordinate status between both levels of government.

99. What are the 2 component parts of the legislature in MB that must

approve legislation

Legislation assembly and the Lieutenant Governor

100. Explain the principle of Res Ipsa Loquitur, and give an example of afact situation where it would apply in a negligence action.






It means the facts speak for themselves. The injured party need only establishthat the defendant cause the injury. For example, the plaintiff was struck by abarrel while standing in a street. It fell from the defendant’s supper window. Theconclusion, unless the defendant could prove otherwise, is that the most likelycause of the negligent conduct was the defendant.

101. Describe 3 ways that civil liberties were protected prior to theCharter of Rights & Freedom.

Democratic system – people can elect the political leaders. If the electorabuses the use of power, they won’t be elected again.

Independence of the judiciary – judges are not responsible to legislativebodies for their decisions

The common law – if somebody does something to violate the civil liberty,they can be sued.

102. Name 2 major problems of enforcement.

Requirement of writing – relates to the statute of frauds which wasrepealed in Manitoba.

Ambiguous meaning – relates to uncertainty and void contract Capacity The privity of contract

gmgt 3300 past exam questions

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