5.Assume that you have a civil case in Prince Edward Island that has gone through a trial in Prince Edward Island Supreme Court. Your case then proceeds through an appeal to the Prince Edward Island Court of Appeal. What court is the next level of appeal (after the Prince Edward Island Court of Appeal)? (2 points) Answer: __ (a) Tax Court of Canada __ (b) Small Claims Court - Prince Edward Island __ (c) Supreme Court of Canada __ (d) Federal Court of Appeal __ (e) Supreme Court of Nova Scotia ------------------------------------------------------------------------------------------------------------------------------- 6.In the answer to question 5, what restrictions, if any, are there on appeal to the next level of appeal? (2 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 7.Which of the following could be claimed as court costs in a legal proceeding? Check all that apply. (2 points) Answer: __ (a) Expert report fees __ (b) Filing fees __ (c) Legal fees __ (d) Service of documents fees __ (e) None of the above ------------------------------------------------------------------------------------------------------------------------------- Torts 8.Hopyard is a brew pub in Charlottetown, Prince Edward Island. They have several taps featuring local beers, one of which is Upstreet Craft Brewery. They also feature several beers in bottles. Rihanna is in Prince Edward Island for the summer and goes to Hopyard where she orders a bottle of Upstreet Commons beer. She is served her beer in the bottle. She chugs half the bottle of beer, but then notices something crunchy in her mouth. After spitting out what is in her mouth, she notices what appears to be a chewed up worm. She immediately runs to the bathroom at Hopyard and vomits. She attends at the emergency room of the Queen Elizabeth Hospital and has examinations and x-rays performed. There are no obvious injuries and she has no long term ill-health effects. She is, however, experiencing some shock and anxiety from the experience. What type of liability might Upstreet Craft Brewery be subject to? (2 points) Answer: __ (a) Manufacturer's liability __ (b) Breach of contract __ (c) Restraint of trade __ (d) Sole proprietorship __ (e) Consideration ------------------------------------------------------------------------------------------------------------------------------- Contracts 9.Pursuant to the Statute of Frauds, which of the following must be in writing and signed by the parties in order to be enforceable? Check all that apply. (2 points) Answer: __ (a) Contract concerning an interest in land __ (b) Promise made by an Executor to settle a claim our of her own personal estate __ (c) Guarantee __ (d) Assault __ (e) All of the above ------------------------------------------------------------------------------------------------------------------------------- 10.List each of the elements of a binding contract. (6 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 11. Define "counteroffer". (2 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 12. Discuss the legal significance of a counteroffer on a prior offer. (2 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 13.Read the following clause: "NOW THEREFORE this Agreement witnesses that in consideration of the sum of one dollar ($1.00) paid by Fred to Gloria (the receipt and sufficiency of which is hereby acknowledged) and of the mutual covenants and agreements herein contained the parties do hereby covenant and agree with each other as follows:" This clause is an example of: (2 points) Answer: __ (a) Consideration clause __ (b) Manufacturer's liability __ (c) Defamation __ (d) Acceleration clause __ (e) Limited liability ------------------------------------------------------------------------------------------------------------------------------- 14.Justin Trudeau wants to purchase a used car. He finds a private seller, Vlad Putin, on Kijiji and then visits Vlad and offers to purchase a 2019 Honda Civic for $23,000. Vlad agrees to sell the car to Justin for $23,000 and he prepares a contract. Justin plans to return within 3 days with the money at which point Vlad will give him the keys to the car. At the bottom of the document is the following signature block, which Justin and Vlad both sign and a witness signs in the witness boxes. Red seals are affixed beside their signatures. Justin does not provide any money or deposit to Vlad; he simply signs the document. There is no consideration clause in the document. SIGNED, SEALED, and DELIVERED in the presence of: Jane DoeJustin Trudeau WitnessJustin Trudeau, Buyer SIGNED, SEALED, and DELIVERED in the presence of: Jane DoeVladomir Putin WitnessVladomir Putin, Seller Does this contract require consideration? If not, why not? (2 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 15.Assume that your company, BELL, wants to enter into a contract with a regional cell service provider. Your company wants to ensure that the contract with the regional cell service provider is for a fixed term of 5 years, and cannot be terminated before that first 5-year term expires. Further, you want to ensure that after that first 5-year term the contract is renewable for additional 5-year terms unless terminated by one year's notice. BELL does not want the parties to have the ability to terminate the agreement after only one year. The termination clause should only apply to the 5-year renewal periods, not the first 5-year period. Which of the following clauses will correctly capture what BELL wants in the contract. (2 points) Answer: __ (a) "This Agreement shall continue in force for a period of five years from the date it is made, and thereafter for successive five year terms, unless and until terminated by one year's notice in writing by either party." __ (b) "This Agreement shall continue in force for a period of five years from the date it is made and thereafter for successive five year terms, unless and until terminated by one year's notice in writing by either party." __ (c) "This Agreement shall continue in force for a period of five years from the date it is made, and thereafter for successive five year terms unless and until terminated by one year's notice in writing by either party." __ (d) "This Agreement shall continue in force for a period of five years from the date it is made and thereafter for successive five year terms unless and until terminated by one year's notice in writing by either party." ------------------------------------------------------------------------------------------------------------------------------- 16.Read the following clause: "For a period of two (2) years after the Closing Date and within a radius of 30 kilometres of Charlottetown, the Seller shall not organize or participate in the organization of any firm, partnership, corporation, joint venture, sole proprietorship or other business entity, if such firm, partnership, corporation, joint venture, sole proprietorship or entity is engaged or to be engaged in any similar business, conduct or activity in competition with that of the Company or the Purchaser." This clause is an example of: (3 points) Answer: __ (a) Non-solicitation clause __ (b) Non-competition clause __ (c) Confidentiality clause __ (d) Acceleration clause __ (e) None of the above ------------------------------------------------------------------------------------------------------------------------------- 17.Serena Williams is a computer scientist. She has started a company that develops software for an interface with cars. She hopes to compete against Apple CarPlay. Serena hired Naomi Osaka as a computer programmer and to interact with car companies to have the software installed on those cars. Naomi is a very efficient worker and has acquired all of the knowledge of Serena concerning the software design. She has also made a significant number of key contacts within the automotive industry. What can Serena do in order to protect the software data that she has developed and to ensure that Naomi does not open a competing business and does not solicit Serena's customers or employees? Check all that apply. (3 points) Answer: __ (a) Draft a contract with a non-solicitation clause __ (b) Give Naomi a raise __ (c) Draft a contract with a confidentiality clause __ (d) Fire Naomi __ (e) Draft a contract with a non-competition clause ------------------------------------------------------------------------------------------------------------------------------- 18.Read the following clause: "For a period of two (2) years after the Closing Date and within a radius of 30 kilometres of Charlottetown, the Seller shall not, directly or indirectly, either individually or as a consultant, contractor, employee, partner, owner, officer or shareholder, or in any other capacity whatsoever with respect to any person, firm, partnership, corporation, joint venture, sole proprietorship or other business entity, engage in or aid, assist or abet others in soliciting any {clients/customers} of the Business." This clause is an example of: (3 points) Answer: __ (a) Confidentiality clause __ (b) Non-competition clause __ (c) Non-solicitation clause __ (d) Guarantee __ (e) None of the above ------------------------------------------------------------------------------------------------------------------------------- Enforceability 19.Which of the following situations can render an agreement unenforceable. Check all that apply. (4 points) Answer: __ (a) Mistake __ (b) Duress __ (c) Misrepresentation __ (d) Confidentiality clause __ (e) Undue influence ------------------------------------------------------------------------------------------------------------------------------- 20.James operates a pizza shop in Charlottetown, Prince Edward Island. The Covid-19 pandemic has resulted in him having to shutter his business temporarily. In the meantime, however, he is still required to pay his business expenses. James has applied to Scotiabank for a business emergency loan to help him through this downturn. Before it will grant a business emergency loan to James, Scotiabank requires certain security, including a Guarantee from an independent person that Scotiabank will review. James asks his father to provide a Guarantee to Scotiabank. His father has significant liquid assets and agrees to provide the Guarantee to Scotiabank. What might Scotiabank do to ensure that the Guarantee is an enforceable contract? (3 points) Answer: __ (a) Grant a cash loan to James __ (b) Tell James to find another bank __ (c) Incorporate a company for James __ (d) Ensure that James' father has independent legal advice with a Certificate of Independent Legal Advice issued by a lawyer __ (e) Make a counteroffer to James ------------------------------------------------------------------------------------------------------------------------------- 21.Which of the following classes of contracts are considered to be in restraint of trade. Check all that apply. (3 points) Answer: __ (a) Agreements between firms to fix prices __ (b) Tender of payment __ (c) Agreements to prevent others from entering a market __ (d) Agreements to injure competition __ (e) Vicarious liability ------------------------------------------------------------------------------------------------------------------------------- Business Relationships 22.Define the law of agency? (3 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 23.Define a "sole proprietorship"? (3 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 24.Define a "partnership"? (3 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 25.Define a "corporation"? (3 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 26.Define "limited liability" as it relates to shareholders of a corporation? (3 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 27.In the following diagram, who are the shareholders (or owners) of the corporation? (3 points) LindaJohn 75 common shares25 common shares The ABC Company Inc. Answer: __ (a) Linda and John __ (b) Directors __ (c) Officers __ (d) 50% __ (e) 100% ------------------------------------------------------------------------------------------------------------------------------- 28.In the following diagram, what percentage of ownership does Linda have in the corporation? (3 points) LindaJohn 75 common shares25 common shares The ABC Company Inc. Answer: __ (a) 50% __ (b) 100% __ (c) 75% __ (d) 25% __ (e) 0% ------------------------------------------------------------------------------------------------------------------------------- 29.Which of the following can a director of a corporation be found personally liable for? Check all that apply. (4 points) Answer: __ (a) Employee wages in the event of bankruptcy of the corporation __ (b) Source deductions (income tax, employment insurance, Canada Pension Plan) __ (c) Penalties for environmental damage caused by corporate activities __ (d) Unpaid remittances to Canada Revenue Agency for income tax __ (e) Joint Tenancy __ (f) Unpaid remittances to Canada Revenue Agency for harmonized sales tax ------------------------------------------------------------------------------------------------------------------------------- Interests in Land 30.Which of the following acquisitions would first require a non-resident of Prince Edward Island to first seek approval from Island Regulatory and Appeals Commission? Check all that apply. (3 points) Answer: __ (a) Purchase of 2 acres of land with no shore frontage __ (b) Purchase of 6 acres of land with 200 feet of shore frontage __ (c) Purchase of 3 acres of land with 30 feet of shore frontage __ (d) Purchase of 6 acres of land with no shore frontage __ (e) Purchase of 3 acres of land with 190 feet of shore frontage ------------------------------------------------------------------------------------------------------------------------------- 31.Which of the following constitutes an interest in land? Check all that apply. (2 points) Answer: __ (a) Leasehold Estate __ (b) Sole Proprietorship __ (c) Life Estate __ (d) Fee Simple __ (e) Condominium ------------------------------------------------------------------------------------------------------------------------------- 32.Define "fee simple" as it relates to ownership of land? (2 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ------------------------------------------------------------------------------------------------------------------------------- 33. Which of the following are ways in which title to land may be held (owned)? Check all that apply. (2 points) Answer: __ (a) Joint Tenancy __ (b) Tenancy in Common __ (c) Restrictive covenants __ (d) Fixtures __ (e) Expropriation ------------------------------------------------------------------------------------------------------------------------------- 34. What type of land registration system is used in Prince Edward Island? (2 points) Answer: __ (a) Land Titles System __ (b) Registry System __ (c) Letters Patent __ (d) Encroachment __ (e) Easement ------------------------------------------------------------------------------------------------------------------------------- Mortgages 35.Which of the following are covenants of a mortgagor under a mortgage? Check all that apply. (4 points) Answer: __ (a) Pay the mortgage and interest __ (b) Pay property taxes and municipal charges (sewer and water charges) __ (c) Insure the property (fire insurance) __ (d) Not to commit waste and to repair the property if any damage occurs __ (e) None of the above ------------------------------------------------------------------------------------------------------------------------------- 36.Will Smith owns a parcel of land in Summerside, Prince Edward Island. He decides to build his dream house. He hires Chris Rock Construction to build his house. The contract price with Chris Rock Construction is for $2,000,000. Will estimates that his costs for permits, surveying, legal fees and closing costs will be $25,000. Scotiabank has approved mortgage financing in the amount of $1,200,000. Will has saved money from movie roles, and has some money from his spouse, Jada Pinkett Smith, for the balance of funds of $825,000. Scotiabank issues 3 mortgage draws as construction proceeds. Eventually, Chris Rock Construction completes the house and the final draw of financing is issued by Scotiabank when the house is substantially completed on August 31, 2022. Of the total mortgage financing that has been issued ($1,200,000), 15% or $180,000 is retained by Scotiabank as a mechanic's lien holdback (and not paid to Chris Rock Construction). Chris Rock is irate that he will have to wait for the rest of the money for the house construction and demands immediate payment from Will Smith; but Will says nothing, he just slaps Chris across the face. On what date will the holdback of $180,000 be released to Chris Rock Construction? (4 points) Answer: Date: __________________________ ------------------------------------------------------------------------------------------------------------------------------- 37. After 5 years, Will Smith has appeared in a few more movies and has saved enough money to pay off the rest of the balance owing on his mortgage. He decides that he would like to be mortgage free. He asks his bank for the payout amount. Scotiabank cites the payout amount as $250,000 + $3,500 interest penalty = $253,500. The interest penalty of $3,500 amounts to an additional 3 months of interest for Will. Will asks Scotiabank what the interest penalty is for. What enables Scotiabank to charge an additional 3 months of interest? (3 points) Answer: ____________________________________________________________________________ ____________________________________________________________________________