PART 2 - SCENARIO BASED QUESTIONS (20 MARKS)

SCENARIO #1

Mookie McDonald operates a burger joint in Markham called Mookie McDonald's Burgers.He opened Mookie McDonald's Burgers in 2019 as a sole proprietorship.Mookie's father and grandfather also operated restaurants each with their last name McDonald in the restaurant name.So calling his restaurant Mookie McDonald's Burgers was a way tohonourhis own hard work and to follow in family tradition.Mookie'sfavouritecolour is yellow, so he decided his logo should be a yellow M.In the first year of business, Mookie did very well earning a profit of $110,000.00.But in February 2020, Mookie became worried about his business in light of COVID-19.Being a smart business-person, Mookie decided to cut costs.Of his 6 kitchen staff, he decided to terminate 2 immediately.He hiredFariato make a website so his Mookie's customers could order take-out online and he could avoid high fees associated with apps like Uber Eats andDoorDash.When COVID-19 forced the shutdown of restaurants except to take-out, Mookie was able to shift to take-out more easily than his competitors.But by the end of June, Mookie was increasingly worried about his ability to turn a profit in 2020.Mookie owns a home, a relatively new SUV and has $75,000.00 in his bank account.

QUESTIONS (10 MARKS)

1.McDonald's sends a letter to Mookie McDonald's Burgers stating that it must stop using its name and logo because it infringes on McDonald's intellectual property rights.Which intellectual property rights did Mookie McDonald's Burgers violate?

(a)Industrial design

(b)Patent

(c)Copyright

(d)Trademark

2.Mookie does not think that his restaurant's name infringes McDonald's intellectual property.Mookie's best argument would be:

(a)McDonald's customers would not be confused by Mookie McDonald's Burgers - they know they are two different restaurants

(b)McDonald's has exclusive use of the name McDonald

(c)McDonald's is a multi-national corporation and should not be concerned with a small business like Mookie's

(d)None of the above

3.McDonald's best argument for how Mookie McDonald's Burgers infringes its intellectual property is the use of a yellow M for the logo.Why is that?

(a)The yellow M is like the yellow arches that is associated with McDonald's

(b)McDonald's has registered their logo and therefore has exclusive use of it

(c)Both A and B

(d)None of the above

4.How long does McDonald's have the intellectual property protection for its logo?

(a)As long as McDonald's uses it

(b)If registered, for 10 years

(c)It has no protections if it is not registered

(d)A and B

(e)None of the above

5.The website thatFariabuilt for Mookie McDonald's Burgers is an example of which intellectual property?

(a)Industrial design

(b)Patent

(c)Copyright

(d)Trademark

6.In order for the content on Mookie McDonald's Burgers website to get intellectual property protection, Mookie must register the website and its content?True or False

(a)True

(b)False

7.The length of the intellectual property protection Mookie is entitled to for the website and website's content is:

(a)10 years

(b)Life of creator plus 10 years

(c)50 years

(d)Life of creator plus 50 years

(e)70 years

(f)Life of creator plus 70 years

8.The business form that Mookie has chosen is not a wise decision because:

(a)Forming a corporation means Mookie loses all control of the business

(b)Mookie's personal assets are exposed should Mookie McDonald's Burgers not be able to pay its debts and liabilities

(c)Mookie should have found a partner to operate the restaurant with

(d)None of the above

9.In light of all of the facts set out, which business form should Mookie have chosen?

(a)Sole proprietorship

(b)General partnership

(c)Limited partnership

(d)Limited liability partnership

(e)Corporation

10.Which of the following statement is most correct:

(a)The two kitchen staff were terminated with cause

(b)The two kitchen staff were terminated without cause

(c)The two kitchen staff were terminated with cause and are entitled to notice

(d)The two kitchen staff were terminated without cause and are entitled to notice

SCENARIO #2

Thea and Rachel decided to form a partnership for selling gourmet picnic baskets.To raise sufficient capital, they convinced their mothers to invest $5,000.00 each as limited partners.Thea's mother was an experienced restaurateur and watched the business with great interest.On several occasions, she advised them on the business and contacted old business associates to buy surplus stock.She even filled in taking orders in the office when needed.A customer got severe food poisoning after eating sardines supplied in their basket.The customer advised Thea and Rachel they were going to sue.When Thea and Rachel found out, they spoke with their employees to see if they knew how the sardines went bad.One of the employees said they accidentally left the basket in their car for several hours in the scorching heat.When Rachel found out about the lawsuit, she transferred ownership of her cottage to her adult children.

QUESTIONS #2 (10 MARKS)

11.Which of the following statements is incorrect:

(a)The mothers started off as limited partners

(b)The mothers started off and stayed limited partners

(c)The mothers started off as limited partners, but Thea's mother became a general partner

(d)By getting involved in the running of the business, Thea's mother stopped being a limited partner

12.ThePartnership Actapplies to Thea and Rachel if they do not have a partnership agreement.True or False?

(a)True

(b)False

13.Thea enters into a contract with a new supplier without consulting Rachel.Which statement is most accurate?

(a)Because they are in a limited liability partnership, Rachel is not bound by any agreements made by Thea

(b)Rachel has the authority to bind Thea since they are partners

(c)Joint and several liability does not apply to partnerships

(d)All statements are true

14.At tax season Rachel prepares a business tax return and reports all business income and claims all business expenses on that tax return.Why is this not correct?

(a)A partnership is not a legal entity and as such does not file tax returns

(b)Partnership income is reported on the personal tax returns of the partners

(c)Business expenses of the partnership are deducted from the personal income on their personal income tax returns

(d)All of the above

15.Which legal principle means that Thea and Rachel are legally responsible for the actions of their employee that led to their customer getting sick?

(a)Contributory negligence

(b)Vicarious liability

(c)Voluntary assumption of risk

(d)Negligence

16.Why would Rachel transfer ownership of her cottage upon hearing about the lawsuit?

(a)Because she wanted to

(b)Because her personal assets are exposed

(c)Because if she owes money to Thea, Thea could seize her cottage

(d)None of the above

17.What is the legal principle that means the transfer of the cottage is not legal?

(a)Fraudulent conveyance

(b)Land transfer

(c)Title transfer

(d)Unlawful transfer

18.If the customer is successful in suing, what is the maximum amount of money that Rachel's mother could be liable for?

(a)$5,000.00

(b)$10,000.00

(c)$0.00

(d)Unlimited

19.Why did Thea and Rachel not set up their partnership as a limited liability partnership?

(a)Limited liability partnerships are only available to partners who have written contracts and Thea and Rachel do not have one

(b)Only professionals like accountants and lawyers are permitted to have a limited liability partnership

(c)They wanted to write-off their business expenses and a limited liability partnership would not permit that

(d)All of the above

(e)None of the above

20.If Thea and Rachel provide pay in lieu of notice to the employee who accidentally left the basket in their car, what does this mean?

(a)The employee was terminated with cause

(b)The employee was terminated without cause

(c)The employee was constructively dismissed

(d)The employee was discriminated against