ADMS 2610, SECTION A - ELEMENTS OF LAW, MIDTERM EXAMINATION, OCTOBER 27, 2009 INSTRUCTIONS: READ CAREFULLY NAME: STUDENT NUMBER:

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1 ADMS 2610, SECTION A - ELEMENTS OF LAW, MIDTERM EXAMINATION, OCTOBER 27, 2009 INSTRUCTIONS: READ CAREFULLY NAME: STUDENT NUMBER: NUMBER OF QUESTIONS ANSWERED COURSE: A ADMS 2610, ELEMENTS OF LAW PART 1, Tuesdays, 7 pm COURSE INSTRUCTOR: LIANA LING Students will have TWO HOURS, 30 MINUTES (2.5 HOURS) to complete the examination and shall begin the examination when instructed to do so. PLEASE ENSURE YOU SIGN AFTER THE FOLLOWING STATEMENT. FAILURE TO SIGN WILL MEAN THAT YOUR EXAMINATION WILL NOT BE GRADED. "BY WRITING THE WITHIN MIDTERM EXAMINATION I HEREBY AGREE THAT, AT ALL TIMES, I SHALL COMPLY WITH AND BE BOUND BY THE RULES AND REGULATIONS OF THE UNIVERSITY REGARDING ACADEMIC HONESTY, INCLUDING THOSE RULES WHICH PROHIBIT CHEATING AND/OR IMPERSONATING A STUDENT. (Signature of student) When you have completed the examination, quietly provide the examination and the examination booklet to your proctor. LIANA LING (Course Instructor)

2 2 ADMS 2610 SECTION A ELEMENTS OF LAW; MIDTERM EXAMINATION, OCTOBER 27, 2009 PART 1 MULTIPLE CHOICE (TOTAL 15 MARKS) CIRCLE THE CORRECT ANSWER QUESTION 1: The government of the province has introduced a bill into the legislature to make the recycling of household garbage mandatory. Once it has passed third reading, the next step is that it must be A. sent to the relevant committee for clause-by-clause study. B. given royal assent by the Lieutenant-Governor. C. debated in principle by the members of the legislature. D. sent to the Senate for approval. E. amended and prepared for its final reading. QUESTION 2: The professional under a contract implies promises to perform the services required in accordance with the standard for his or her profession, and a failure to do so would constitute. A. a lack of fiduciary duty B. a breach of contract C. professional negligence D. a lack of informed consent E. a breach of solicitor-client privilege

3 3 QUESTION 3: If it were decided to amend the Constitution to make ownership of property a right, it would be necessary to have the agreement of i. at least two-thirds of the provinces, which together make up at least half of the population of Canada. ii. at least half of the provinces, which together make up at least two-thirds of the population of Canada. iii. more than half of the members of the federal Parliament. iv. at least two-thirds of the members of the federal Parliament. v. all ten provinces. A. i. B. ii. C. i and iii. D. ii and iv. E. iii and v. QUESTION 4: Lisa, a three-year-old girl, was having her tonsils removed. Towards the end of the surgery, Dr. Talker answered her cell phone and failed to thoroughly check for sponges in Lisa's throat. Lisa choked to death. Can Lisa's family successfully sue Dr. Talker? A. Yes, Dr. Talker failed to meet the standard of care for a surgeon. B. Yes, Dr. Talker had a duty of care to Lisa. C. Yes, Dr. Talker's negligence caused the injury. D. Yes, damages resulted. E. All of the responses are correct.

4 4 QUESTION 5: The Big Time Construction Company is erecting a large office tower for a major commercial property developer. In the course of construction, a dispute arises as to the timing of cash advances from the developer to finance the next stage of construction. The parties had executed a contract between them which stated that each cash advance from the developer would be provided to the builder after the work on the previous stage had been completed and inspected by the developer. The builder now says that the developer is delaying the inspections and that it cannot carry on to the next stage without the cash advance. The developer says that the builder is deliberately delaying the progress of the construction by not beginning the next stage while it waits for the inspection required to release the next cash advance. The developer intends to take legal action against the builder. A. The developer must use procedural law to sue the builder. B. The dispute between the parties will be resolved by substantive law. C. The contract which the parties made will be interpreted by private law. D. The court will reach a decision in the case using administrative law. E. All types of law except administrative law will apply. QUESTION 6: Jahara Ltd. enters into a contract to supply glass bottles to Brine Co. for its line of baby dill pickles. Since it is a new relationship, both parties want the option to end the contract without problems, so they include a clause that allows either one of them to terminate the contract on 30 days written notice. Jahara finds that Brine Co. is too slow in paying its bills and too quick to question quality. On March 1st, Jahara Ltd. gives Brine Co. notice in writing that the contract will end on March 31st. Brine Co. insists that the 30 days notice clause means 30 working days, not 30 calendar days, and thus Jahara must supply them until April 1. Jahara refuses. Brine Co. loses two weeks of production when its supply of bottles runs out and sues Jahara for breach of contract. In this situation,

5 5 A. This is a mistake of law, specifically the law of contract. B. This is a mistake of fact. C. This is an example of a mistake of utmost good faith. D. This is a case of innocent misrepresentation. E. This is a mistake about the existence of the subject-matter of the contract. QUESTION 7: Johnson became a member of the Book-a-Month Club under an agreement by which members agree to pay for any monthly selection that they have not notified the Club they do not want. Johnson forgets to tell them when he decides he does not want "How to Cook Small Rodents" and the book arrives at his house. A. Since silence cannot be acceptance, Johnson does not have to take the book, but must send it back. B. Johnson must pay for the book. C. Johnson must pay for the book unless he decides to send it back. D. Since silence is not acceptance, Johnson can keep the book and he does not have to pay for it. E. Johnson cannot refuse to pay for the book since consumer protection legislation says unsolicited goods delivered to a consumer create no obligation to pay and no liability for loss or damage.

6 6 QUESTION 8: A computer software company advertised a new organizational program as one of the most "user friendly" programs of its kind on the market. The Smallville police department used the program and, during operation, the program collapsed, losing vital information related to the effectiveness of the department in carrying out its duties. Under the law of contract, what is the software company's position with respect to liability? A. The company is liable for damages because the program promoted as easy has the capacity to collapse and produce this result when used improperly. B. The police department must bear responsibility because it purchased the program and accepted its limitations without question or instruction therefore this is a situation of caveat emptor. C. The company is liable because a promise is a promise in contract law in relation to advertising. D. The company is not liable because it is permitted to use enthusiasm when describing the product and has made no unproven statements in its contract with the police. E. None of the above. QUESTION 9: Mary verbally agrees to purchase Carrie's cottage for $ and gives her a deposit cheque for $ Carrie later sends her a letter thanking her for the cheque and confirming all the details of the contract. Mary later refuses to go through with the deal. A. Carrie can sue Mary for specific performance of the contract since there is a written memorandum of it. B. Carrie cannot sue Mary for specific performance but is entitled to keep the deposit. C. Carrie can sue Mary for specific performance because the deposit was part performance. D. Carrie can sue Mary for specific performance of the contract since there is a written memorandum of it and Carrie can sue Mary for specific performance because the deposit was part performance. E. None of the responses are correct.

7 7 QUESTION 10: In the presence of several witnesses, A verbally agreed to purchase B's farm for $ The next day, B changed his mind and refused to sell the farm to A. On the strength of the verbal agreement of purchase and sale in the presence of witnesses, A sued B for breach of contract and for a decree of specific performance to compel B to sell him the farm. A. The verbal agreement is valid and enforceable if the witnesses testify in court that an agreement of purchase and sale was made. B. The verbal agreement is unenforceable. C. The verbal agreement is void. D. B may successfully plead the Statue of Frauds as a defence. E. The verbal agreement is unenforceable and B may successfully plead the Statue of Frauds as a defence. QUESTION 11: While driving, Charles "rear-ended" Francine's car at a stop sign. A. Charles can be charged by the police with an offence under the road traffic laws. B. Francine can sue Charles in tort for the damage done to her car. C. Francine can only sue Charles successfully in tort if he is convicted of a road traffic offence. D. Charles can be charged by the police and sued by Francine. E. None of the responses are correct.

8 8 QUESTION 12: Nadeem was a blogger who provided comments about corporate performance. On his blog he stated that Widget Company was in serious financial trouble and was preparing to lay off 200 employees. The price of Widget Company's stock immediately dropped $1.50. The law of defamation states that Nadeem is liable for the loss of Widget Company whether or not the statement was true. A. True B. False C. True, only if there is absolute privilege D. True, only if there is qualified privilege E. True, only if there are special damages QUESTION 13: A customer of the bank for which you work as Chief Systems Analyst is suing your bank. The customer alleges that money apparently withdrawn through an automated teller machine from his account must have been removed through a bank error, since he did not do so and no one knows his identification number nor has access to his card. You are to testify as to the security processes in the bank's computer system and the accuracy of the computerized automated teller machine's records. In this role you are called upon as an A. expert witness; you will be giving direct evidence at trial. B. expert witness; you will be giving opinion evidence at trial. C. expert witness; you will be giving hearsay evidence at trial. D. ordinary witness; you will be giving opinion evidence at trial. E. ordinary witness; you will be giving direct evidence at trial.

9 9 QUESTION 14: If you were a judge in a court system in Canada, which of the following would not be a role that you might be called upon to perform? A. Deciding whether or not federal legislation interfered with provincial legislative jurisdiction. B. Deciding whether or not a plumber has the proper qualifications to be granted a licence. C. Deciding whether or not an individual has breached the terms of a contract with another individual. D. Deciding whether a government agency has interfered with the constitutional rights of a citizen. E. Deciding whether or not a company is licensed to print copyrighted material. QUESTION 15: Which administrative tribunals were created to protect consumers and the public? A. Egg Marketing Board B. Canadian Radio-television and Telecommunications Commission C. Securities Commission D. Energy boards E. All were created for consumer and pubic protection. END OF PART 1

10 10 PART 2 GENERAL SHORT ANSWER QUESTIONS (TOTAL 45 MARKS) CAREFULLY READ AND THEN ANSWER ALL FOUR (4) QUESTIONS IN YOUR EXAMINATION BOOKLET. QUESTION 16 (10 Marks): A large part of the body of administrative law is directed at the control or regulation of businessrelated activity, and business persons and corporations alike must be aware of the many administrative bodies or agencies that can impact their operations. Explain why this awareness is important and give three examples of some of the activities that fall under the control of regulatory agencies, commissions, boards, or nongovernmental bodies. QUESTION 17 (10 Marks): There are a wide variety of methods available for parties to use to resolve their disputes, including Alternative Dispute Resolution (ADR). Define arbitration and explain the advantages and disadvantages of a business resolving a dispute by arbitration instead of a formal court proceeding. Provide a specific example of where it would be in the company s best interest to resolve a dispute by arbitration. QUESTION 18 (10 Marks): On June 15 The City of Toronto issued a formal letter to several companies, including HiTech Innovation Ltd., inviting tenders to maintain the City s computer infrastructure. The letter stated: All tenders must be delivered to City Hall by noon on July 20, 2009; no account will be taken of any tender arriving after that time. The Council gives notice that all tenders will be opened and considered at 1 p.m. sharp the same day.'

11 11 On June 16 Mayor Miller made it clear in a widely-reported speech that to help support the Canadian economy and continue to help improve the Ontario job market, the City Council is launching a new policy to never work with companies whose main workforce is located outside of Canada. On July 20, 2009, HiTech Innovation Ltd., whose head office is in Toronto, Ontario but who mainly hires employees in India and did not know of the Mayor's speech, delivered a tender at 11 a.m.; it cost them $2,500 to draw up the tender, and if accepted would have made them a profit of $150,000. On July 21, 2009 they were told that their tender had not been considered, and that the contract had gone to a rival who had submitted a higher bid after the closing time. Advise HighTech Innovation Ltd. QUESTION 19 (15 Marks): Mark and his wife Jean had recently built a country home on a one-acre lot. Initially overwhelmed by the size of the lawn Mark arranged for Stanley, a neighbouring farmer, to cut their lawn with his riding mower. The first cut was difficult and time consuming as there were many tall grasses and weeds to cut through. On this occasion, Stanley charged $300. One week later, Stanley cut the lawn again and charged Mark $200. Reflecting on the substantial expense this represented, Mark thanked Stanley for his services and informed him that he planned to purchase his own lawn mower and take over the job himself. Mark also told Stanley that if he were stuck in the future he would call Stanley to help him out. Shortly thereafter Mark and Jean took a two-week vacation and on arriving home discovered that Stanley had mowed their lawn in their absence. There was an invoice stuck to their door stating $200 for mowing services and $100 for weed spraying. When questioned about the bill Stanley explained that he understood Mark wanted him to mow the lawn if he were unable to. What legal issues does this situation raise and what arguments would be used by the parties involved? END OF SHORT ANSWER QUESTIONS Go on to Part 3 on next page

12 12 PART 3 ANALYSIS OF FACT SITUATIONS (TOTAL 40 MARKS, 20 MARKS PER QUESTION) CAREFULLY READ AND THEN ANSWER BOTH QUESTIONS IN YOUR EXAMINATION BOOKLET. CASE STUDY 1 (20 MARKS) The Golden Sphere Group of Hotels purchased some property in downtown Toronto to build a new luxury 5 Star Hotel. As part of the plans, an old, dilapidated building was to be torn down and a brand new hotel would be built in its place. Golden Sphere Group of Hotels hired Bashett s Wrecking Co. to handle the demolition. On Demolition Day, Bashett s employee, Thompson, used Bashett s crane and wrecking ball to demolish the old building. The controls in the crane and wrecking ball jammed so Thompson accidentally hit Marsden's car, which was parked illegally in a nearby laneway. Marsden s car was totally demolished it. Marsden happened to be a successful financier and due to the accident, was unable to deliver a signed contract in the afternoon which ended up costing Marsden $200,000. Marsden, who fortunately was not in the car at the time, wishes to sue. a. Who should Marsden sue and why? b. If she is successful, against whom will she obtain a judgment, and why is that permitted and reasonable?

13 13 CASE STUDY 2 (20 MARKS) Pop Co. was a small producer and bottler of carbonated beverages and employed the services of Distribu Co. to promote and distribute its products to grocers and restaurants. The sales of Pop Co.'s products had been steadily increasing and they were gaining considerable popularity among consumers. Distribu Co. had an agreement for five years with Pop Co. under which it received a commission of 10% of gross sales revenue as remuneration for its services. As the costs of advertising and promotion increased Distribu Co. wished to renegotiate its arrangement with Pop Co., particularly since its other clients were paying between 25% and 35% for similar services. During the negotiations that ensued, Distribu Co. pointed out that it was no longer profitable to work for Pop Co. Moreover, if Pop Co. did not increase its commission to 30% of gross sales, Distribu Co. would be forced to remove its services. Pop Co. finally agreed to double the commission as it had always been very satisfied with the services provided by Distribu Co. and did not want to have to establish a relationship with a new distributor. Pop Co.'s sales showed a substantial increase over the next quarter. When Pop Co. received the first quarterly commission invoice pursuant to the new arrangement it was astounded to discover the amount represented 30% of gross sales revenue. Pop Co.'s president immediately telephoned Distribu Co. and told its finance officer that had Pop Co. realized how much the new commission would cost in dollar terms he would never have agreed to it as it was both unfair and exorbitant. He also stated that he would pay the invoice but at the long-standing rate of 10%. Discuss the legal issues and arguments which may be raised by the parties involved and the likely outcome if legal action should ensue. END OF EXAM PLEASE MAKE SURE YOU HAVE ANSWERED ALL THE QUESTIONS IN THE EXAM BOOKLETS.