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McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
33) Omicron Inc claims that a municipal by-law violates its right to equality under
section 15(1) of the Charter. Section 15(1) states: “Every individual is equal before and
under the law and has the right to the equal protection and equal benefit of the law
without discrimination” based on various grounds. The company will lose its argument
because
a. the Charter never applies to corporations.
b. the Charter applies to federal, provincial, and territorial statutes but not to municipal
by-laws.
c. although some parts of the Charter apply to corporations, section 15(1) is limited to
“individuals” and therefore cannot apply to Omicron.
d. section 15(1) of the Charter was recently repealed (that is, done away with).
e. Section 15(2) of the Charter prevents Omicron Inc from using section 15(1).
34) A court recently found, as a matter of fact, that a party’s ability to advertise was
restricted. In some circumstances, such a restriction violates section 2(b) of the Charter.
Ultimately, however, the court’s decision did not allow the affected party to advertise as it
wished. Which of the following statements may explain that end result?
a. The restriction was imposed by a statute and the government responsible for that
statute reacted to the court’s decision by invoking the residual clause.
b. The party was not entitled to freedom of expression because it is a company rather than
a human being.
c. The court held that the restriction was an “unreasonable limitation” on the freedom of
expression.
d. The restriction was saved under section 15(2) of the Charter.
e. The restriction was imposed by a private party, rather than by a government actor.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
35) The notwithstanding clause
a. is contained in section 1 of the Charter.
b. is applied to Canadian laws regularly.
c. must be reinvoked every ten years in order to remain in effect.
d. can be applied with respect to each and every the right and freedom contained in the
Charter.
e. is seldom used by governments because it involves a potentially controversial political
decision to override fundamental rights and freedoms protected by the Constitution of
Canada.
36) Subordinate legislation
a. involves a statute that was introduced to change an existing statute.
b. always prohibits certain forms of behaviour.
c. is always created at the provincial level, rather than at the federal level.
d. is practically necessary because it is impossible for legislators to constantly monitor all
of their statutes and continuously make rules to govern particular and changing
circumstances of local or particular concern.
e. always consists of by-laws.
37) The Town of Blackville created a set of rules for the licensing of businesses. Which
of the following statements is likely TRUE?
a. The rules take the form of statutes rather than by-laws.
b. The rules are a form of superior legislation.
c. Blackville was created by a statute in Parliament.
d. Blackville is located in Quebec.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
e. The Town of Blackville was created under the authority of a provincial statute which
statute gave the town the power to create these rules.
38) Which of the following statements is TRUE?
a. The Queen is represented by a lieutenant governor in each province and territory.
b. The legislature in each and every province and territory is called the Legislative
Assembly.
c. The territories have legislative assemblies similar to legislatures, but they do not have
senates.
d. Parliamentary bills are always introduced in the House of Commons before being sent
to the Senate.
e. Each province has a senate.
39) Which of the following statements is TRUE with respect to municipalities?
a. Most municipalities are created by the federal government, rather than by provincial
governments.
b. A municipality is created when a higher level of government passes a by-law.
c. Cities are municipalities, but towns are not.
d. Laws that are created by municipalities are called subordinate legislation.
e. Some types of subordinate legislation have nothing to do with municipalities.
40) Which of the following statements is TRUE?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
a. The prime minister is the person who leads the party that has the most number of
senators.
b. Before a bill becomes a federal law, it must receive royal proclamation, which is given
by the lieutenant general on behalf of the Queen.
c. In Parliament, a bill cannot become a law unless it has passed through four readings in
the House of Commons and four readings in the Senate.
d. Regulations, statutory instruments, ordinances, by-laws and orders-in-council are types
of subordinate legislation.
e. In Parliament, a bill can become a law only if it is supported by at least two-thirds of
senators.
41) Harrison owns and manages a golf course called Solo Golf and Country Club in a
residential area. Recently, the number of incidents involving broken windows has been
rising and residents are asking for compensation. In order to manage his risk, Harrison
should
a. try to shift the risk to homeowners – they shouldn’t have built there in the first place.
b. accept the risk and just pay for any broken windows.
c. close the course.
d. create a contract with the homeowners in which liability is set at $100 per piece of
damaged property but can be claimed even for minor infractions.
e. incorporate a company to own the golf course so Harrison cannot be personally liable.
42) Han is in a convenience store when another patron begins to rob the store. Han has a
legal obligation to
a. call the police.
b. tackle the robber.
c. hide in the corner.
d. try to talk the robber out of robbing the store.
e. none of the above. This is an ethical issue, not a legal one.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
43) The Government of Canada thinks that Harpreet has purposefully misfiled his taxes
in order to pay less. The laws under which the Government will sue Harpreet are
a. public law – the government will use both criminal and tax law.
b. common law – the government will sue Harpreet for the tort of negligence.
c. civil law – but only if Harpreet in in Quebec.
d. public law – Harpreet can be tried under tax law, but not criminally.
e. not applicable because he is a white-collar criminal, so his actions cannot be
prosecuted by the Government.
44) Peter starts a new job with Enviromaim Oil. Peter is originally from Ontario, but
moved to Saskatchewan five years ago; Enviromaim in in Alberta. When he starts his job,
his new boss finds out he is from Ontario and says, “You Ontarians have no business here
in Alberta, you’re all a bunch of Liberals and country–club goers!” Peter’s boss has
violated
a. only the Charter right of mobility.
b. the Charter rights of freedom of association, mobility, and freedom of thought, belief,
opinion, and expression.
c. Peter’s employment contract.
d. the Charter rights of freedom of association, mobility, and equality.
e. the Charter rights of equality, freedom of religion, and peaceful assembly.
45) Myra is a new MP. She introduces a new bill to the House of Commons and a
majority of her colleagues agree to it. Which statement is true regarding Myra’s bill?
a. Because a majority of people agreed to it, the bill is now law.
b. Myra’s bill is not law because MPs cannot introduce bills, they can only lobby for
them.
c. Myra’s bill is not law because it has only passed the first reading and still must pass a
second and third reading and receive royal assent.
d. Myra’s bill will not become law if a member of her constituency expresses concern
before the second reading.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
e. Even if Myra receives royal assent from the governor general, her bill still won’t be
ratified until the Queen sees it.
46) Your town has a by-law stating that pets must be kept on a leash at all times. A friend
of yours doesn’t want to leash his dog, but is afraid he’ll be arrested and tried if he
doesn’t. You tell him that
a. he should be worried; the provincial government creates municipalities, so the province
enforces their statutes.
b. by-laws aren’t real laws, so he shouldn’t worry.
c. by-laws can only regulate business, so the law isn’t valid.
d. the government is evil and they do these things sometimes.
e. the municipality enforces by-laws, so he can only receive a fine.
47) Giuseppe makes a contract with Hilda in which, for $100, he will collect for her
every Nintendo game ever made. After he completes the set, he refuses to give the games
to Hilda, having become attached to them. Which of the following is true about Hilda’s
remedy against Giuseppe?
a. The law states that Giuseppe must only repay the monetary value of the games to
Hilda, but she receive the games.
b. Nintendo games are worthless, so Hilda shouldn’t waste her time and accept the loss.
c. Hilda doesn’t have a case because $100 is inadequate consideration for the contract.
d. The law states that Giuseppe must only repay the monetary value of the games, but
under equity Hilda may be granted specific performance for the games.
e. Hilda can only receive specific performance for Giuseppe to receive the games, not
monetary compensation.
48) Eunice wants to give her grandson $100,000 because she wants him to go to law
school, but she is worried he will spend it on a sports car. Eunice should
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
a. set up a trust for her grandson, so the trustee can ensure the money is spent well.
b. sue her grandson for damages if he spends the money on a sports car.
c. sue for specific performance if he buys the car, so she can get the new car.
d. keep the money – the kid doesn’t deserve it.
e. make him sign a contract saying he will use the money for law school.
Essay Questions
1) Omega Inc manufactures several types of widgets and sells them directly to
consumers. One type of widget contains a design defect that creates a risk of injury.
Briefly explain the steps that the company should take by way of risk management.
Identify the sorts of additional facts that would be required for the purpose of effective
risk management.
2) Sigma Corp manufactures widgets. It has discovered a design defect that creates a risk
that one or more widgets may cause property damage. Briefly explain how the company
could manage that risk by shifting it. Identify a potential cost of shifting the risk.
3) Theta Motor Co manufactures the Presto, which is a type of compact car. It has
discovered a design defect that affects the Presto. Identify and briefly explain situations
in which it would be appropriate for the company to manage the risk by: (i) avoiding it,
(ii) reducing it, and (iii) accepting it.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
4) Lamda Inc recently decided to use “in-house counsel.” What does that phrase mean?
Explain the advantages and disadvantages of the company’s decision.
Answer:
5) Identify and briefly explain four areas of public law.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
6) What are the main differences between a tort and a crime? Can the same event ever
give rise to both a tort and a crime? Explain your answer.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
7) Howard is a manager with Rogue Used Cars Inc. He and the company have both
misbehaved. The police have laid charges concerning a white collar crime and a
corporate crime. Describe the differences between those two types of crimes.
8) A town called Malice has undertaken a risk management study in an effort to minimize
its exposure to legal liability. Since it is a form of government, and therefore a public
body, it wants to know if it ever needs to worry about private law. Provide an answer to
that question.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
9) Is it easy or difficult to change the Constitution? What is the policy that underlies the
correct answer to that question? Who must agree before the Constitution can be changed?
10) An appellate court recently heard two cases. In the first, it decided that a statute was
ultra vires. In the second, it decided that another statute violated the Charter. What is the
significance, in each case, of section 52 of the Constitution?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
11) What is the residual power? What is meant by the phrase “ultra vires”? How are
those two concepts related to the notion of federalism?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
12) Ranji wants to start a new company, but is concerned about risk management and
legal liability. He is particularly concerned about the Charter, in both a positive sense and
a negative sense. Explain the extent to which the Charter applies in favour and against a
corporation.
13) A judge recently decided a Charter case that involved the government on one side
and a corporation on the other. After that decision was released, one of the parties
indicated its intention to use the “notwithstanding clause.” What is the effect of that
clause? Who is entitled to use it?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
14) Statutes may be created at either the federal level or at the provincial (or territorial)
level. In either event, the rules and procedures are much the same. There are, however,
some differences in terms of the people, processes, and types of laws that are involved.
Identify and briefly explain those differences.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
15) Identify and briefly explain the remedies that a judge may award after finding a
Charter violation.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 1: Risk Management and Sources of Law
