Deck 30: Government Regulation of Business

Question 1

A is a student at a local university found guilty of plagiarism under the rules of the university senate.A's case was heard by a panel of professors created under the rules,who did not allow A to defend himself or to be represented by counsel.In this case,on a judicial review hearing of the matter,

A)A will succeed on the grounds of procedural irregularity.
B)A will succeed on the grounds of unfairness.
C)A will not succeed at all.
D)A has no standing to ask for judicial review.
E)A will succeed on the grounds that the panel exceeded its authority.

Answer 1

B

Question 2

Nasty Travel is a company that sells vacation time share packages.To do this,first it contacts potential customers,telling them that if they come to one of its meetings,they will receive a prize.Once a person comes to the meeting,Nasty's representatives use very high pressure tactics to virtually force this person to buy a time share package and sign the documents.They then give this person a very inexpensive gift.In fact,this happened to John just two days ago.Under present-day consumer legislation,

A)if John decides to go ahead with the purchase,he is bound to do so.
B)if Nasty does not give John back his money,John can sue Nasty for its return.
C)John has a cooling-off period to decide if he wants to go ahead with the purchase.
D)if during the cooling-off period,John decides to terminate the contract,Nasty must give his money back to him.
E)all of the above

Answer 2

C

Question 3

Under contract law,a provision in the contract for restricting trade will be struck down by the court if it

A)prevents a former employee from going into business for him- or herself in competition with his or her previous employer.
B)unreasonably restricts competition.
C)is a business partner competing with a former associate.
D)reasonably protects the new owner of a business against the former owner.
E)has no consequence.

Answer 3

B

Question 4

A provincial government is attempting to determine which of three sites in the province might be used to dispose of hazardous waste.In furtherance of this determination,representatives of local municipal governments where the sites are located meet with the provincial environment minister.During the meeting,the largest local municipal government advises the minister that if the site in their area is not chosen,it will ensure that its entire population will vote for the minister in the next provincial election and will contribute heavily to his campaign.A few weeks later,a different site is chosen.In this case,the largest local municipal government

A)has bribed the minister under the Canadian Environmental Protection Act.
B)has bribed the minister under the Corruption of Foreign Public Officials Act.
C)has bribed the minister under the environment legislation of the province where the sites are situated.
D)has bribed the minister under the Criminal Code of Canada.
E)has not bribed the minister at all.

Question 5

Carla owns Nifftee Dry Cleaners.If she is guilty of misleading advertising,who is the most likely to report her?

A)a disgruntled consumer using provincial legislation
B)a government agency with the power to prohibit such advertising
C)the Services Act of the province of jurisdiction
D)provisions of the Competition Act
E)a class action lawsuit

Question 6

The term or phrase used to describe an area in which both the federal and provincial governments have jurisdiction is

A)concurrent jurisdiction.
B)separation of powers.
C)supremacy.
D)diplomacy.
E)paramountcy.

Question 7

A large private nuclear facility began discharging radioactive water into the local lake whose waters were used to cool down the reactors.In this case,

A)the company has committed an offence under environmental legislation and it may be fined.
B)the company's directors may defend on the basis of due diligence.
C)the company's officers may defend on the basis of due diligence.
D)the company's directors and officers may have committed an offence under environmental legislation and may be fined.
E)all of the above

Question 8

Jack manufactures woollen winter sweaters,which are not selling very well in areas of Canada that have been warmer than usual.In order to improve his sales,George removes the tags from all of the sweaters identifying them as wool,and then sells them as summer sweaters.In this case,George has committed an offence under

A)the Hazardous Products Act.
B)the Criminal Code.
C)the Food and Drug Act.
D)the Textile Labelling Act.
E)the Competition Act.

Question 9

At a convention of builders in Toronto,a proposal was adopted whereby whenever there was a call for tenders from the provincial government,members would check with each other before submitting their tenders to ensure that only the tenders of companies that needed the work would be accepted.This case is an example of

A)discriminatory practice.
B)price parallelling.
C)abuse of dominant position.
D)bid-rigging.
E)exclusive dealing.

Question 10

George Shifty is not a very nice guy.In fact,George has just incorporated a telemarketing company solely to make money off of the unsuspecting people his company contacts.For the next six months,the company's telemarketers will be selling funeral caskets and marketing to people over the age of 70.Once a person is contacted,the telemarketer tells him or her that before a casket can be sold,the person must send in an administrative deposit equal to one-fifth of the value of a casket.If they do this,they will receive a casket within eight months.At the end of six months of telemarketing the caskets,the company has received $1 500 000.00 in administrative charges,which George immediately pockets,leaving the company insolvent.Then George gets on a plane for an extended vacation in a South American country that has no extradition treaty with Canada and loses himself in that country.In this case,

A)the company has committed the offence of deceptive telemarketing.
B)since the company is insolvent and George cannot be found,there is no practical recourse.
C)had George stayed in Canada,he could have been convicted as a director of the company.
D)the company can be fined in the millions of dollars.
E)all of the above

Question 11

Edward is an arbitrator appointed under the Arbitration Act.Procedure under the Act is set out in another statute,which makes it mandatory that arbitration briefs be filed by each party to the arbitration.In an arbitration hearing held yesterday,only one party was permitted to file an arbitration brief,but Edward decided that the other brief was unnecessary and rendered his decision.On a judicial review hearing of Edward's decision,

A)Edward's decision will be set aside for failure to comply with fairness.
B)Edward's decision will be set aside for an error in law.
C)Edward's decision will not be set aside.
D)Edward's decision will be set aside for procedural irregularity.
E)Edward's decision will be set aside for exceeding his authority.

Question 12

A law that prohibits any form of association between two or more businesses is probably

A)not valid under the Charter of Rights and Freedoms.
B)valid under the Charter of Rights and Freedoms.
C)void under federal legislation.
D)void under provincial legislation.
E)none of the above

Question 13

A cooling-off period in door-to-door selling

A)is for a period of 48 hours.
B)applies to goods but not services.
C)has the same provisions throughout Canada.
D)departs from an established common law rule.
E)only applies to sales over $100.

Question 14

In Canada,farming is

A)under the exclusive jurisdiction of the federal government.
B)not provided for in the constitution.
C)within the jurisdictions of both federal and provincial governments.
D)under the exclusive jurisdiction of the provincial government.
E)none of the above

Question 15

The War Veterans League sent Martha five sheets of labels with her name and address on them.The enclosure also had a request for a $5.00 payment.If Martha is going to use the self-addressed stickers,is she legally required to send in the payment?

A)No,she is not,since legislation prohibits the sending of unsolicited goods.
B)No,she is not,since this would be a gratuitous donation anyway.
C)Yes,she is,since use gives the consideration for a binding agreement.
D)Yes,she is,because there is a moral obligation when benefits are obtained.
E)No,she is not,since consumer protection statutes expressly state that use of goods does not amount to an acceptance of a seller's offer.

Question 16

Competitors can in fact enter into an agreement whereby each will discontinue producing a current product.If the efficiencies created for the market by this "specializing agreement" make up for any lessening of competition,the competitors may

A)freely proceed with the plan to discontinue the product.
B)apply to the Competition Tribunal and obtain approval of the agreement.
C)do nothing to legalize the effect of the specializing agreement.
D)apply for approval of what would otherwise be considered parallel pricing.
E)be liable for engaging in bid-rigging.

Question 17

A law that applies restrictions on advertising,but does not prohibit it,is probably

A)void under provincial legislation.
B)not valid under the Charter of Rights and Freedoms.
C)valid under the Charter of Rights and Freedoms.
D)void under federal legislation.
E)none of the above

Question 18

Regarding government regulations,a distinction is sometimes made between direct regulation and social regulation.Which of the following would be a social regulation?

A)rate of return on deposits
B)standards of safety at amusement parks.
C)production levels of utilities
D)pricing of brokerage services
E)import quotas on textiles

Question 19

Use the fact situation in Q8 to answer the related question that follows. In the fact situation above,the offence that the furniture store has committed is

A)a regulatory offence only.
B)both a criminal and a regulatory offence.
C)no offence at all.
D)a criminal offence only.
E)neither a criminal nor a regulatory offence.

Question 20

Use this fact situation to answer the related questions that follow. A local furniture store advertised a specific lamp at a discount,knowing it only had a couple of lamps.When customers came into the store to buy the lamp,they were told that the lamps had sold out,but they could buy another similar lamp at the regular price.
In this case,the actions of the furniture store can be described as

A)mere puff advertising.
B)bait-and-switch advertising.
C)false advertising.
D)fraudulent misrepresentation.
E)proper advertising.

Question 21

Bait-and-switch advertising is both a criminal and a regulatory offence.

Question 22

Tied-selling is an example of monopolizing.

Question 23

To enforce environmental protection laws is no small or easy matter.The enforcement usually involves

A)primarily a private matter,but one where government agencies are empowered to enforce.
B)requiring polluters to refrain from harmful activities,to remedy existing situations,and to pay for the costs of clean-up.
C)situations where public authorities are over-zealous with a wide variety of enforcement mechanisms,which they apply abusively.
D)the responsibility of corporations,since they are the major polluters.
E)the common law tort of nuisance.

Question 24

Consumer protection statutes create regulatory offences that require mens rea and usually allow the due diligence defence.

Question 25

As a response to high pressure door-to-door sales methods,most provinces have enacted legislation making direct sales contracts non-binding on consumers.A direct sales contract is one in which the contract is formed

A)at a consumer's residence.
B)at a consumer's place of employment.
C)at a place other than the business's place of business.
D)at the business's place of business.
E)at a salesperson's residence.

Question 26

In appropriate circumstances,a company that has a monopoly can be found guilty of conspiracy under the Competition Act.

Question 27

Parallel pricing is an example of monopolizing.

Question 28

Generally speaking,the conspiracy provisions of the Competition Act do not apply to professionals.

Question 29

The fact that prices among competitors in a particular industry tend to go up or down at the same time and by approximately the same amount does not necessarily mean that there is a conspiracy.

Question 30

The Canada Consumer Product Safety Act (CCPSA)applies to manufacturing,importing,selling,and distributing,and applies to a broad range of products.The CCPSA also provides for all of the following EXCEPT

A)mandatory disclosure of defect incidences.
B)increasing penalties for non-compliance.
C)expanding criminal liability to include directors and officers.
D)banning unsafe products and setting standards of quality for others.
E)expressly providing to the consumer a civil cause of action for damages.

Question 31

The provisions of the Competition Act relating to anti-competitive practice can be grouped under three main headings.These do not include

A)conspiracies.
B)monopolizing.
C)mergers.
D)regulation of professions.

Question 32

Today,environmental impact assessment review is a mandatory step in developing land.

Question 33

Are the disclosure statements that set out the cost of borrowing and that are required to be provided under consumer protection legislation really a protection for many borrowers whose credit is poor or who need to borrow money?

Question 34

Any agreement that lessens or has the potential to lessen competition may be reviewed by the Competition Bureau,and the Commissioner of Competition may seek enforcement proceedings before the Competition Tribunal seeking such orders including all of the following EXCEPT

A)a cease and desist order.
B)any order requiring some form of corrective or modifying action.
C)fines or imprisonment imposed on parties unless they fail to comply with tribunal orders.
D)a private cause of action for damages based on the legislation.

Question 35

With respect to environmental law,the most important federal legislation is contained in the Canadian Environmental Protection Act (CEPA).Any contravention of the CEPA or its regulations

A)may be a criminal offence.
B)carries a maximum fine of one million dollars.
C)may include three years' imprisonment as well.
D)may include clean-up costs.
E)all of the above

Question 36

The Criminal Code of Canada sets a maximum "legal" interest rate,and the federal Interest Act requires that interest rates in written contracts be expressed in annual percentages.

Question 37

For the merger of two large competing companies to be approved,there must

A)have been a pre-notification to Parliament.
B)be barriers to prevent new competitors from entering the market.
C)still be effective competition after the merger.
D)be no evidence of foreign competition in the market.
E)be good economic health in the target firm.

Question 38

A voluntary code of conduct created to supplement legislation is as binding as the legislation itself.

Question 39

The four companies that sell bulk-rate diesel to farmers in the Saskatoon area have consistently moved together (up or down)with the same prices.It has been suggested that they have conspired together to keep prices the same.Might they be prosecuted under the Competitions Act?

A)Yes,they might be,since there is prima facie evidence of a conspiracy.
B)Yes,they might be,since this is a good example of the practice of parallel pricing.
C)No,they would not be,because the conspiracy cannot be implied.
D)No,they would not be,because their intent must be proved.
E)Yes,they might be,because an agreement can be inferred from the actual behaviour.

Question 40

Which of the following statements is true concerning environmental protection?

A)Although both federal and provincial governments regulate the environment,municipalities also have authority to pass by-laws to provide local environmental protection.
B)The most important legislation is the Unified Canadian Environmental Protection Act,which has been adopted by each province.
C)Common law has many applications to pollution problems.
D)Major environmental disasters have failed to make the public aware of the dangers associated with humans' interaction with the environment.
E)So far,only a few of the provinces have general environment protection laws.

Question 41

In addition to remedies provided by consumer protection legislation,what civil remedies can be employed?

Question 42

The Canadian federal government organized its consumer protection legislation,culminating in 2011 with the implementation of the Canada Consumer Products Safety Act (CCPSA).What is the CCPSA,and what activities does it focus on?

Question 43

Why is it important that a consumer who has financed a purchase have the same rights against the finance company as against the merchant who sold the goods? What law gives the consumer this assurance?

Question 44

On what basis can a merger be approved even though it has been shown that it will substantially lessen competition?

Question 45

On what basis can the courts challenge the legality of administrative acts and decisions?

Question 46

Why is there a need to make many consumer-protection offences dual offences?

Question 47

In relation to price fixing,what is parallel pricing?

Question 48

In administrative proceedings,what are the overriding principles to be employed?

Question 49

Explain the dilemma created by the constitution when it comes to the enactment of federal and provincial legislation designed to regulate commercial transactions and thus protect consumers,as well as its effect.

Question 50

Paul is a licensed plumber who provides residential plumbing service.He advertises in the yellow pages and in the classified section of the local newspaper.It is claimed that his advertising is deceptive.Is he subject to the provisions of the federal Competition Act? Explain.

Question 51

Explain horizontal and vertical mergers.

Question 52

What does it mean when distribution practices such as exclusive dealing,tied selling,and market restriction are said to be "reviewable"?

Question 53

What is one major problem that is faced by federal,provincial,and municipal governments when it comes to regulating business?

Question 54

Regarding deceptive advertising,which is better,to give government agencies the power to prohibit,such as advertising and impose fines against sellers,or to give consumers an arsenal of remedies for stopping,such advertising?