Question 1

With respect to distributorships,the existence of a genuine selling opportunity and a realistic opportunity to expand are relevant to which of the following?

Accepted Answer

The legality of a multi-level marketing plan is determined by whether it meets certain legal requirements, and one of these requirements is that there must be a genuine selling opportunity and a realistic opportunity to expand. Thus, the existence of such opportunities is relevant to the legality of a multi-level marketing plan.

Answer: C 
 Pyramid selling schemes are illegal in many countries, and they are characterized by a focus on recruiting new participants rather than selling products or services. The existence of a genuine selling opportunity and a realistic opportunity to expand is relevant to the distinction between a pyramid selling scheme and a legitimate multi-level marketing plan.

Answer: D 
 Timely disclosure of earnings refers to the requirement that distributors must be provided with accurate and complete information about the earnings potential of the distributorship. The existence of a genuine selling opportunity and a realistic opportunity to expand is relevant to this disclosure, as it impacts the potential earnings of the distributorship.

Therefore, options B, C, and D are all relevant to the existence of a genuine selling opportunity and a realistic opportunity to expand in distributorships.

Question 2

Which of the following would be identified as a broad concept designed to generate sales,information requests,and store or website visits that is regulated by the Competition Act?

Accepted Answer

Direct marketing is a broad concept designed to generate sales, information requests, and store or website visits. It is regulated by the Competition Act, which sets out rules for fair competition and prohibits anti-competitive practices. Tied selling, telemarketing, and door-to-door selling are all specific types of direct marketing that may also be regulated by the Competition Act.

Question 3

As a result of the Canadian National Do Not Call List becoming operational on September 30,2008,which of the following has jurisdiction to regulate unsolicited telemarketing communication?

Accepted Answer

The Canadian Radio-television and Telecommunications Commission (CRTC) has jurisdiction to regulate unsolicited telemarketing communication, including the National Do Not Call List.

Question 4

While a business may strive for market dominance as a means of achieving economies of scale,such market dominance is typically intolerable to Canadians based on which of the following known results?

Accepted Answer

Canadians generally prioritize fairness and a level playing field when it comes to business practices. Market dominance often leads to unfair and discriminatory higher pricing practices, which can harm consumers and negatively impact the overall economy. As such, Canadians typically do not tolerate such practices and may seek government intervention to promote competition and protect consumers.

Question 5

If a producer establishes an informed and properly responsive customer relations process,which of the following best practices for managing legal risk may also result?

Accepted Answer

An informed and properly responsive customer relations process can help establish an early warning system regarding flawed design and production techniques. This can help the producer identify and address potential legal issues before they escalate. The other choices do not necessarily relate to managing legal risk.

Question 6

With respect to managing legal risks that often accompany marketing practices,contracting out of express terms versus implied terms and multi-level selling are sources of legal risk associated with which of the following?

Accepted Answer

The answer of With respect to managing legal risks that...

Question 7

In what way are the practices of predatory pricing and exclusive dealing similar to each other?

Accepted Answer

The practices of predatory pricing and exclusive dealing both reduce or eliminate competition. Predatory pricing involves setting prices so low that competitors are forced out of the market, while exclusive dealing involves agreements between a supplier and a customer that prevent competitors from accessing certain channels of distribution. Both practices have the effect of reducing competition and potentially allowing the dominant firm to maintain or increase its market power.

Question 8

Which of the following would a business law professor most likely indicate to be applicable to direct-marketing practices?

Accepted Answer

Direct-marketing practices are subject to both federal and provincial regulations. Therefore, choice D is the most applicable option. Choice A refers to competition law and choice B is a general statement about fair competition. Choice C is vague and does not specifically relate to direct-marketing practices.

Question 9

Ramsay Group Insurance Inc.has been advised by a major insurance underwriter that it must carry a number of the underwriter's less popular products and refrain from carrying any competitor's products.In these circumstances,what type of offence has the insurance underwriter committed?

Accepted Answer

Tied selling occurs when a seller requires a buyer to purchase one product in order to obtain another product. In this case, the insurance underwriter is requiring Ramsay Group Insurance Inc. to carry a number of its less popular products in order to obtain the more popular products.

Question 10

Which of the following is recommended in addition to best practices for managing legal risks that require basic shipping terminology to be defined to facilitate understanding of implications of contractual terms by employees?

Accepted Answer

The answer of Which of the following is recommended in...

Question 11

What type of criminally offensive product distribution plan fails to provide participants with the ability to return product on reasonable commercial terms?

Accepted Answer

Pyramid selling is a type of criminally offensive product distribution plan that fails to provide participants with the ability to return product on reasonable commercial terms. In pyramid selling, participants make money by recruiting others to sell products, rather than by actually selling products themselves. This creates a situation where there may be an oversupply of products and limited demand, leaving participants unable to return unsold products on reasonable commercial terms. Multi-level marketing, tied selling, and telemarketing do not necessarily share this flaw.

Question 12

Which of the following characteristics distinguishes a door-to-door salesperson from a telemarketer?

Accepted Answer

This is because licensing requirements for door-to-door selling are regulated by consumer protection legislation, while there is currently no licensing requirement for telemarketers in most jurisdictions.

Question 13

Which of the following would a business law professor most likely indicate as being the result of the online industries' need to establish principles for protecting e-commerce customers?

Accepted Answer

The Canadian Code of Practice for Consumer Protection in Electronic Commerce specifically addresses the need for principles to protect e-commerce customers, making it the most likely choice. The other options may also touch on the issue of protecting online customers but are either more focused on specific industries or broader in scope.

Question 14

Which of the following would most strongly support the adoption of best practices by a producer to minimize its exposure to sources of legal risk?

Accepted Answer

Option C states that one preventable injury can destroy the viability of a product line. This highlights the significant legal risk that producers face in the event of an injury caused by their product or service. By adopting best practices to minimize their exposure to such risks, producers can protect their product lines and their business as a whole. Options A, B, and D are also important considerations for minimizing legal risk, but they do not provide as strong a rationale for the adoption of best practices as option C.

Question 15

Which of the following would a lawyer most likely indicate as the source of legal risk associated with environmental claims and warnings on product labels?

Accepted Answer

Environmental claims and warnings on product labels are related to the product itself and how it is promoted, as these aspects can lead to legal risks if they are misleading or not compliant with regulations.

Question 16

Which of the following are common characteristics associated with anticompetitive behaviour?

Accepted Answer

The answer of Which of the following are common characteristics...

Question 17

Which of the following is the recommended source for acquiring knowledge of the standards that must be met for both the production and labelling of goods produced by a manufacturer?

Accepted Answer

Trade associations and specialized professional advisors typically have industry-specific knowledge and can provide guidance on standards for production and labelling of goods. The Trade Association Conformity Continuum Guidelines may also be a helpful resource, but is not as widely known or used as trade associations and professional advisors. The Competition Bureau and its immunity program focus more on enforcing regulations and investigating potential violations, rather than providing guidance on meeting standards.

Question 18

Which of the following would a Competition Bureau investigator most likely use to describe a marketing scheme where participants are knowingly being sold unreasonable quantities of products or products?

Accepted Answer

Inventory loading refers to a marketing scheme where participants are sold unreasonable quantities of products or inventory, often at inflated prices. This practice is prohibited by the Competition Act in Canada. Tied selling refers to a situation where a customer is forced to purchase a product or service as a condition for buying another product or service. Multi-level marketing is a legitimate business model where participants earn commissions by selling products and recruiting others to join their network. Pyramid selling is an illegal business model where participants earn commissions mainly by recruiting others to join their network, rather than by selling products.

Question 19

When a seller refuses to sell to a purchaser on the same terms as those that are offered to the purchaser's competitors,which of the following would a business law professor state as being the most significant consequence?

Accepted Answer

Refusal to deal is a reviewable matter under the Competition Act. This means that if a seller refuses to sell to a purchaser on the same terms as those offered to the purchaser's competitors, it could be considered anti-competitive behavior and be subject to review by the Competition Bureau. The other options (A, C, and D) do not address the legal implications of this situation.

Question 20

Which of the following exemplifies a distinguishing characteristic of the Personal Information Protection and Electronic Documents Act?

Accepted Answer

The distinguishing characteristic of the Personal Information Protection and Electronic Documents Act is that it can be applied provincially even in the absence of similar provincial laws. This means that the federal law provides a baseline level of protection for personal information across Canada. The other options do not relate specifically to this characteristic of the act.

Quiz 24: Sales and Marketing: Price, Distribution, and Risk Management