Question 1

Litigation directly involves lawyers, judges, and the court system because it is the process one person or a business must use to sue another.

Accepted Answer

Litigation is a legal process where one party files a lawsuit against another party, and the matter is resolved through the court system. Lawyers represent their clients in court, and a judge presides over the case, ultimately making a decision or ruling on the matter. Therefore, litigation directly involves lawyers, judges, and the court system.

Question 2

In every type of business dispute resolution, Canadian law requires that a judge must decide the amount of the loss to prevent hard feelings between the parties and allow the business relationship to be maintained.

Accepted Answer

Canadian law does not require that a judge must decide the amount of the loss in every type of business dispute resolution. Parties can also resolve disputes through negotiation, mediation, or arbitration, where they can agree on the amount of the loss or the terms of settlement without judicial intervention.

Question 3

The creation of complexity in business relationships is one of the most important contributions the law can make to the commercial arena.

Accepted Answer

The creation of complexity can actually hinder business relationships and make transactions more difficult. The law should strive to simplify and clarify commercial interactions to promote efficiency and fairness.

Question 4

Which of the following is an example of how business law guides business conduct?

Accepted Answer

Business law sets rules and penalties to encourage compliance, which guides business conduct. Option B is incorrect because while codes of ethics may be referenced in business law, they are not set by it. Option C does not accurately reflect the role of business law in guiding conduct, as it primarily serves as a means of compensation in cases of legal liability. Option D is incorrect because business law does not generally set limits on executive compensation, although such rules may be established by individual companies or industry regulations.

Question 5

Recent events involving fraud on the public in Canada confirmed that failure to comply with the obligation to abide by the law can lead to severe consequences for business enterprises, including financial penalties and criminal prosecution.

Accepted Answer

The statement is true as failure to comply with the law can result in penalties and criminal prosecution for businesses involved in fraud in Canada.

Question 6

What is the main goal of the Canadian legal system?

Accepted Answer

The main goal of the Canadian legal system is to facilitate planning, protection, dispute resolution, and justice. This includes protecting individual rights and ensuring that justice is served in both criminal and civil cases. The legal system also aims to provide a fair and reliable way to resolve disputes between parties, and to allow for effective planning for the future of the country. While facilitating commerce, arbitration, and free trade may be important factors within the legal system, they are not the main goal.

Question 7

Canada offers an attractive commercial environment for entrepreneurs because it has an established set of laws comprised of rules and principles intended to guide conduct in business relationships and protect the property of persons and business.

Accepted Answer

Canada's legal system and regulatory framework provide a stable and predictable business environment. The country has strong intellectual property protection, a well-regulated financial sector, and a competitive tax system that encourages investment and entrepreneurship. These factors make Canada an attractive destination for entrepreneurs looking to start or expand their business.

Question 8

Evergreen Solutions Inc. intends to sell its database of customer contact information to a telemarketing firm. What infraction might Evergreen Solutions Inc. be committing if it proceeds with this plan?

Accepted Answer

The answer of Evergreen Solutions Inc. intends to sell its...

Question 9

Contract law refers to a collection of rules used to establish contracts as binding agreements between contracting parties and to ensure their obligations can be legally enforced.

Accepted Answer

Contract law is indeed a set of rules that govern the formation, interpretation, and enforcement of contracts. These rules ensure that both parties to the contract are aware of their obligations and that they can take legal action if the other party fails to fulfill their obligations.

Question 10

Canadian business law consists of a set of established bilingual rules governing commercial relationships that exclude enforcement of rights.

Accepted Answer

Canadian business law consists of a set of established bilingual rules governing commercial relationships that include enforcement of rights.

Question 11

An outdoor adventure business that inhumanely kills sled dogs may face prosecution under animal welfare statutes and even the Criminal Code of Canada.

Accepted Answer

In Canada, animal welfare is protected by federal and provincial laws that prohibit animal cruelty, abuse, and neglect. The Criminal Code of Canada also criminalizes causing unnecessary suffering, pain, or injury to animals. Killing sled dogs in an inhumane manner can result in criminal charges and prosecution under these laws.

Question 12

Canadian law provides that business owners may discriminate in hiring practices and may ignore the laws of other countries; however, they must comply with the health and safety regulations governing the workplace.

Accepted Answer

Canadian law prohibits discrimination in hiring practices based on certain protected characteristics (such as race, religion, gender, and age). Additionally, Canadian businesses that operate in other countries must comply with the laws and regulations of those countries. The statement is false because Canadian businesses must also comply with various labor and employment laws, including health and safety regulations, within Canada.

Question 13

Litigation is an expensive and lengthy process that involves one business entity attempting to find a resolution for a conflict caused by the other party to the contract by actively engaging in negotiations aided by a neutral party.

Accepted Answer

Litigation is a legal process involving the court system to resolve disputes, not negotiations aided by a neutral party; that description fits mediation or arbitration.

Question 14

What ethical infraction is hiring a company's accounting auditors to act as the business's accounting compliance consultants an example of?

Accepted Answer

Hiring a company's accounting auditors to act as the business's accounting compliance consultants creates a conflict of interest. This is because the auditors may be more inclined to overlook accounting irregularities or compliance issues in order to maintain their consulting relationship with the business.

Question 15

What type of law is the vehicle for ensuring that those affected by a failed business are treated fairly, reasonably, and in accordance with agreed rules?

Accepted Answer

Bankruptcy law governs the process by which individuals or businesses that cannot meet their financial obligations can seek relief from their debts. It provides a framework for managing the liquidation of assets and the distribution of funds to creditors, with the goal of ensuring that all parties are treated fairly and according to established rules.

Question 16

Which of the following best describes the nature of the mediation process?

Accepted Answer

Mediation involves the assistance of a neutral third party who helps the parties in a dispute reach a negotiated resolution. It is not submission to litigation or arbitration, nor is it renegotiation of the contract with a judge's assistance.

Question 17

Which of the following is an example of the values represented in the Canadian legal system?

Accepted Answer

The Canadian legal system values producing just outcomes, which is reflected in the various laws, policies, and practices. The system aims to ensure that all individuals are treated fairly and equally under the law, that justice is done where wrongdoing has occurred, and that people are held accountable for their actions. The system also values fairness and equity, but does not seek to limit these principles. Additionally, subjectivity is not a desired trait in the legal system, as it could lead to biased decisions.

Question 18

Which of the following best exemplifies a protective element of Canadian law?

Accepted Answer

The statement "It seeks to make those who break the law accountable" best exemplifies a protective element of Canadian law as it aims to protect individuals and the society by ensuring that those who break the law are held responsible for their actions.

Question 19

What outcome would eventually result from approaching the operation of a business with an unethical perspective combined with a lack of respect for adherence to and enforcement of the law?

Accepted Answer

Approaching a business with an unethical perspective and a lack of respect for adherence to the law will eventually result in the demise of the business. Such practices may lead to legal penalties, loss of reputation, and loss of customers, all of which can severely impact the success of the business.

Question 20

What are the standard forms of business structure available to entrepreneurs to facilitate creation of a for-profit business enterprise?

Accepted Answer

The standard forms of business structure available to entrepreneurs are sole proprietorship, partnership, and corporation. While a sole proprietorship is the simplest and most common form of business, it offers no limited liability protection for the owner. On the other hand, a partnership offers limited liability protection to its partners, but there may be disagreements about decision-making and shared profits. Therefore, a corporation is often the best choice for entrepreneurs as it offers limited liability protection, centralized decision-making, and the ability to raise capital through the sale of stocks.

Quiz 1: Knowledge of Law As a Business Asset