GMGT 3300 STUDY TEST QUESTIONS
WITH ALL CORRECT ANSWERS
What survives bankruptcy - Answer-Studet loans survive bankruptcy
Almony and support payments surive
RRsps survive
Creditor proof assets survive
Secured transactions - Collateral security - Answer-interest in property of a debtor to
which creditor may look in the vent of non payment of debt
Professional liability is expanding - Answer-1) because the practice of professionals is
becoming more complex so there is greater chance of making an error, 2) there is a
tendency for professionals to take on more clients and files due to economic pressures,
3) clients are more aggressive, sophisticated and litigious, 4) normal rules of negligence
law are being applied to professionals and thus professional liability is expanding due to
various court cases
Manifestations of grautitous promises - Answer-Past Consideration
Existing legal duties and consideration
Duty to Mitigate - Answer-A person who has sustained a loss as a result of a breach of
contract must do what they can to limit the extent of their loss. The damages they
recover at law will not include what they might have reasonably avoided.
Minority shareholders - Locked In - Answer-MS will have a hard time selling their shares
as no one wants them, so they must sell at a huge discount or sell them to majority
shareholders to get rid of them. Most often, they are unable to sell and must remain a
minority shareholder.
Minority shareholders - Frozen Out - Answer-MS do not have the votes to get
somebody on the BOD, therefore they are frozen out of management (lack
power/control)
Minority Shareholders - Remedy - Answer-Use of provisions in shareholders agreement
and shot-gun clause which gives MS option to sell their shares at a fair price.
Breach of Contract - Equitable Remedies - Answer-Specific performance: court orders
the defendant to complete a specific act.
, Injunction: court order restraining a party from acting in a particular manner
Rescission: to restore the parties to the position they would have been had the contract
not been made.
Elements for the imposition of an equitable remedy in contract law. - Answer-1. Plaintiff
must have clean hands (no unethical conduct)
2. Can't be a long delay to bring about the breach
3. Requires substantial consideration
4. Can't affect an innocent 3rd party
5. Plaintiff must ordinarily be a party again when the remedy would be awarded were
they a defendant instead (Minor Contracts)
Define a guarantee - Answer-Person who promises to answer for the default of the
principal debtor. Usually arises when a creditor refuses to advance money/goods solely
on the debtor's promise to pay for them.
What is a LP and Dangers of it? - Answer-Partnership where partners limit their liability
to amount of their capital contribution in order to protect personal assets. Cannot take
active role in management. Used for investment purposes and tax avoidance purposes.
Purpose of Damage awards in Tort and Contract Law - Answer-Tort - to place injured
party in same position had the tort not occurred.
Contract - to place injured party in same position had the contract been completed.
Standard of Proof - Civil and Criminal - Answer-Specific elements that must be proven
in tort law. Civil law it is the balance of probabilities (>50%) requires intention,
causation, proscribed harm be proven.
Criminal cases - guilty beyond reasonable doubt (>90%)
Sine qua non - Answer-But-for test. The accident would not have occured but for the
defendants negligence.
4 Duties agent owes to his principal - Answer-- Duty to comply with contract
- Duty of care
- Personal performance
- Good faith
Liberal approach to contract interpretaton - Answer-Looks at intent of the parties and
surrounding circumstances, does not ignore words actually used. Looks at negotiations,
knowledge of parties. Can lead to endless speculation.
WITH ALL CORRECT ANSWERS
What survives bankruptcy - Answer-Studet loans survive bankruptcy
Almony and support payments surive
RRsps survive
Creditor proof assets survive
Secured transactions - Collateral security - Answer-interest in property of a debtor to
which creditor may look in the vent of non payment of debt
Professional liability is expanding - Answer-1) because the practice of professionals is
becoming more complex so there is greater chance of making an error, 2) there is a
tendency for professionals to take on more clients and files due to economic pressures,
3) clients are more aggressive, sophisticated and litigious, 4) normal rules of negligence
law are being applied to professionals and thus professional liability is expanding due to
various court cases
Manifestations of grautitous promises - Answer-Past Consideration
Existing legal duties and consideration
Duty to Mitigate - Answer-A person who has sustained a loss as a result of a breach of
contract must do what they can to limit the extent of their loss. The damages they
recover at law will not include what they might have reasonably avoided.
Minority shareholders - Locked In - Answer-MS will have a hard time selling their shares
as no one wants them, so they must sell at a huge discount or sell them to majority
shareholders to get rid of them. Most often, they are unable to sell and must remain a
minority shareholder.
Minority shareholders - Frozen Out - Answer-MS do not have the votes to get
somebody on the BOD, therefore they are frozen out of management (lack
power/control)
Minority Shareholders - Remedy - Answer-Use of provisions in shareholders agreement
and shot-gun clause which gives MS option to sell their shares at a fair price.
Breach of Contract - Equitable Remedies - Answer-Specific performance: court orders
the defendant to complete a specific act.
, Injunction: court order restraining a party from acting in a particular manner
Rescission: to restore the parties to the position they would have been had the contract
not been made.
Elements for the imposition of an equitable remedy in contract law. - Answer-1. Plaintiff
must have clean hands (no unethical conduct)
2. Can't be a long delay to bring about the breach
3. Requires substantial consideration
4. Can't affect an innocent 3rd party
5. Plaintiff must ordinarily be a party again when the remedy would be awarded were
they a defendant instead (Minor Contracts)
Define a guarantee - Answer-Person who promises to answer for the default of the
principal debtor. Usually arises when a creditor refuses to advance money/goods solely
on the debtor's promise to pay for them.
What is a LP and Dangers of it? - Answer-Partnership where partners limit their liability
to amount of their capital contribution in order to protect personal assets. Cannot take
active role in management. Used for investment purposes and tax avoidance purposes.
Purpose of Damage awards in Tort and Contract Law - Answer-Tort - to place injured
party in same position had the tort not occurred.
Contract - to place injured party in same position had the contract been completed.
Standard of Proof - Civil and Criminal - Answer-Specific elements that must be proven
in tort law. Civil law it is the balance of probabilities (>50%) requires intention,
causation, proscribed harm be proven.
Criminal cases - guilty beyond reasonable doubt (>90%)
Sine qua non - Answer-But-for test. The accident would not have occured but for the
defendants negligence.
4 Duties agent owes to his principal - Answer-- Duty to comply with contract
- Duty of care
- Personal performance
- Good faith
Liberal approach to contract interpretaton - Answer-Looks at intent of the parties and
surrounding circumstances, does not ignore words actually used. Looks at negotiations,
knowledge of parties. Can lead to endless speculation.
