QUIZ FIVE

BUS166 - Business Law Quiz Five

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Lethbridge College Jan-08

BUS166 - Business Law Quiz Five

QUIZ FIVE

Quiz Five Directives

Value
10% of the final grade

Time Allotted
The time limit for this exam is 60 minutes.

Instructions
1. Please ensure that your name, date and other information is printed on the first page of the examination paper before you hand it in. 2. If a Scantron sheet is being used, print your name on it as well. You must use a pencil for the Scantron sheet. Check carefully to ensure you mark in the correct space on the Scantron sheet for each answer. 3. There are 15 pages (including the cover page and this directive). Please ensure you have the complete exam package. 4. Read each question carefully before responding. 5. Print/write responses so they are legible, otherwise no mark will be awarded. 6. If there are multiple-choice questions but no Scantron card, select your response by circling one letter on the Exam paper. 7. Any cheating will result in a mark of 0. 8. Part marks may be awarded, so do not leave blanks. All the best!

Mark: ____________ /60

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 2

QUIZ FIVE

Quiz Five (Chapters 24-27)

Choose the best answer from the possible choices and record your selection on the answer sheet provided. Questions are worth one mark each. 1. The greatest interest that a person may own in land is referred to as a. life estate b. life interest c. complete interest d. life tenant e. fee simple 2. A life estate is a. a holder of a life estate b. a fixed time during which a person holds an interest in land c. an interest in land that is closest to complete ownership d. an interest in land that is indeterminate in time e. an interest in land held for the life of one person 3. A life tenant is a. a holder of a life estate b. an interest in land that is closest to complete ownership c. an estate in land held for the life of one person d. a fixed time during which a person holds an interest in land e. an interest in land that is indeterminate in time 4. Jack and Mary are married. Jack wants to ensure that when he passes away, his interest in their home will revert to Mary. What should Jack and Mary do? a. Jack and Mary should take title to their home as tenants in common. b. Mary should register her entitlement to Jack's interest in their home. c. Jack and Mary should register their interest with the land registry. d. Jack and Mary should take title to their home as Joint Tenants. e. Jack should write a letter of intent to be filed with the land registrar's office indicating his wish that his interest revert to his wife, Mary.

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 3

QUIZ FIVE
5. Which of the following can create an easement? a. Permission from your neighbour to hold a garage sale in his yard b. The right to use your neighbours driveway to reach the garage on your property c. The right to exclusive occupation of a building for 25 years d. The right to go onto your neighbours property to extract coal e. All of the above 6. Tenancy in common and joint tenancy are distinguished by a. leasehold interests b. legal fees c. probate fees d. probate e. the right of survivorship 7. Mary and Jack are tenants in common; when either party dies, his or her share of their home will a. go to the other party b. go to his or her parents c. be given to a third party d. go to their children e. go to his or her heirs 8. The owner of a condominium has ________ of his or her unit, and ________ of common areas. a. exclusive ownership; tenant in common ownership b. joint tenancy with others; joint ownership c. non-exclusive possession; part ownership d. part ownership; part ownership e. joint tenancy with others; tenancy in common 9. Concurrent holders of equal shares in an estate without a right of survivorship are referred to as a. remaindermen b. tenants in common c. lessees d. joint tenants e. lessors
Lethbridge College Jan-08 BUS166 - Business Law Quiz Five - 4

QUIZ FIVE
10. Which of the following is not an element of adverse possession? a. The possessor must stay on the property of the owner. b. The possessor must use the property as if he or she were the owner. c. The possessor must ask the permission of the owner. d. The possession must be open and notorious. e. The possessor must ignore the claims of other persons including the owner. 11. When title to land is taken by government pursuant to statute, this is known as a. reservation b. transfer c. levy execution d. transfer by operation of statute e. expropriation 12. Jack enters into a verbal agreement with the owner of a home. He will reside in one of the rooms in the home and will share the kitchen with the owner. He does not sign a formal lease and he is advised that he can leave the premises at any time upon the provision of a month's notice. Likewise the landlord may ask him to leave the premises upon the provision of a month's notice. Jack's tenancy is a. leasehold tenancy b. a periodic tenancy c. a tenancy at will d. a tenancy at sufferance e. term certain tenancy 13. Jack is on vacation and enters into an agreement with the owner of a home. He will reside in one of the rooms in the home and will share the kitchen with the other tenants. He will vacate the premises at the end of his vacation, in one month. If at the end of the month Jack does not vacate the premises and the landlord does not agree to Jack staying on, Jack becomes a(n) a. periodic tenant b. tenant at will c. tenancy at sufferance d. overholding tenant e. term certain tenant

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 5

QUIZ FIVE
14. The landlord's covenant of quiet enjoyment means that a. the tenant will not make excessive noise that could disturb others, including the landlord and other tenants b. the landlord will not do anything to interfere with the tenant's possession and use of the premises c. the landlord will not make excessive noise that could interfere with the right of the tenant to peace and quiet d. the tenant will not bring other persons onto the premises e. the tenant will not disturb other tenants 15. Where there has been a breach of the lease contract, a landlord, in addition to suing for damages, has a duty a. to return the property of the tenant to the tenant b. to mitigate damages c. to re-enter the premises to seize the property of the tenant d. to report the breach to the rental tribunal e. to check to determine whether there has been any damage to the property 16. The right of the landlord to seize the assets of the tenant to sell them to realize rental arrears is called a. distress b. surrender c. termination d. re-entry e. forfeiture 17. Objects that are attached to the land or a building, but are distinguished from the land itself are called a. chattels b. accessories c. fixings d. fixtures e. additions to land

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 6

QUIZ FIVE
18. Jack enters into a lease with Mary for a term of one year. After six months Mary grants a mortgage over the leased property to the Royal Bank of Canada. A month later Mary defaults under the mortgage. Which of the following is false? a. The Royal Bank of Canada may claim the reversion. b. The Royal Bank of Canada is bound by the lease and cannot obtain possession. c. Jack can continue to observe the terms of the lease. d. The Royal Bank of Canada's title is subject to lease. e. The Royal Bank of Canada can evict Jack and sell the property. 19. The abandonment by the tenant of the premises during the term of the lease is called a. forfeiture b. distress c. termination d. right or re-entry e. surrender 20. A borrower who conveys the interest in land as security for a loan is called a. a lender b. a insured c. a mortgagee d. a pledgor e. a mortgago 21. The right of a mortgagor to redeem the property upon the payment of the debt in full is called a. the equity of redemption b. the equitable right c. the foreclosure d. the right in equity e. the equity

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 7

QUIZ FIVE
22. Under the land titles system, mortgages are referred to as a. charges against title b. land rights c. equitable guarantees d. equitable title e. pledges 23. Which of the following is not a covenant of the mortgagor? a. To keep the premises in a reasonable repair b. To pay the taxes on the land and the buildings c. To keep the property adequately insured in the name of the mortgagee d. To execute the necessary discharge of the mortgage upon payment in full e. To pay the debt and accrued interest, at the stipulated times 24. A mortgage that permits repayment of the debt at any time without notice or penalty is called a. a partial mortgage b. a closed mortgage c. an insured mortgage d. a conventional mortgage e. an open mortgage 25. Michael misses a mortgage payment and receives a letter from the bank advising him that he owes $155,000 plus interest and costs. The bank has most likely a. invoked an exemption clause in the mortgage contract b. breached the mortgage contract c. invoked the acceleration clause in the mortgage contract d. misrepresented Michaels position e. made a mistake

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 8

QUIZ FIVE
26. A discharge of a mortgage acknowledges that a. the mortgagor has assigned the mortgage to a third party b. the mortgage has reached maturity c. the mortgagee is prepared to renew the mortgage d. the mortgage has been rejected by the mortgagee e. the mortgage debt has been paid off in full 27. If a mortgagee does not register the mortgage, the mortgagee a. loses the right to foreclose on the property b. loses the right to have a court supervised sale c. loses the right to sue the mortgagor d. cannot enforce the mortgage against the property if it is sold to a third party e. all of the above 28. Which of the following is false regarding a Charge and Mortgage? a. Under the land titles system, mortgages are called charges. b. A Charge preserves the legal interests of the mortgagor. c. The remedy for a default under a Charge is the sale of the land that is charged. d. A mortgage is the conveyance of an interest in land as security for a debt. e. A Charge is a lien upon the land. 29. Which of the following is not true regarding second mortgages? a. A second mortgagee's interest is in the fee simple. b. A second mortgagee ranks behind the first in priority. c. A mortgagor who wishes to give a second mortgage can only give an interest in the equity of redemption. d. A second mortgage does not convey the legal title to the mortgagee. e. In the event of a default and sale of the property, the second mortgagee is paid to the extent that there is a surplus after paying of the first mortgage.

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 9

QUIZ FIVE
30. Timothy worked on the Salmon Queen fishing trawler off the coast of British Columbia last summer. He was paid according to the profits the boat made from each week's catch. In the legal sense, Timothy is a. a partner with the others in the crew b. working under contract for the boat's owner c. getting commissions as defined by the owner d. a limited partner, not having the usual partnership liability e. an employee getting paid on the basis of the employer's profits 31. Two years ago the Citizens Bank lent The Carlin & Hickel Partnership two million dollars. Now the firm is defaulting on their monthly payments. Who of the following will be liable on this loan? a. all six limited partners b. a partner that died six months ago c. a partner that retired from the firm last summer and obtained, through novation, a liability release from this loan d. the wife of a general partner e. a partner who has been with the firm for less than two years 32. Which one of the following statements is true regarding partnerships? a. A partnership exists wherever two or more parties carry on transaction jointly. b. A partner is liable for the torts of other partners during the ordinary course of business. c. If there are more than two parties in a partnership, a majority vote is not only sufficient but also a requirement in making decisions. d. The law recognises only those partnerships that are formed by the express (written or verbal) agreement of two or more parties. e. A limited partnership is where none of the partners can be held liable beyond a certain monetary limit.

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 10

QUIZ FIVE
33. You do not trust your partners and are concerned about liabilities you may incur if you continue to associate with them in business. To ensure that you are safe from any future liability toward third parties that did business with the partnership while you were a partner, you should a. get your partners to sign an acknowledgement that you will not be responsible towards third parties that have a claim against the partnership b. retire and send a notice to all third parties who did business with the partnership c. sell your partnership interest to someone else d. retire and place a legal notice in the official provincial government publication e. none of the above will protect you 34. For the last 14 months Greer has been a junior partner in a Vancouver law firm. Until now he was receiving a monthly salary of $5000. Senior partners have just decided to stop all salaries because of a pending lawsuit against the firm. It was determined the firm would not make profits for at least the next eight months. Is the firm obliged to continue Greer's salary? a. Yes, since salaries are the first call on the firm's profits. b. Yes, since salaries are an expense that comes off before profits are figured. c. No, since the firm cannot claim the doctrine of frustration. d. Yes, since Greer has a wife and kids that are dependant on the salary for basic living expenses. e. No, since partners can only be paid out of profits. 35. Partners have a fiduciary duty one to another. This might take the form of a. looking after one another's health and welfare b. rendering to the other partners true accounts and full information of all things affecting the partnership c. giving the partnership the first right of refusal on personal investments d. accounting to the firm for any benefits derived from transactions outside the realm of the partnership e. competing with the partnership with some similar type of business

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 11

QUIZ FIVE
36. The CEO of a corporation is a. appointed by the board of directors b. chosen from the board of directors c. elected by the shareholders d. in charge of the board meetings e. hired by the president 37. Which of the following is not a duty of the Directors of corporations? a. to call meetings of shareholders b. to declare dividends c. to issue shares d. to adopt by-laws governing the business e. to take care of the day-to-day business of the corporation 38. The only real power shareholders have in a corporation is to a. fill a sudden vacancy on the board of directors b. elect the board of directors c. manage the ownership of the company d. control stock splits and dividends e. give the directors guidelines in the investment of capital 39. Directors owe a duty to act with a view to the best interests of a. the creditors b. the shareholders who elected them c. the corporation d. the employees e. all of the above TRUE OR FALSE. Note that on the answer sheet, for true or false questions, "A" is true and "B" is false. 40. A fee simple interest is said to be an indefinite interest in land. a. True b. False

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 12

QUIZ FIVE
41. A life estate can be devised only if the life tenant is not the measuring life. a. True b. False 42. Michael buys a piece of land on which he wishes to build a home. The land is surrounded by a fence. The fence is not included in the purchase. a. True b. False 43. Mary's tenancy is due to end on June 2, 2003. On that date Mary does not leave the premises and pays the landlord rent for another month. The term certain tenancy is converted into a tenancy at sufferance. a. True b. False 44. A leasehold interest is said to exist for a definite time period. a. True b. False 45. A reverse mortgage results in the mortgagor receiving periodic advances from the mortgagee. a. True b. False 46. The rights of a mortgagee cannot be assigned. a. True b. False 47. A partnership is a business relationship between two or more persons, but not all business relationships between two or more persons are partnerships. a. True b. False 48. Partnerships can only come into existence by way of express agreement. a. True b. False

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 13

QUIZ FIVE
49. Except by way of agreement, a limited partner cannot become a general partner. a. True b. False 50. General partners are said to be jointly liable, but not severally liable. a. True b. False 51. If a corporation is profitable, directors must declare a dividend to holders of common shares according to their proportionate shareholding. a. True b. False 52. If a corporation is insolvent, directors can be held strictly liable to employees of the corporation for a certain amount of unpaid wages. a. True b. False 53. Although a corporation is a legal person in law, all the affairs of a corporation are conducted by its agents. a. True b. False 54. Using a legal element in all communications of the corporation safeguards the shareholders from personal liability. a. True b. False 55. Shareholders who become personally involved in the management of the corporation lose their limited liability status. a. True b. False 56. When a corporation is liquidated, the first group of persons to be paid are the preferred creditors. a. True b. False

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 14

QUIZ FIVE
57. Preferred shares are so called because they are usually preferred by most persons over other kinds of shares. a. True b. False 58. A bondholder is a true investor in a corporation as their return is dependent upon profit. a. True b. False 59. Edie is the only shareholder and director of Edie Inc., a corporation incorporated by Edie 2 years ago. Edie is also the president of Edie Inc. Edie Inc. has no employees and no assets. Edie will be personally liable to creditors of Edie Inc. a. True b. False 60. A private corporation is one that is not permitted to offer its shares to the public. a. True b. False

Lethbridge College Jan-08

BUS166 - Business Law Quiz Five - 15