Final exam (Apr 13'09)[1]

Final exam (Apr 13'09)[1] - BROCK UNIVERSITY Final...

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Unformatted text preview: BROCK UNIVERSITY Final Examination, Winter 2009 Course: ACTG IP71 Date of Examination: April 13, 2009 Time of Examination: 2:00 pm. - 5:00 pm. Number of Pages: 13 Number of Students: 243 Number of Hours: 3 Instructor: Glen W. McCann All questions except 7, 8, 9, 10 and 11 are to be answered directly on this examination paper. Do NOT exceed the space provided. 7, 8, 9, 10 AND 11 ARE TO BE ANSWERED IN THE WORKBOOK PROVIDED. WRITE YOUR NAME, YOUR STUDENT NUMBER AND YOUR SEMINAR LEADER’S NAME ON THE FRONT OF THE WORKBOOK. ANY QUESTION OTHER THAN 7, 8, 9, 10 AND 11 ANSWERED IN THE WORKBOOK WILL NOT BE MARKED. NO EXAMINATION AIDS OTHER THAN THOSE SPECIFIED ARE PERMITTED. USE OR POSSESSION OF UNAUTHORIZED MATERIALS WlLL AUTOMATICALLY RESULT IN THE AWARD OF A ZERO GRADE FOR THIS EXAMINATION. Suggested Question Marks Minutes Awarded 1 22 41 2 12 22 3 21 36 4 8 14 5 7 13 6 4 7 7 4 7 8 4 7 9 5 9 l 0 4 7 1 l _9 lfi _ L_fl i1! NAME: STUDENT # Circle the name of your seminar leader: Brad Troup Chris Bittle Marita Adams Nicole Paduraru Patrick Maloney Stacey Wells ACTG IP71 Question 1 (24 marks) April 13, 2009 Page 2 of 13 pages From the list of expressions below select the answer which M completes the following sentences. Answers cannot be used more than once. passing off wrongful dismissal ‘pay in lieu of notice invitation to treat agents constructive dismissal bylaws causation management unsecured creditors acceptance redemption articles of incorporation 1. An employer cannot death unilateral pre-emptive directors preferred creditors common shareholders illegality officers preferred shareholders auditors fiduciary reasonable person voting terminate an employee discrimination just cause sole proprietorship expectation mitigate partnership inadvertance working notice rescission breach of warranty of authority on grounds seal secured creditors that defamation constitute ACTG IP71 10. April 13, 2009 Page 3 of 13 pages An employee who is advised that her employment will be terminated immediately and is given money by the employer to "sever" the employment relationship, has been given The "but for" test is a test for the element of negligence. The tort of consists of false statements that are damaging to a person's reputation. When an employer unilaterally changes the nature of a job and requires the employee to do something completely different or demotes the employee, the employee may claim that he has suffered A bet or wager may be an invalid contract on the grounds of An agent who exceeds both his actual and apparent authority can be sued by a third party for The most common formulation of the standard of care in a negligence case is the test. An agent is a of her principal which means, for example, that she must not compete with her principal. Any person who sues for damages must take reasonable steps to ACTG IP71 11. 12. 13. 14. 15. 16. 17. 18. 19. April 13, 2009 Page 4 of 13 pages All partners of a partnership are presumed to be able to enter contracts on behalf of the partnership, and are therefore of the partnership. A contract in which the offer is not accepted by communication but rather by performance of the act specified in the offer is called a contract. In the absence of a partnership agreement which provides otherwise, of a partner will dissolve the partnership. A limited partner must not participate in An award of damages for breach of contract is usually calculated to protect the interest of the innocent party. A partnership need not be formed intentionally, but may be formed by The of a corporation may describe the officers of the corporation and the responsibilities they will have. The of a corporation describes the various classes of shares the corporation may issue. The appropriate remedy where a victim of duress seeks to set aside a contract is ACTG IP71 20. 21. April 13, 2009 Page 5 of 13 pages The of a corporation manage and supervise the management of the business of a corporation, but they may delegate some of these duties to one or more (2 Marks) When a corporation is liquidated or dissolved, the order in which people get paid from the assets of the corporation is as follows: (a) (b) (0) (d) (e) ACTG IP71 April 13, 2009 Page 6 of 13 pages QUESTION 2 (12 Marks) Select a total of THREE of the following concepts or cases (you may choose a mix; it doesn't have to be three cases or three concepts). For each of your selections: (a) if it is a case, explain the legal proposition for which the case stands and explain why the case represented a significant advance in business law; (b) if it is a concept, explain what the concept means, explain its significance in business law and give an example where the concept is relevant. You may write your answers on the following blank sheet. (DO NOT EXCEED THE SPACE PROVIDED) CASES: Carlill v. Carbolic Smoke Ball Co. Hedley Byrne v. Heller Donoghue V. Stevenson Haig v. Bamford Hadley V. Baxendale CONCEPTS: unjust enrichment injunction exemption clauses wrongful dismissal specific performance working notice the indoor management rule frustration contributory negligence constructive dismissal ratification quantum meruit oppression remedy (THIS PAGE IS INTENTIONALLY BLANK) ACTG IP71 April 13, 2009 Page 7 of 13 pages Question 3 (21 Marks - 7 @ 3 each) For each of the following terms/concepts provide a brief definition and an explanation of why it is significant. (You may find it useful to provide a short example). 1. apparent authority 2. undue influence 3. mitigation ACTG IP71 4. fiduciary duty 5. insurable interest April 13, 2009 Page 8 of 13 pages ACTG IP71 April 13, 2009 6. liquidated damages 7. unanimous shareholders agreement Page 9 of 13 pages ACTG IP71 April 13, 2009 Page 10 of 13 pages Question 4 (8 Marks) (1) (2 marks) What is the definition of a contract? (II) (3 marks) What is the definition of a partnership? (III) (3 marks) The partnership agreement between you and your 3 partners provides that you share expenses and losses equally. What is the significance of this to a major creditor of the partnership business who is having difficulty getting paid by the partnership? ACTG IP71 April 13, 2009 Page 11 of 13 pages Question 5 (7 marks) The ability to bring a derivative action is an important protection for shareholders in the Ontario Business Corporations Act. Why was it necessary to give this protection and how does it work? ACTG IP71 April 13, 2009 Page 12 of 13 pages Question 6 (4 marks) Shareholders of a corporation have limited liability, which means that they risk only the money that they have paid for their shares. The Ontario Business Corporation Act contains several provisions to ensure that shareholders may not extract money from the corporation to the detriment of creditors. Describe o_ne of these provisions in detail (section numbers are not important), including the sanctions imposed for failing to abide by the rules. ACTG IP71 April 13, 2009 Page 13 of 13 pages QUESTIONS 7, 8, 9, 10 AND 11 ARE TO BE ANSWERED IN THE WORKBOOK PROVIDED. WRITE YOUR NAME, STUDENT NUMBER AND SEMINAR LEADER’S NAME ON THE FRONT OF THE WORKBOOK. Question 7 (4 marks) Describe the difference between an employee and an independent contractor and provide one (1) reason why it may be significant to make the distinction. Question 8 (4 marks) What is meant by the expression "piercing the corporate veil" and under what circumstances would the court do it? Question 9 (5 marks) Stan is a director of Acme Pipelines Limited. The corporation has decided to invest a substantial amount of money into new manufacturing equipment. Stan is aware of a corporation, Dynamic Engineering Inc., which could build the machinery. Stan is a director and a substantial shareholder of Dynamic and he knows that it is struggling in business and would be desperate to obtain a contract such as this. (a) (3 marks) Does Stan have any specific obligations to fulfil to Acme or Dynamic or both before their respective boards of directors approve a contract? What specific steps must Stan take? (b) (2 marks) Would your answer be any different if Stan held shares in both corporations but was not a director or officer of either? Question 10 (4 marks) From a legal and an accounting perspective what are both the authorized capital and the issued capital of a corporation? Question 11 (9 marks) Discuss the principles that apply in determining whether the courts will enforce a restrictive covenant (ie. a "non-competition" clause). In particular discusss with details, the prospects for enforceability of such covenants where they are written into the following contracts: (a) an employment contract of a low-level employee (b) an employment contract of a senior manager of a large business (c) an agreement of purchase and sale by which a business is sold to a purchaser \\Smb_nf\main-t\USERS\gelinas\Brock\2009\Final.exam (April 13, 2009).doc ...
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Final exam (Apr 13'09)[1] - BROCK UNIVERSITY Final...

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