Test Bank for Business Law in Canada, 13th Edition by Richard A. Yates, Trevor Clarke, Angus Ng & Teresa Bereznicki-Korol

Test Bank

Business Law in Canada, 13th Canadian Edition by Richard
Yates,|Updated 2026
Wickyaplus

,TEST BANK Business Law in Canada 13/CE Richard Yates
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Ch 1. Managing Your Legal Affairs
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1. In the x context of a sophisticated client, "sophisticated" can best be defined as
x x x x x x x x x x x

a. complicated, self-reliant, and cosmopolitan. x x x

b. refined and cultured. x x

c. simple and naïve. x x

d. confident, knowledgeable, and up to date. x x x x x

e. aggressive, dynamic, and forceful. x x x




2. Which of the following best describes the likelihood of a student becoming involved in
x x x x x x x x x x x x x

a situation necessitating legal advice?
x x x x x

a. A student, or someone close to a student, sometimes becomes involved in such a situation.
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b. A student, or someone close to the student, will always become involved in such a situation.
x x x x x x x x x x x x x x x

c. Because students are not business people, they never become involved in such situations.
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d. Because students cannot be sophisticated, they will often become involved in such situations.
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e. Legal advice is not available to students. x x x x x x




3. Raman is a sophisticated client. This means that she
x x x x x x x x

a. understands how to manage a lawyer-client relationship. x x x x x x

b. has a law degree. x x x

c. is a small business owner.
x x x x

d. manages her legal affairs without assistance from a lawyer. x x x x x x x x

e. will probably never find herself in a situation necessitating legal advice.
x x x x x x x x x x




4. Which of the following is not a good reason for a businessperson to seek advice from a lawyer?
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a. The businessperson cannot find the necessary legal information.
x x x x x x x

b. The businessperson cannot understand the necessary legal information.
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c. The necessary legal information is available online.
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d. It would take too long for the businessperson to find the necessary legal information.
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e. The businessperson is facing criminal charges.
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5. For sophisticated clients, the availability of an abundance of legal information online is
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a. a negative development, because online information is rarely accurate or helpful.
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b. a positive development, because it means that they will no longer need to retain lawyers as part
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of their team.x x x

c. a negative development, because accessing this information tends to be more costly than retaining
x x x x x x x x x x x x x

a lawyer. x x

d. a positive development, because it provides greater access to information they can use as part
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of their decision-making process.
x x x x

e. a neutral development, because lawyers are still the only ones able to access this information.
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6. When searching online for legal information, it is best to
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a. trust that if it is published online, it must be accurate.
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b. never trust the information found on a website.
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c. use American sources, as they tend to be more comprehensive than Canadian ones.
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d. gauge the accuracy of the information by the look of the website.
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e. seek input from a lawyer when answers cannot be readily found.
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7. Sophisticated clients x

a. do not need to retain a lawyer.
x x x x x x

b. know that it is better to hire a lawyer than to conduct research on one's own.
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c. are willing to pay for legal advice at any cost.
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d. tend to be embarrassed to request legal advice.
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e. have the skill and confidence to find basic legal information.
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,Ch 1. Managing Your Legal Affairs
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8. The primary purpose of an initial consultation with a lawyer is
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a. to arrange payment of the lawyer's fees up front.
x x x x x x x x

b. to develop strategies for dealing with the legal situation in question.
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c. for the prospective client to decide whether to retain the lawyer.
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d. for the prospective lawyer to help mediate the current dispute.
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e. to discuss the availability of Legal Aid.
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9. The decision to enter the lawyer-client relationship should be
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a. made quickly to ensure that no one else can retain your lawyer.
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b. solely up to the lawyer, as he or she is the one with the legal training.
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c. made primarily on the basis of cost.
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d. a mutual decision made primarily on the basis of trust.
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e. solely up the client, as the client is the one paying for the services.
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10. When someone refers you to a particular lawyer, you should
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a. retain the lawyer regardless of who gave you the referral.
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b. gauge the referral on the basis of the level of trust you have for the person making the referral.
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c. retain the lawyer regardless of their area of practice.
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d. ensure the referral is from a family member rather than a mere friend.
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e. ignore the referral as irrelevant. x x x x




11. A lawyer referral service
x x x

a. will enable a businessperson to retain a lawyer without need for an initial consultation.
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b. is an online fee-based service providing guaranteed results.
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c. regulates the legal profession in the interest of the public.
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d. provides the names and phone numbers of lawyers who practice in a particular area of law.
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e. is also known as "Legal Aid".
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12. A provincial law society
x x x

a. is a self-governing body for lawyers.
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b. has as its mandate the provision of free legal services in the public interest.
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c. operates primarily to offer low-cost legal advice to members.
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d. operates primarily to enhance the commercial interests of its members.
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e. is a self-governing body for businesspeople seeking legal advice.
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13. Becoming a sophisticated client willx x x x

a. ensure that a business person never needs a lawyer.
x x x x x x x x

b. help a business person manage her legal affairs more efficiently and effectively.
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c. result in a business person developing a bias against lawyers.
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d. relieve a business person from having to conduct legal research.
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e. protect a business person from needing legal advice.
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14. The Canadian Bar Association is
x x x x

a. the national society for legal aid services.
x x x x x x

b. a professional organization that represents judges and lawyers.
x x x x x x x

c. focused on enhancing public safety in the liquor distribution industry.
x x x x x x x x x

d. an organization responsible for reviewing lawyers' accounts.
x x x x x x

e. a disciplinary body for members of the legal profession.
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15. When setting up a small business, the best approach to follow is to assume that after
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the business has been set up and commences operating,
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, Ch 1. Managing Your Legal Affairs
x x x x x


a. the lawyer you chose to assist you in the start-up of the business will continue to represent you.
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b. the lawyer you chose to assist you in the start-up of the business will refer you to a different lawyer.
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c. a lawyer will no longer be required.
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d. you will not need legal advice, as long as you are a sophisticated client.
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e. the lawyer you chose to assist you in the start-up of the business will provide free legal services
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xfor the duration of the business's operation.
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16. Which of the following is not an advantage to maintaining an ongoing relationship with your lawyer?
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a. The lawyer will know and understand you and your business.
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b. The lawyer will be able to provide legal advice more efficiently, thereby reducing your legal costs.
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c. The lawyer will be able to customize legal advice so it will be even more useful to you.
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d. The lawyer will automatically track your business activities so that he or she can provide
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constant advice and guidance.
x x x x

e. The lawyer will be motivated to do even more for the client.
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17. Legal fees
x

a. are always calculated in a single, specified way.
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b. should not be discussed with a lawyer until a bill has been prepared.
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c. are typically negligible.
x x

d. should be discussed during the initial consultation with the lawyer.
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e. are rarely the subject of confusion or misunderstanding.
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18. Which of the following statements is correct?
x x x x x x

a. It is a popular misconception that legal services can be very costly.
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b. Some people don't retain lawyers even when they need them because they are afraid of the cost.
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c. All legal matters are billed to clients on an hourly basis.
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d. It is considered unprofessional to raise the issue of fees during a consultation with a lawyer.
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e. Lawyers should always be retained, regardless of the cost.
x x x x x x x x




19. Contingency fee agreements x x

a. are typically used for real estate purchases, the drafting of wills, and incorporations.
x x x x x x x x x x x x

b. are not subject to any restrictions.
x x x x x

c. are synonymous with retainer agreements.
x x x x

d. may result in a lawyer not receiving any legal fees for the work done on a file.
x x x x x x x x x x x x x x x x

e. must be prepared for all lawyer-client relationships.
x x x x x x




20. Which of the following statements regarding provincial law societies is false?
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a. Provincial law societies may restrict the use of contingency fee agreements.
x x x x x x x x x x

b. Provincial law societies may set maximum contingency fees for certain types of cases.
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c. Provincial law societies may offer a fee mediation service.
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d. Provincial law societies provide online information on lawyers' fees.
x x x x x x x x

e. Provincial law societies provide free legal services to people in need.
x x x x x x x x x x




21. Typically, lawyers bill their fees on the basis of which of the following?
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a. A fixed fee, an hourly rate, or a contingency fee
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b. A fixed fee, a pro rata distribution, or a contingency fee
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c. A stipend, a pro rate distribution, or an hourly rate
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d. A stipend, an hourly rate, or a contingency fee
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e. A fixed fee, a stipend, or a pro rata distribution
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