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FUNDAMENTALS OF CANADIAN BUSINESS LAW, 2ND EDITION
(WILLES) EXAM 2026 LATEST VERSION QUESTIONS AND ANSWERS
2026 EDITION
FUNDAMENTALS OF CANADIAN BUSINESS LAW, 2ND EDITION (WILLES)
EXAMINATION
250 Questions with Rationales
SECTION 1: THE CANADIAN LEGAL SYSTEM (Questions 1-40)
Question 1
According to the textbook, what is the doctrine of stare decisis?
A) The principle that judges must follow previous decisions in similar cases
B) The rule that all laws must be written in statutes
C) The requirement that courts must follow the Civil Code
D) The principle that equity prevails over common law
Rationale: The correct answer is A. The doctrine of stare decisis is the theory of precedent.
Judges are expected to apply previous decisions to similar cases which come before them in
order to maintain a degree of consistency in the law . By following this doctrine, the law is
not only consistent, but others can predict how the law may be applied in similar situations.
Question 2
In Canada, the two main legal systems that coexist are:
A) Statutory law and regulatory law
B) Common law and civil law
C) Federal law and municipal law
D) Constitutional law and administrative law
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Rationale: The correct answer is B. Common law consists of the recorded judgments of the
courts. The civil code is a written body of law . The common law system applies in all
provinces and territories except Quebec, which follows the Civil Code of Quebec.
Question 3
What is the key difference between the Common Law system and the Civil Code
system?
A) Common law is based on statutes; civil code is based on judicial decisions
B) Common law consists of recorded judgments of the courts; the civil code is a written body
of law
C) Common law applies only in Quebec; civil code applies everywhere else
D) Common law is older than the civil code
Rationale: The correct answer is B. The Common Law consists of the recorded judgments of
the courts. The civil code is a written body of law . Merits of civil code: laws are written
down and may be consulted to determine what the law is. Merits of common law: flexible, as
judges may change it through interpretation, or by distinguishing the case at hand from the
precedent.
Question 4
The supremacy of the state was reached when:
A) The state created its first written constitution
B) The state exercised sufficient control over individuals to compel them to use the state
judicial system rather than vengeance
C) The state established its first police force
D) The state created its first legislative body
Rationale: The correct answer is B. When the state lacked the power to control its citizens,
individuals used their own means to resolve disputes, as it was the only method whereby a
person could obtain redress . Once the state had the power to compel citizens to obey its
decrees, it could substitute orderly procedures for settlement.
Question 5
Which of the following statements about equity is correct?
A) Equity is a separate legal system that always prevails over common law
B) Equity and common law have different roots, but where conflict exists, equity prevails
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C) Equity is only relevant in Quebec
D) Equity has been abolished in Canada
Rationale: The correct answer is B. Common Law and equity have different roots. The
principles of equity were originally principles or rules which the King applied in settling
disputes which did not fall within the jurisdiction of the common law courts . At present, the
courts may apply both common law and equity, but where conflict exists, equity prevails.
Question 6
The standard of proof in a civil case is:
A) Proof beyond a reasonable doubt
B) A balance of probabilities
C) Clear and convincing evidence
D) Preponderance of the evidence
Rationale: The correct answer is B. The standard of proof for tort actions is on a balance of
probabilities . This means that the plaintiff must prove that it is more likely than not that the
defendant committed the wrongful act.
Question 7
Substantive law differs from procedural law in that:
A) Substantive law sets out the rights and duties of individuals; procedural law sets out the
procedure for enforcing those rights
B) Substantive law is federal; procedural law is provincial
C) Substantive law is written; procedural law is unwritten
D) Substantive law applies only to businesses
Rationale: The correct answer is A. Substantive law sets out the rights and duties of
individuals and corporations. Procedural law sets out the procedure whereby substantive laws
are enforced .
Question 8
A bill becomes a law in Canada when:
A) It is first introduced in Parliament
B) It passes second reading
C) It receives royal assent
D) It is passed by the Senate only
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Rationale: The correct answer is C. Once a bill has been passed by the House of Commons
and Senate (or a provincial legislature) it goes to the Governor-General (or Lieutenant-
Governor, if provincial) for royal assent. The bill becomes a law on receipt of royal assent,
and effective as a law when proclaimed in force .
Question 9
What is the correct sequence for a bill to become law in Canada?
A) First reading, second reading, committee, third reading, royal assent
B) Committee, first reading, second reading, third reading, royal assent
C) First reading, committee, second reading, royal assent, third reading
D) Royal assent, first reading, second reading, committee, third reading
Rationale: The correct answer is A. The usual process is: a bill is presented, a motion is
made to have the bill 'read' a first time, the bill is printed and circulated for study, the bill is
brought forward for debate (second reading) in principle, if passed it is sent to a Committee
for study, once passed by Committee it is reported for a third reading, the bill is debated for a
final time, if passed it goes to the Senate (for federal bills), once passed by both Houses it
receives royal assent and becomes law .
Question 10
A "regulation" made under a statute differs from other laws because:
A) It is made by the legislature itself
B) It is a rule made to enable an administrative tribunal to carry out duties assigned to it
under a statute
C) It applies only to federal matters
D) It has the same status as the Constitution
Rationale: The correct answer is B. A regulation under a statute is a rule that is made to
enable an administrative tribunal to carry out duties assigned to it under a statute .
Regulations govern the activities of administrative agencies or boards, and are often
administered by them.
Question 11
Public laws are enforced by:
A) Private individuals
B) The Crown against the individual
FUNDAMENTALS OF CANADIAN BUSINESS LAW, 2ND EDITION
(WILLES) EXAM 2026 LATEST VERSION QUESTIONS AND ANSWERS
2026 EDITION
FUNDAMENTALS OF CANADIAN BUSINESS LAW, 2ND EDITION (WILLES)
EXAMINATION
250 Questions with Rationales
SECTION 1: THE CANADIAN LEGAL SYSTEM (Questions 1-40)
Question 1
According to the textbook, what is the doctrine of stare decisis?
A) The principle that judges must follow previous decisions in similar cases
B) The rule that all laws must be written in statutes
C) The requirement that courts must follow the Civil Code
D) The principle that equity prevails over common law
Rationale: The correct answer is A. The doctrine of stare decisis is the theory of precedent.
Judges are expected to apply previous decisions to similar cases which come before them in
order to maintain a degree of consistency in the law . By following this doctrine, the law is
not only consistent, but others can predict how the law may be applied in similar situations.
Question 2
In Canada, the two main legal systems that coexist are:
A) Statutory law and regulatory law
B) Common law and civil law
C) Federal law and municipal law
D) Constitutional law and administrative law
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Rationale: The correct answer is B. Common law consists of the recorded judgments of the
courts. The civil code is a written body of law . The common law system applies in all
provinces and territories except Quebec, which follows the Civil Code of Quebec.
Question 3
What is the key difference between the Common Law system and the Civil Code
system?
A) Common law is based on statutes; civil code is based on judicial decisions
B) Common law consists of recorded judgments of the courts; the civil code is a written body
of law
C) Common law applies only in Quebec; civil code applies everywhere else
D) Common law is older than the civil code
Rationale: The correct answer is B. The Common Law consists of the recorded judgments of
the courts. The civil code is a written body of law . Merits of civil code: laws are written
down and may be consulted to determine what the law is. Merits of common law: flexible, as
judges may change it through interpretation, or by distinguishing the case at hand from the
precedent.
Question 4
The supremacy of the state was reached when:
A) The state created its first written constitution
B) The state exercised sufficient control over individuals to compel them to use the state
judicial system rather than vengeance
C) The state established its first police force
D) The state created its first legislative body
Rationale: The correct answer is B. When the state lacked the power to control its citizens,
individuals used their own means to resolve disputes, as it was the only method whereby a
person could obtain redress . Once the state had the power to compel citizens to obey its
decrees, it could substitute orderly procedures for settlement.
Question 5
Which of the following statements about equity is correct?
A) Equity is a separate legal system that always prevails over common law
B) Equity and common law have different roots, but where conflict exists, equity prevails
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C) Equity is only relevant in Quebec
D) Equity has been abolished in Canada
Rationale: The correct answer is B. Common Law and equity have different roots. The
principles of equity were originally principles or rules which the King applied in settling
disputes which did not fall within the jurisdiction of the common law courts . At present, the
courts may apply both common law and equity, but where conflict exists, equity prevails.
Question 6
The standard of proof in a civil case is:
A) Proof beyond a reasonable doubt
B) A balance of probabilities
C) Clear and convincing evidence
D) Preponderance of the evidence
Rationale: The correct answer is B. The standard of proof for tort actions is on a balance of
probabilities . This means that the plaintiff must prove that it is more likely than not that the
defendant committed the wrongful act.
Question 7
Substantive law differs from procedural law in that:
A) Substantive law sets out the rights and duties of individuals; procedural law sets out the
procedure for enforcing those rights
B) Substantive law is federal; procedural law is provincial
C) Substantive law is written; procedural law is unwritten
D) Substantive law applies only to businesses
Rationale: The correct answer is A. Substantive law sets out the rights and duties of
individuals and corporations. Procedural law sets out the procedure whereby substantive laws
are enforced .
Question 8
A bill becomes a law in Canada when:
A) It is first introduced in Parliament
B) It passes second reading
C) It receives royal assent
D) It is passed by the Senate only
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Rationale: The correct answer is C. Once a bill has been passed by the House of Commons
and Senate (or a provincial legislature) it goes to the Governor-General (or Lieutenant-
Governor, if provincial) for royal assent. The bill becomes a law on receipt of royal assent,
and effective as a law when proclaimed in force .
Question 9
What is the correct sequence for a bill to become law in Canada?
A) First reading, second reading, committee, third reading, royal assent
B) Committee, first reading, second reading, third reading, royal assent
C) First reading, committee, second reading, royal assent, third reading
D) Royal assent, first reading, second reading, committee, third reading
Rationale: The correct answer is A. The usual process is: a bill is presented, a motion is
made to have the bill 'read' a first time, the bill is printed and circulated for study, the bill is
brought forward for debate (second reading) in principle, if passed it is sent to a Committee
for study, once passed by Committee it is reported for a third reading, the bill is debated for a
final time, if passed it goes to the Senate (for federal bills), once passed by both Houses it
receives royal assent and becomes law .
Question 10
A "regulation" made under a statute differs from other laws because:
A) It is made by the legislature itself
B) It is a rule made to enable an administrative tribunal to carry out duties assigned to it
under a statute
C) It applies only to federal matters
D) It has the same status as the Constitution
Rationale: The correct answer is B. A regulation under a statute is a rule that is made to
enable an administrative tribunal to carry out duties assigned to it under a statute .
Regulations govern the activities of administrative agencies or boards, and are often
administered by them.
Question 11
Public laws are enforced by:
A) Private individuals
B) The Crown against the individual
