Commercial Law (Canada) — Comprehensive Final
LGST 369 – COMMERCIAL LAW EXAM QUESTIONS AND
CORRECT ANSWERS | latest 2026/2027
LGST 369 Commercial Law
COMMERCIAL LAW (CANADA)
1. Under the Constitution Act, 1867, which of the following matters falls
within exclusive federal jurisdiction?
A. Provincial consumer protection legislation
B. Regulation of local real estate brokers
C. Bills of exchange and promissory notes
D. Property and civil rights in the province
ANSWER : C. Bills of exchange and promissory notes
Section 91 assigns banking, bills of exchange, promissory notes, interest and
bankruptcy to Parliament; property and civil rights belong to the provinces
under s. 92.
2. Most provincial authority over ordinary commercial contracts, such
as the sale of goods, is derived from which head of power?
A. Trade and commerce
B. Property and civil rights in the province
C. Banking and incorporation of banks
D. Peace, order and good government
ANSWER : B. Property and civil rights in the province
Section 92(13) gives provinces jurisdiction over property and civil rights,
which supports sale of goods, consumer protection and most contract
legislation.
Page 1 of 68
, Commercial Law (Canada) — Comprehensive Final
3. The doctrine of stare decisis requires that:
A. Only the Supreme Court of Canada may create legal rules
B. Statutes always prevail over the Constitution
C. A lower court follow the decisions of higher courts in the same
jurisdiction
D. Judges decide each case on its unique facts without reference to
precedent
ANSWER : C. A lower court follow the decisions of higher courts in the
same jurisdiction
Stare decisis binds lower courts to precedents set by higher courts within
the same judicial hierarchy, creating predictability in commercial dealings.
4. Which Canadian province uses a civil law system for private law
matters?
A. Quebec
B. Manitoba
C. New Brunswick
D. Ontario
ANSWER : A. Quebec
Quebec governs private law through the Civil Code of Québec, while all other
provinces and territories follow the common law tradition.
5. When a valid federal statute and a valid provincial statute conflict so
that both cannot be obeyed, which doctrine applies?
A. Stare decisis, so the earlier law prevails
B. Severance, so the provincial law prevails
C. Paramountcy, so the federal law prevails
D. Interjurisdictional immunity, so both laws are struck down
ANSWER : C. Paramountcy, so the federal law prevails
Under the paramountcy doctrine, the federal statute prevails to the extent of
an operational conflict or frustration of federal purpose.
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, Commercial Law (Canada) — Comprehensive Final
6. Section 1 of the Canadian Charter of Rights and Freedoms permits:
A. Corporations to claim every right guaranteed to individuals
B. Courts to ignore legislation they consider unwise
C. Reasonable limits on rights that can be demonstrably justified in a free
and democratic society
D. Governments to override any Charter right indefinitely
ANSWER : C. Reasonable limits on rights that can be demonstrably
justified in a free and democratic society
Section 1 allows government to justify limits on Charter rights if they are
prescribed by law and proportionate, as assessed using the Oakes test.
7. Regulations made by a government agency under authority granted
by a statute are best described as:
A. Common law
B. Subordinate (delegated) legislation
C. Constitutional conventions
D. Equitable remedies
ANSWER : B. Subordinate (delegated) legislation
Regulations are made by bodies exercising power delegated by the
legislature and must stay within the limits of the enabling statute.
8. Equity developed historically primarily to:
A. Establish the division of federal and provincial powers
B. Provide fairer remedies where the rigid common law was inadequate
C. Replace statutes passed by Parliament
D. Govern criminal prosecutions
ANSWER : B. Provide fairer remedies where the rigid common law was
inadequate
The Court of Chancery developed equitable doctrines and remedies such as
specific performance and injunctions to soften harsh common law results.
Page 3 of 68
, Commercial Law (Canada) — Comprehensive Final
9. A business wishes to challenge a decision of a provincial licensing
board on the ground that the board acted beyond its statutory powers.
This is an application for:
A. Specific performance
B. Judicial review
C. An oppression remedy
D. Rectification
ANSWER : B. Judicial review
Judicial review allows superior courts to examine whether administrative
bodies acted within their jurisdiction and followed procedural fairness.
10. Which statement best describes the burden of proof in a civil
commercial lawsuit?
A. The plaintiff must prove the claim beyond a reasonable doubt
B. The plaintiff must prove the claim on a balance of probabilities
C. The burden is always shared equally between the parties
D. The defendant must prove innocence beyond a reasonable doubt
ANSWER : B. The plaintiff must prove the claim on a balance of
probabilities
Civil cases are decided on a balance of probabilities, meaning the claim must
be more likely true than not.
SECTION B: FORMATION OF CONTRACTS
11. Goods displayed on a store shelf with price tags generally
constitute:
A. An invitation to treat
B. A binding offer
C. A unilateral contract
D. An acceptance
ANSWER : A. An invitation to treat
Following Pharmaceutical Society v. Boots, a display of goods invites
customers to make offers, which the seller may accept at the till.
Page 4 of 68
LGST 369 – COMMERCIAL LAW EXAM QUESTIONS AND
CORRECT ANSWERS | latest 2026/2027
LGST 369 Commercial Law
COMMERCIAL LAW (CANADA)
1. Under the Constitution Act, 1867, which of the following matters falls
within exclusive federal jurisdiction?
A. Provincial consumer protection legislation
B. Regulation of local real estate brokers
C. Bills of exchange and promissory notes
D. Property and civil rights in the province
ANSWER : C. Bills of exchange and promissory notes
Section 91 assigns banking, bills of exchange, promissory notes, interest and
bankruptcy to Parliament; property and civil rights belong to the provinces
under s. 92.
2. Most provincial authority over ordinary commercial contracts, such
as the sale of goods, is derived from which head of power?
A. Trade and commerce
B. Property and civil rights in the province
C. Banking and incorporation of banks
D. Peace, order and good government
ANSWER : B. Property and civil rights in the province
Section 92(13) gives provinces jurisdiction over property and civil rights,
which supports sale of goods, consumer protection and most contract
legislation.
Page 1 of 68
, Commercial Law (Canada) — Comprehensive Final
3. The doctrine of stare decisis requires that:
A. Only the Supreme Court of Canada may create legal rules
B. Statutes always prevail over the Constitution
C. A lower court follow the decisions of higher courts in the same
jurisdiction
D. Judges decide each case on its unique facts without reference to
precedent
ANSWER : C. A lower court follow the decisions of higher courts in the
same jurisdiction
Stare decisis binds lower courts to precedents set by higher courts within
the same judicial hierarchy, creating predictability in commercial dealings.
4. Which Canadian province uses a civil law system for private law
matters?
A. Quebec
B. Manitoba
C. New Brunswick
D. Ontario
ANSWER : A. Quebec
Quebec governs private law through the Civil Code of Québec, while all other
provinces and territories follow the common law tradition.
5. When a valid federal statute and a valid provincial statute conflict so
that both cannot be obeyed, which doctrine applies?
A. Stare decisis, so the earlier law prevails
B. Severance, so the provincial law prevails
C. Paramountcy, so the federal law prevails
D. Interjurisdictional immunity, so both laws are struck down
ANSWER : C. Paramountcy, so the federal law prevails
Under the paramountcy doctrine, the federal statute prevails to the extent of
an operational conflict or frustration of federal purpose.
Page 2 of 68
, Commercial Law (Canada) — Comprehensive Final
6. Section 1 of the Canadian Charter of Rights and Freedoms permits:
A. Corporations to claim every right guaranteed to individuals
B. Courts to ignore legislation they consider unwise
C. Reasonable limits on rights that can be demonstrably justified in a free
and democratic society
D. Governments to override any Charter right indefinitely
ANSWER : C. Reasonable limits on rights that can be demonstrably
justified in a free and democratic society
Section 1 allows government to justify limits on Charter rights if they are
prescribed by law and proportionate, as assessed using the Oakes test.
7. Regulations made by a government agency under authority granted
by a statute are best described as:
A. Common law
B. Subordinate (delegated) legislation
C. Constitutional conventions
D. Equitable remedies
ANSWER : B. Subordinate (delegated) legislation
Regulations are made by bodies exercising power delegated by the
legislature and must stay within the limits of the enabling statute.
8. Equity developed historically primarily to:
A. Establish the division of federal and provincial powers
B. Provide fairer remedies where the rigid common law was inadequate
C. Replace statutes passed by Parliament
D. Govern criminal prosecutions
ANSWER : B. Provide fairer remedies where the rigid common law was
inadequate
The Court of Chancery developed equitable doctrines and remedies such as
specific performance and injunctions to soften harsh common law results.
Page 3 of 68
, Commercial Law (Canada) — Comprehensive Final
9. A business wishes to challenge a decision of a provincial licensing
board on the ground that the board acted beyond its statutory powers.
This is an application for:
A. Specific performance
B. Judicial review
C. An oppression remedy
D. Rectification
ANSWER : B. Judicial review
Judicial review allows superior courts to examine whether administrative
bodies acted within their jurisdiction and followed procedural fairness.
10. Which statement best describes the burden of proof in a civil
commercial lawsuit?
A. The plaintiff must prove the claim beyond a reasonable doubt
B. The plaintiff must prove the claim on a balance of probabilities
C. The burden is always shared equally between the parties
D. The defendant must prove innocence beyond a reasonable doubt
ANSWER : B. The plaintiff must prove the claim on a balance of
probabilities
Civil cases are decided on a balance of probabilities, meaning the claim must
be more likely true than not.
SECTION B: FORMATION OF CONTRACTS
11. Goods displayed on a store shelf with price tags generally
constitute:
A. An invitation to treat
B. A binding offer
C. A unilateral contract
D. An acceptance
ANSWER : A. An invitation to treat
Following Pharmaceutical Society v. Boots, a display of goods invites
customers to make offers, which the seller may accept at the till.
Page 4 of 68
