Test Bank for Managing the Law The Legal Aspects of Doing
Business, 6e (Canadian Edition) Mitchell McInnes, Ian Kerr,
Anthony VanDuzer, Malcolm Lavoie (All Chapters)
,Chapter 01: Risk Management and Sources of Law
True/False Questions
1. The law can affect a business both positively and negatively. It often prohibits actions that otherwise
would be possible. However, it sometimes permits parties to do something that they could not otherwise
do.
a True
b False
Difficulty: 2
QuestionID: 01-1-01
Topic: Why Study Law?
Skill: Recall
Answer: a. True
2. Beta Inc has recently discovered that a defect in one of its products poses a risk of injury to consumers.
Its only option, from a legal risk management perspective, is to eliminate the risk of liability by removing
the product from the market.
a True
b False
Difficulty: 2
QuestionID: 01-1-02
Topic: Risk Management
Skill: Applied
Answer: b. False
3. As described in the text, the four forms of risk management are risk avoidance, risk elimination, risk
transfer, and risk acceptance.
a True
b False
Difficulty: 1
QuestionID: 01-1-03
Topic: Risk Management
Skill: Recall
,Answer: b. False
4. Sabeka Inc has discovered that one of its products may cause consumers to suffer a certain form of
property damage. In response to that risk, the company has written an exclusion clause into its sales
contracts. In doing so, it has adopted a form of risk management known as risk shifting.
a True
b False
Difficulty: 2
QuestionID: 01-1-04
Topic: Risk Management
Skill: Applied
Answer: a. True
5. Jahume Ltd operates as an Internet service provider. It has retained Alison to work as in-house
counsel. Following an increasingly common trend, this means that she will work for the company from
her own home, rather than from a traditional law firm office.
a True
b False
Difficulty: 2
QuestionID: 01-1-05
Topic: Risk Management
Skill: Applied
Answer: b. False
6. Quebec is said to be a "civil law system" because it is derived from the legal system that governed the
citizens of ancient Greece.
a True
b False
Difficulty: 3
QuestionID: 01-1-06
Topic: Map of the Law
Skill: Recall
Answer: b. False
7. "Administrative law" derives its name from the fact that it is concerned with the administration of the
trial courts and appellate courts.
a True
b False
Difficulty: 1
, QuestionID: 01-1-07
Topic: Map of the Law
Skill: Recall
Answer: b. False
8. Bianca punched Mick. She now finds herself in court. The person who has brought the claim for
damages against her is Mick himself. It is safe to assume that the court is concerned with a private law
issue, rather than a criminal law issue.
a True
b False
Difficulty: 1
QuestionID: 01-1-08
Topic: Map of the Law
Skill: Applied
Answer: a. True
9. Glimmer Co recently received a tax assessment with which it disagrees. It does not believe that it
should be required to pay the full amount of the demand. If it challenges the assessment, the case will fall
into the category of "public law" even though the company is a private corporation.
a True
b False
Difficulty: 3
QuestionID: 01-1-09
Topic: Map of the Law
Skill: Applied
Answer: a. True
10. Bastarache & Michel is a law firm in your province. Although it occasionally has clients from other
jurisdictions, the vast majority of its work comes from within your province. Your legislature recently
enacted a statute that imposes a 5% tax on the "sale of professional services, including … legal services."
As that wording suggests, the statute treats Bastarache & Michel as the taxpayer, even if the firm adds
the cost of the tax onto the fees that it charges to its clients. The new tax is probably intra vires and valid
because most professionals provide services in only one province.
a True
b False
Difficulty: 3
QuestionID: 01-1-10
Topic: Map of the Law
Skill: Applied
Business, 6e (Canadian Edition) Mitchell McInnes, Ian Kerr,
Anthony VanDuzer, Malcolm Lavoie (All Chapters)
,Chapter 01: Risk Management and Sources of Law
True/False Questions
1. The law can affect a business both positively and negatively. It often prohibits actions that otherwise
would be possible. However, it sometimes permits parties to do something that they could not otherwise
do.
a True
b False
Difficulty: 2
QuestionID: 01-1-01
Topic: Why Study Law?
Skill: Recall
Answer: a. True
2. Beta Inc has recently discovered that a defect in one of its products poses a risk of injury to consumers.
Its only option, from a legal risk management perspective, is to eliminate the risk of liability by removing
the product from the market.
a True
b False
Difficulty: 2
QuestionID: 01-1-02
Topic: Risk Management
Skill: Applied
Answer: b. False
3. As described in the text, the four forms of risk management are risk avoidance, risk elimination, risk
transfer, and risk acceptance.
a True
b False
Difficulty: 1
QuestionID: 01-1-03
Topic: Risk Management
Skill: Recall
,Answer: b. False
4. Sabeka Inc has discovered that one of its products may cause consumers to suffer a certain form of
property damage. In response to that risk, the company has written an exclusion clause into its sales
contracts. In doing so, it has adopted a form of risk management known as risk shifting.
a True
b False
Difficulty: 2
QuestionID: 01-1-04
Topic: Risk Management
Skill: Applied
Answer: a. True
5. Jahume Ltd operates as an Internet service provider. It has retained Alison to work as in-house
counsel. Following an increasingly common trend, this means that she will work for the company from
her own home, rather than from a traditional law firm office.
a True
b False
Difficulty: 2
QuestionID: 01-1-05
Topic: Risk Management
Skill: Applied
Answer: b. False
6. Quebec is said to be a "civil law system" because it is derived from the legal system that governed the
citizens of ancient Greece.
a True
b False
Difficulty: 3
QuestionID: 01-1-06
Topic: Map of the Law
Skill: Recall
Answer: b. False
7. "Administrative law" derives its name from the fact that it is concerned with the administration of the
trial courts and appellate courts.
a True
b False
Difficulty: 1
, QuestionID: 01-1-07
Topic: Map of the Law
Skill: Recall
Answer: b. False
8. Bianca punched Mick. She now finds herself in court. The person who has brought the claim for
damages against her is Mick himself. It is safe to assume that the court is concerned with a private law
issue, rather than a criminal law issue.
a True
b False
Difficulty: 1
QuestionID: 01-1-08
Topic: Map of the Law
Skill: Applied
Answer: a. True
9. Glimmer Co recently received a tax assessment with which it disagrees. It does not believe that it
should be required to pay the full amount of the demand. If it challenges the assessment, the case will fall
into the category of "public law" even though the company is a private corporation.
a True
b False
Difficulty: 3
QuestionID: 01-1-09
Topic: Map of the Law
Skill: Applied
Answer: a. True
10. Bastarache & Michel is a law firm in your province. Although it occasionally has clients from other
jurisdictions, the vast majority of its work comes from within your province. Your legislature recently
enacted a statute that imposes a 5% tax on the "sale of professional services, including … legal services."
As that wording suggests, the statute treats Bastarache & Michel as the taxpayer, even if the firm adds
the cost of the tax onto the fees that it charges to its clients. The new tax is probably intra vires and valid
because most professionals provide services in only one province.
a True
b False
Difficulty: 3
QuestionID: 01-1-10
Topic: Map of the Law
Skill: Applied
