Exam in Business Law

BUSINESS LAW 302

NAME:




Final Exam, April, 2021


Please answer all questions on the Question Sheet.


10 Marks
1 Steve intends to purchase a newly constructed house in Stratford for $400,000.00. He is not using a realtor but has come to you as his lawyer to ask about the steps involved in the purchase? He is approved for a mortgage in the amount of $300,000.00. He is wondering about your role as a lawyer. He has asked whether you would draft the purchase agreement. He has asked if a title search necessary and if so, what constitutes a good chain of title. Please explain the role of the lawyer in this transaction, indicate whether HST is applicable and what documents would be prepared by you as a lawyer to accomplish this purchase. Also, please answer Steve’s questions regarding the title search and chain of title.
The role of the lawyer is to ensure all the conditions are met before the client signs the purchase agreement. The lawyer reviews all the necessary documents to eliminate any legal hurdles. They also review any municipal and provincial taxes on the property. The lawyer can also draft the purchase agreement which is a legally binding contract that a buyer and seller sign. Other documents the lawyer would prepare include: mortgage documents, transfer of title deed document, and bill of sale. To complete this real estate transaction, a lawyer must conduct a title search. This is a necessary action since it evaluates public records to ensure there are no claims against the property and confirms legal ownership. It ensures a clean real estate transaction is conducted and a buyer avoids any future unexpected issues. A good chain of title takes a historical view by tracing the ownership of the house including the land from the original owner to the current owner. This will show all the paperwork involved in the transfer of ownership and will guarantee that the seller is the legal owner of the property. In this case HST is applicable because Steve is buying a newly constructed home and this type of tax is charged on new property.
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15 Marks
1 Scott has written a self-help book entitled “How to Survive the Carona Vires in the Year 2021". He has asked you to explain the law relating to copyrights. Do they have to be registered. What is a copyright? Is it a federal or provincial law? How long do they last? He also has a idea for a life coaching, yoga and meditation business called “Peace Out” that he thinks he could franchise. Please explain how Trademarks are used in relation to franchises. What is a Trademark? How long do they last and how are they registered?
Copyright is legal right granted to an individual over their publication. This provision gives original owner of a literary or artistic production the legal authority to prevent anyone from reproducing their work. So, Scott has sole ownership of this self-help book and no one can copy his work without his permission. Copyright is an automatic provision for the author of a work and doesn’t need any registration. It falls under federal jurisdiction and the right covers the lifetime of the author plus an additional 50 years after their death.
Trademarks are necessary to differentiate businesses and will help Scott distinguish his new business from other similar businesses that offer the same services. Trademarks allow a franchisor to grant a license to a franchisee to use their specific business name, operating procedures, brand names and manuals. The trademark gives the franchise the permission to use their products, train staff, inspect their books and ensure they oversee the operations of the business. A trademark lasts for 10 years then it can be renewed. If one wants to register they must apply to the Canadian Intellectual Property office where they indicate details such as the address, tradename, goods and services. After completion, it is entered in the Register of Trademarks.
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4 MARKS
1 Grace took Business Law 302 at U.P.E.I. and felt she was qualified to prepare her own will. She bequeathed all her property to her husband, Leo. She had the will witnessed, first by her husband, Leo, and then an hour later by her friend, Jack.
Explain what, if any, problems there may be with execution of this will?
According to the Probate Act, the signing of the will should be done in the presence of two or more witnesses. In this case, Grace prepared the will without two or more witnesses acknowledging her signature. Jack witnesses the will on his own without the presence of at least another witness. Further, Grace bequeathed her property to the husband. However, in line with the act, the husband is a beneficiary which makes the will void. This means the will face significant legal hurdles during execution since the witnesses can’t subscribe to this will.
4 Marks
1 Susan was separated from her husband Fred but they were still married. Susan and Fred have three children. Susan died suddenly without a will leaving property valued at $150,000.00.
Explain how Susan’s estate would be divided pursuant to the Intestate Succession Rules set out in our Probate Act. How would her estate be divided if she and Fred had been divorced?
If Fred and Susan had been divorced, it means their marriage ceases to exist before her death. This means the husband can’t be a beneficiary because the law doesn’t recognize him as a legal partner to the wife. This means the estate would be divided amongst the next of kin which are Susan’s three surviving children. Each of them would receive a third of the property value.
2 Marks
1 What is the name of the court procedure that would be used to deal with Susan’s Estate, given there is no will?
It would be called a probate court proceeding as the court doesn’t know who the deceased would have chosen as the executor of the will. The court will appoint an administrator of Susan’s estate who will be in charge of distributing the property of the deceased.
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PLEASE DO EACH OF THE NEXT 4 QUESTIONS WORTH 5 MARKS EACH
1 Will and Jack, a gay couple in New York City, moved to P.E.I. where they bought a house and registered it in Will’s name. The lived here for 10 years and both paid the mortgage and for improvements on the house. Assume they split up and they were not married. Please advise Jack of his rights under P.E.I. Statute Law and Canadian Common Law regarding division of assets..
According to the Family Law Act under Canadian Common Law, considers two people who have lived more than three years in a conjugal relationship as spouses. Will and Jack are in a same-sex relationship and Prince Edward Island legally recognizes this union which means they have similar benefits and obligations to a heterosexual marriage. Common law couples are not legally required to divide their property upon separation. However, Will and Jack have shared costs in mortgage and house renovations. P.E.I Statute Law stipulates that if a spouse has contributed in purchase of a property then they have a right to own part of it. This means that Jack will have rights to the house they bought in P.E.I and they will have to share it based on their contributions to the property.
1 You have been asked for advice as to what legal documents are necessary to enable someone to give another, the power to sign financial documents for them and to enable someone to make health care decisions for them.
One is the Power of Attorney which is a legal document which grants another person the power to act in their behalf. One becomes the principal and the person designated to work on their behalf is called an agent. This legal document gives the agent either limited or extensive power to make decisions on behalf of the principal. This depends on the terms and conditions contained in the document which may grant the agent the authority to sign financial documents or to make healthcare decisions for them. In this case two sets of power of attorney are available that is medical power of attorney for healthcare and financial power of attorney for financial-related issues.
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1 Brackley Beach Farms, a large frozen food possessor, discharged waste into Brackley Bay causing a large fish kill and the company was charged under the Environmental Protection Act. Would the directors of the company be subject to charges as well? What possible defence could company or Directors have and explain what is meant by a “Strict Liability” offence?
The PEI Environmental Protection Act has the responsibility of every person protects the environment and prohibits any activity which will harm the environment. In this case Brackley Beach Farms was involved in damaging the environment and so according to the act directors are held liable for any action within their corporation which affects the environment. The directors are responsible for the day to day operations of the farm which means they authorized the discharge of waste into the farm and are guilty of an offence under the act.
“Strict Liability” offence is an actio...