Jurisdiction and Fundamentals Question Pack - Questions and Answers

1. What is a major disadvantage of carrying on a business as a sole proprietorship?

  1. It requires complex incorporation documents.
  2. The business must have multiple employees.
  3. There is no limited liability for the owner.
  4. It cannot operate outside Ontario.

Correct Answer: C

Explanation: A sole proprietor is personally liable for business debts and obligations—unlike corporations or partnerships that may offer protection.

2. What is the significance of a mortgage being referred to as a “charge” in Ontario’s land titles system?

  1. The borrower loses legal title immediately.
  2. The lender gains ownership of the land.
  3. It’s considered an encumbrance, not a transfer of title.
  4. It allows tenants to claim title after 10 years.

Correct Answer: C

Explanation: A “charge” under the Land Titles Act creates a security interest in land but does not transfer ownership to the lender.

3. Which of the following best describes the purpose of the "peace, order, and good government" (POGG) power?

  1. To allow Parliament to legislate in areas not specifically assigned to the provinces.
  2. To grant exclusive criminal jurisdiction to provinces.
  3. To limit federal authority to emergency powers only.
  4. To delegate provincial powers to municipalities.

Correct Answer: A

Explanation: POGG is a residual federal power used when matters are not otherwise assigned to either level of government.

4. What is the role of a limited partner in a limited partnership under Ontario law?

  1. To hold lien rights on partnership property in lieu of equity.
  2. To act primarily as a passive investor with limited liability.
  3. To avoid liability while performing active services.
  4. To have full managerial control and bind the partnership.

Correct Answer: B

Explanation: Limited partners may contribute financially but must remain passive to maintain limited liability.

5. What does the "interjurisdictional immunity" doctrine protect?

  1. Provincial powers from federal overreach.
  2. The core of exclusive federal powers from provincial laws that impair them.
  3. Municipalities from provincial intrusion.
  4. Civil rights from interference by any legislature.

Correct Answer: B

Explanation: This doctrine prevents provincial legislation from impairing the essential core of federal jurisdiction—especially in matters like banking or telecommunications.

6. Under the CPA, what happens if a merchant charges a consumer an illegal fee and does not refund it within 15 days of demand?

  1. The consumer forfeits the right to cancel.
  2. The contract is automatically cancelled.
  3. The consumer may sue the merchant to recover the amount.
  4. The merchant must double the refund amount as a penalty.

Correct Answer: C

Explanation: Consumers may commence legal proceedings under s. 98 of the CPA if the merchant fails to comply after being put on notice.

7. Which of the following is a key feature of a general partnership?

  1. Each partner is an agent for the partnership and the other partners.
  2. It is a separate legal entity under the Business Corporations Act.
  3. Incorporation with the federal government is required.
  4. Partners are only liable for acts expressly agreed to in writing.

Correct Answer: A

Explanation: Partners can legally bind each other when acting within the scope of the partnership under the Partnerships Act.

8. What principle ensures that both private individuals and government actors are subject to legal rules in Canada?

  1. Judicial Review.
  2. Responsible Government.
  3. Rule of Law.
  4. Parliamentary Sovereignty.

Correct Answer: C

Explanation: The rule of law holds that all actions—by government or citizens—must conform to established legal frameworks.

9. What is the effect of registering an instrument under the registry system in Ontario?

  1. It nullifies earlier registrations.
  2. It automatically transfers ownership of title.
  3. It serves as public notice of the document’s existence.
  4. It guarantees the validity of the document.

Correct Answer: C

Explanation: Under the registry system, registration gives public notice but does not guarantee legal sufficiency or priority of title.

10. What is a common remedy under section 52 of the Constitution Act, 1982 when a law is found unconstitutional?

  1. Referral to Parliament for amendment.
  2. A declaration that the law is of no force or effect.
  3. Judicial instructions for new legislative wording.
  4. A letter of reprimand issued by the Chief Justice.

Correct Answer: B

Explanation: Courts may declare invalid any law that is inconsistent with the Constitution, rendering it of no force or effect.

11. What kind of action is subject to review under the Canadian Charter of Rights and Freedoms?

  1. Actions by individuals acting in private.
  2. Government action and programs administered on its behalf.
  3. Actions of elected politicians only.
  4. Decisions issued by foreign governments.

Correct Answer: B

Explanation: The Charter applies to government and those carrying out public programs—even if operated by private entities.

12. Which of the following is an example of delegated (secondary) legislation in Canada?

  1. A Ministerial regulation made under enabling statute authority.
  2. A Supreme Court opinion interpreting a statute.
  3. A Senate motion approving a proposed budget.
  4. An Act passed by the federal Parliament.

Correct Answer: A

Explanation: Delegated legislation is created by a person or body under authority granted by a statute—e.g., ministerial regulations or municipal by-laws.

13. Under the Consumer Protection Act, 2002 (CPA), which provision cannot be overridden by contract?

  1. Agreed delivery timelines.
  2. Arbitration clauses that restrict court access.
  3. Conditions about shipping fees.
  4. The ability to return goods after 10 days.

Correct Answer: B

Explanation: The CPA prohibits arbitration clauses that restrict consumers’ right to access the court system.

14. What is the significance of Section 92(13) of the Constitution Act, 1867?

  1. It gives municipalities the right to self-govern.
  2. It grants Parliament power over Indigenous affairs.
  3. It gives provinces exclusive control over property and civil rights.
  4. It permits the federal government to override provincial law.

Correct Answer: C

Explanation: Section 92(13) assigns provincial jurisdiction over civil and property matters, including torts, contracts, and land use.

15. Which of the following is NOT required for a limited liability partnership (LLP) to carry on business in Ontario?

  1. Registration of its firm name under the Business Names Act.
  2. Maintaining minimum levels of liability insurance.
  3. Practicing a profession authorized by statute.
  4. Maintaining a registered office in Ontario.

Correct Answer: D

Explanation: LLPs must register and meet insurance and naming requirements, but the Partnerships Act does not mandate a physical Ontario office

16. What is a major disadvantage of carrying on a business as a sole proprietorship?

  1. It requires complex incorporation documents.
  2. The business must have multiple employees.
  3. There is no limited liability for the owner.
  4. It cannot operate outside Ontario.

Correct Answer: C

Explanation: In a sole proprietorship, the owner is personally responsible for the business’s debts and liabilities, putting personal assets at risk.

17. Which of the following is a key feature of a general partnership?

  1. It is a separate legal entity from its partners.
  2. Partners share liability equally only if agreed in writing.
  3. It requires incorporation with the federal government.
  4. Each partner is an agent of the partnership and the other partners.

Correct Answer: D

Explanation: Under the Partnerships Act, each partner acts as an agent and may bind the firm when acting within their actual or apparent authority.

18. What is the role of a limited partner in a limited partnership under Ontario law?

  1. To hold lien rights on partnership property.
  2. To avoid liability while performing active services.
  3. To have full managerial control of the partnership.
  4. To act primarily as a passive investor with limited liability.

Correct Answer: D

Explanation: Limited partners must refrain from managing the business to maintain their limited liability status; they are essentially financial backers.

19. Which of the following is NOT required for a limited liability partnership (LLP) to carry on business in Ontario?

  1. Practice of a profession authorized by statute.
  2. Maintain minimum levels of liability insurance.
  3. Maintain a registered office within Ontario.
  4. Register the firm’s name under the Business Names Act.

Correct Answer: C

Explanation: LLPs must comply with registration and insurance rules, but there is no requirement for a physical registered office in Ontario.

20. What distinguishes a corporation from a partnership or sole proprietorship in Ontario?

  1. It cannot sue or be sued in its own name.
  2. It provides limited liability and is a separate legal entity.
  3. It operates only through oral contracts and simple partnerships.
  4. It requires no formal filings or government approval to exist.

Correct Answer: B

Explanation: Incorporation creates a separate legal entity distinct from its owners, providing limited liability protection for its shareholders.

21. What type of interest in land grants the most extensive rights to control, use, and transfer land?

  1. Life estate.
  2. Leasehold estate.
  3. Fee simple estate.
  4. Easement.

Correct Answer: C

Explanation: A fee simple estate grants the most complete ownership interest in land, including rights to sell, mortgage, and pass it on after death.

22. What distinguishes joint tenancy from tenancy in common?

  1. Joint tenants cannot leave their interest to heirs.
  2. Joint tenancy is always used for business partnerships.
  3. Tenants in common must share equal ownership.
  4. Tenants in common lose their interest upon death.

Correct Answer: A

Explanation: Joint tenancy includes the right of survivorship; when one joint tenant dies, their interest automatically passes to the remaining joint tenant(s).

23. Which of the following is considered a non-exclusive interest in land?

  1. Fee simple.
  2. Leasehold estate.
  3. Easement.
  4. Life estate.

Correct Answer: C

Explanation: An easement allows one party limited use of another’s land, such as access, but not exclusive possession or ownership.

24. What is the effect of registering an instrument under the registry system in Ontario?

  1. It guarantees title and extinguishes all prior claims.
  2. It serves as public notice of the instrument’s existence.
  3. It automatically transfers ownership rights.
  4. It nullifies competing registrations by default.

Correct Answer: B

Explanation: The registry system doesn’t guarantee title but provides notice to third parties that the document exists and affects the land.

25. What is the significance of a mortgage being referred to as a “charge” in Ontario’s land titles system?

  1. It allows tenants to claim ownership after 10 years.
  2. It’s treated as an encumbrance, not a transfer of title.
  3. It grants the lender automatic title to the property.
  4. The borrower loses equitable ownership upon registration.

Correct Answer: B

Explanation: A mortgage is a charge, meaning the lender has a security interest in the land but the borrower retains title and ownership.

26. Under the Consumer Protection Act, 2002 (CPA), which of the following provisions CANNOT be waived or overridden by a contract?

  1. Delivery times agreed to verbally.
  2. Arbitration clauses that block court access.
  3. Terms relating to optional product add-ons.
  4. Discretionary refund periods set by the retailer.

Correct Answer: B

Explanation: Section 7 of the CPA prohibits mandatory arbitration clauses from denying a consumer’s right to bring an action in the Superior Court of Justice.

27. What is the minimum cooling-off period provided under the CPA for certain agreements like direct sales or time shares?

  1. 3 days.
  2. 10 days.
  3. 7 days.
  4. 14 days.

Correct Answer: B

Explanation: Consumers have 10 days to cancel designated agreements without reason under various provisions of the CPA (e.g., s. 28, 35, 43).

28. What is the effect of a consumer cancelling an agreement under the CPA?

  1. The contract remains valid until a refund is processed.
  2. The consumer must pay a standardized cancellation penalty.
  3. The contract and all related agreements are treated as void from the outset.
  4. The consumer is barred from re-entering similar agreements for 90 days.

Correct Answer: C

Explanation: Cancellation under the CPA treats the agreement and any related agreements as if they never existed (s. 95), restoring the consumer to their prior position.

 

Case 1

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Questions 29 to 30 refer to Case 1

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