SCM850 Final Exam – Winter 2020

QUESTION 1
a) List and clearly explain the essential elements to create a legal binding and enforceable contract
in common law. How might such a contract be found to be defective and unenforceable? Explain.
5 Marks
ANS:
It requires seven essential elements
1.Intention to create a legal relationship
2.An Offer 
3.Unconditional Acceptance 
4.Common-Law requirement of Consideration
5. The parties must have the capacity to make contracts
6. The requirements of Form and Writing must be satisfied
7. Contracts must be for Legal purpose 

A contract be found invalid or unenforceable if it is

1. Undue influence
2. Duress
3. Mistake
4. Misinterpretation
5. Unconscionability

b) List and clearly explain the essentials elements to be successful in a tort lawsuit. 3 Marks

The essential elements are

1. The defendant owed the plaintiff a duty of care.

2. The defendant breached or failed in their duty of care
3. The defendant conduct caused the injury

c) When it comes to manufactured products, who are the parties who could potentially be sued and
be found to liable in a product liability lawsuit? 2 Marks

Manufacturer and distributors are the parties could be potentially sued.

QUESTION 2

a) What is the global uniform law of sales in international sale of goods transaction? When does it
apply to a contract? Explain. 3 Marks

• Response- CISG (Convention for the International Sale of Goods) negotiated in 1980 became
effective in 1988
• Tries to appreciate country differences in approach to contract law
• CISG is a compromise: tries to keep parties in bargain (compare with perfect tender)
It applies to the contract,
 • This convention applies to transactions where both parties are citizens of signature countries …
over 90 countries
• Limitations: does not apply to certain types of contracts( consumer for personal use, ships,
securities, and other: fills in contract gaps, does not supercede them, can exclude CISG with a
contract clause so doing.
• CISG does not concern itself with general matters of validity or contracts.

b) In international business involving the sale of goods, which contracts are referred to as the
ancillary contracts? Explain. 3 Marks

ANCILLARY CONTRACTS
• A contract that is additional or supportive of another, main contract is called an ancillary
contract. Usually for
1. Transportation
2. Insurance
3. Financing
• They are separate contracts between one of the parties to the main contract and a third party.
• Because of the privity of contract rule, no rights under the ancillary contract can be enforced by
someone not a party to the contract.
Thus, the obligation to make these contracts, and their terms, should be inserted into the main
contract

c) What role does the “bill of lading” play in each of these ancillary contracts? 4 Marks

“Bill of lading” is a multiple purpose document; it acts as contract of carriage of goods by sea, as
formal receipt for the goods shipped and as a document of title.

 A receipt issued by the carrier that the goods have been loaded on the conveyance.
 A title of goods to the consignee noted on the Bill of Lading.

 Because it is considered a title of goods, the Bill of Lading can be used as a negotiable instrument
and can be traded much in the same way goods may be.

QUESTION 3

a) What is intellectual property? What are the various types of intellectual property rights? List and
briefly describe and explain each one. 7 Marks

• Intellectual property (IP) is property created by human intellect or creativity that has
commercial application. IP includes intangible subject matter such as ideas, imagery,
relationships. IP rights are based on the owner’s legal right to exclude others from using their

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 subject matter. The rights can usually be transferred or assigned, and use of the rights can be
commercialized.
• Creations of the mind, inventions, literary and artistic works, symbols, images, and designs used
in commerce

Various types of Intellectual property rights

1. Patents
2. Trademarks
3. Copyrights
4. Industrial Designs
5. Geographical Designs
6. Trade Secrets
7. Personality Rights

Patent
• Patents protect function. An issued patent provides the owner with certain rights to exclude others
from commercially exploiting his or her invention.
Trademarks
 Trademarks protect elements used to distinguish the products and services of one person or
corporation in the marketplace from another
Copyrights
• Copyright is the exclusive right of a creator of a literary, dramatic, musical, or artistic work to
publish, perform, distribute, or use the work and to authorize others to do the same.
Industrial designs
• Industrial design law protects an enormous range of designs applied to mass-produced, finished,
manufactured products.
Geographical designs
• Geographical indications are marks used on a product that identify it as originating in a
geographical region where its quality or reputation is linked to that region.
Trade secrets
• The most common form of protection used by business is maintenance of information as a trade
secret or confidential information.
Personality Rights
• Personality rights protect the person’s including the names, nicknames, images, and voices of
prominent individuals such as entertainers and sport figures.
• Celebrity rights can be classified under three major headings: personality rights, publicity rights
and privacy rights.

b) What remedies might the court offer to a plaintiff when there is infringement on their intellectual
property rights? Identify and discuss. 3 Marks

Remedies to infringement on IP Rights

• Interlocutory or Permanent Injunctions
• Damages – compensation for the damages
• Accounting Profits – payout of profits to be received
• Seizure and destruction – deliver or dispose of product bearing the trademark

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QUESTION 4

a) When it comes to settling international business disputes, in addition to the specific matters in
dispute, what three potential issues must also be addressed by the parties? 3 Marks

Three potential issues addressed by the parties

1. LAW- Which country’s laws will apply to the dispute?
2. FORUM- Which country’s courts will hear the case, or will differences be arbitrated?
3. ENFORCEMENT- Will the courts of one country recognize and enforce a judgment or award
obtained in another country?

b) When it comes to setting international business disputes, what are the two basic approaches? List
and fully describe each one. 4 Marks

When it comes to setting international business disputes, the two basic approaches are
Litigation and Alternative Dispute Resolution.

• Alternative dispute resolution (ADR) is an umbrella term for methods of resolving disputes
other than litigation.
• The main types are negotiation, conciliation or mediation, arbitration

Negotiation – two parties trying to resolve an issue between themselves

Mediation or Conciliation – involves a facilitator to try to help the parties resolve an issue, but not
resolving it for them
Arbitration (binding or non-binding) – third party decides the case after hearing both sides

c) Explain why one of these approaches has emerged as the favoured form for settling international
trade disputes. 3 Marks

Litigation
• First Conflict: Choice of Law, domestic or foreign?
• Parties are free to specify the law of their choice in the contract, provided that the
selection is in good faith.
• If foreign, plaintiff needs to show Proof of Foreign Law
• In most common law jurisdictions, including Canada, any choice-of-law clause
specifying a foreign law must be raised in the case’s pleadings (at the beginning).

QUESTION 5

a) Canadian companies may employ a variety of strategies to enter foreign markets or to enhance
their presence in a foreign market. Identify and briefly describe four forms that such access may
take. 4 Marks

Four Forms
1. Agency - To increase presence in a foreign market is to appoint an agent in that market.

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 2. Outsourcing - The delegation of specific operations from the internal operation of a
business to an external entity.
3. Foreign Direct investment - The establishment of a direct presence of a firm in a foreign
country
4. Licensing and franchising - obtaining the right to use something that belongs to someone
else.

b) In each of the four forms in part a) describe the corresponding legal aspects the Canadian
company ought to be aware of, and whether it involves contract law, legislation, or treaties. 6
Marks

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