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Final Exam

Yunxiang Wang

Yorkville University

BUSI 2023 - Business Law

Ammar Jamil

September 24, 2023

Final Exam
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1. Disagree. Business ownership in the form of a limited liability company does not exist in

Canada. There are four general forms of business ownership in Canada: sole proprietorship,

partnership, corporation, and cooperative.

Ward, S. (2021). What does LLC mean and can you set up an LLC in Canada? LiveAbout.

https://www.liveabout.com/can-you-set-up-a-limited-liability-company-llc-in-canada-

2948227

2. If a limited partner participates in the "management" or operation of the business, the

limited partner assumes the responsibilities of a general partner and loses limited liability.

This means that the general partner has greater responsibilities, rights and powers than the

limited partners.

This case discusses the possibility of a limited partner becoming a general partner in the

context of a limited partnership structure. In this case, the appellant and other Canadians

sought to become partners in a limited partnership known as Commons by acquiring an

interest in, and possibly converting from, a limited partner to a general partner. Backman v.

Canada (C.A.), 1999 CanLII 9371 (FCA), [2000] 1 FC 555

UpCounsel. (n.d.). General partner VS. limited partner. https://www.upcounsel.com/general-

partner-vs-limited-partner

3. In a limited partnership, there is a general partner and one or more limited partners,

whereas a limited liability partnership consists only of limited partners. The exclusive

presence of limited partners in an LLP ensures that they bear no personal liability for the
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actions or issues involving the other partners.

Nolo. (2015). Limited Partnerships and limited liability partnerships.

https://www.nolo.com/legal-encyclopedia/limited-partnerships-limited-liability-

partnerships-29748.html

Directors' and officers' duties: A new guide from Stikeman Elliott. https://stikeman.com/en-

ca/kh/canadian-ma-law/directors-duties-in-canada-six-key-concepts

4. Directors must do their jobs in accordance with the law. Directors are not permitted to

make decisions on the basis of their own personal preferences or interests. They must act in

the best interests of the company when making decisions. The company has invested money

and trust in directors, so they must consider the interests of the company as well as their own.

Directors should put the long-term interests of the Company ahead of short-term profits or

immediate operational needs. They must act with honesty and good faith in their dealings

with the Company. This includes respecting the trust of employees in the effective

management of the Company's assets to achieve common goals, avoiding conflicts with the

interests of the Company, not abusing their position for personal gain, keeping confidential

information obtained through their position, and in their service to the Company, acting with

unselfish honesty and fairness.

Barone, A. (2023). What Is a Fiduciary Duty? Examples and Types Explained.

https://www.investopedia.com/ask/answers/042915/what-are-some-examples-

fiduciary-duty.asp
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5. For the court, it can be judged on the basis of the relationship with the payer. If there is an

employer-employee relationship between the payer and the payee, then the payee is the

employee. This is because an employee enters into an employment contract with the

employer, while an independent contractor enters into a service contract that defines the

responsibilities and compensation of both parties. In addition, it can be determined by the

ownership of the tools. If the worker owns his or her own tools, he or she is an independent

contractor. An employee's tools or equipment are usually provided by the payer. Third, an

employee works for only one employer, while an independent contractor may work for

multiple clients and companies. Fourth, independent contractors have more power than

employees. Independent contractors can control when and how the work is done, while

employees are subject to the payer's schedule. Independent contractors may not have to do

the work themselves. Employees must complete the payer's work themselves, whereas

independent contractors can hire other workers to complete the work.

Canada, E. and S. D. (2023a, March 24). Government of Canada. Canada.ca.

https://www.canada.ca/en/employment-social-development/programs/laws-

regulations/labour/interpretations-policies/employer-employee.html#h3.4

The difference between employees and independent contractors. BDC.ca. (2023, July 21).

https://www.bdc.ca/en/articles-tools/employees/recruit/are-your-workers-employees-

or-independent-contractors

6. The primary form of debt security in Canada is the mortgage. The borrower pledges assets

or property attached to the debt as collateral to secure the debt. This is the easier type of
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credit to obtain a secured loan. Most common people choose this type of secured debt type.

The borrower has to put up the property, land or vehicle as security. If the borrower is unable

to make the mortgage payments or repay the loan, the creditor can sell or repossess the

secured asset. This will also result in the borrower's credit score being lowered which will

affect the next loan.

Rennie, L. (2023, March 20). Understanding secured and unsecured debt. Loans Canada.

https://loanscanada.ca/debt/understanding-secured-and-unsecured-debt/

Secured vs unsecured debt - free legal information: Legal line. FREE Legal Information |

Legal Line. (2021, April 6). https://www.legalline.ca/legal-answers/secured-vs-

unsecured-debt/

7. I disagree with the notion that bankruptcy and insolvency are synonymous. While they

share a connection in legal contexts, they are not entirely interchangeable. Bankruptcy

pertains to the legal process and status that arises when an individual cannot repay their debts,

whereas insolvency refers to a financial situation where someone cannot meet their debt

obligations due to insufficient funds or assets.

In Canada, the BIA (Bankruptcy and Insolvency Act) is a federal law designed to safeguard

the rights and interests of both debtors and creditors. It establishes a well-defined legal

framework to ensure equitable treatment of creditors and debtors and the proper distribution

of assets in insolvency proceedings. Additionally, under specific conditions, the BIA can

assist financially troubled businesses in debt resolution. Furthermore, the BIA provides
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creditors with a clear legal structure to prioritize their claims.

Discover the difference between bankruptcy and insolvency. MNPDebt.ca. (n.d.).

https://mnpdebt.ca/en/resources/mnp-debt-blog/discover-the-difference-between-

bankruptcy-and-insolvency

Branch, L. S. (2023, September 15). Consolidated federal laws of canada, bankruptcy and

insolvency act. Bankruptcy and Insolvency Act.

https://laws-lois.justice.gc.ca/eng/acts/b-3/page-1.html#h-24360

8. In this case, the plaintiffs purchased early models of Whirlpool washing machines and

discovered that the machines were prone to bacterial growth and unpleasant odors. Plaintiffs

filed a class action lawsuit against Whirlpool, arguing that the washers were defective.

Express Warranty: The plaintiffs argued that a manufacturer's promise to consumers to

guarantee the quality and performance of a product is an express warranty. However, the

court found that the plaintiffs did not have sufficient evidence to prove that Whirlpool had

made express warranties and dismissed the express warranty damages claim. Moreover,

Whirlpool's warranty period was one year from the date of purchase, and the plaintiff claimed

a design defect more than a year later. In addition, the court found that the plaintiff had not

suffered physical or property damage as a result of the washing machine, resulting in an

economic loss for which he could not recover.

Implied warranty: The court also rejected a claim for implied warranty damages. The plaintiff
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claimed that the washing machine had an implied warranty of quality. However, the court

found that the plaintiff did not sufficiently prove that the defendant made an implied warranty

on the design of the product. Moreover, there was no contractual relationship between the

plaintiff and the defendant, and the plaintiff had no grounds for a claim against the defendant.

Styler, D. (2013, November 12). Arora v Whirlpool Canada LP: Negligence and policy

considerations in the context of a defective, non-dangerous consumer product.

TheCourt.ca. https://www.thecourt.ca/arora-v-whirlpool-canada-lp-negligence-and-

policy-considerations-in-the-context-of-a-defective-non-dangerous-consumer-product/

9. The claim that "Common law does not protect confidential information and trade secrets in

Canada." is inaccurate, as evidenced by a legal case. The case illustrates that Canadian laws

do indeed provide safeguards for confidential information and trade secrets, particularly

within the realms of commerce and mining. In this specific legal instance, Lac Minerals

violated its obligation of confidentiality towards Corona by utilizing confidential geological

findings and data to secure the Williams Property for its own benefit. The Supreme Court of

Canada ruled that Lac Minerals' improper use of the confidential data supplied by Corona

constituted a breach of confidentiality. The court emphasized that using confidential data for

unauthorized purposes implies a duty to refrain from using the information for any purpose

other than the one it was originally intended for. The breach of confidence is a fundamental

principle in common law. In the situation where Corona divulged geological information to

Lac, a breach of trust occurred, and Lac violated the contractual principle by breaking the
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terms outlined in the contract.

Trade Secret Protection and Remedies in Canada. Dentons. (n.d.).

https://www.dentons.com/en/insights/articles/2022/february/25/trade-secret-protection-

and-remedies-in-canada

Confidential Information & Trade Secrets in Canadian law. MaRS Startup Toolkit.

(2021, October 1). https://learn.marsdd.com/article/confidential-information-and-trade-

secrets/

10. I disagree with the assertion. It's not entirely accurate. Canada does permit patents for

inventions involving computer software, but the scope isn't limited to the "computer

program" itself. The emphasis of patent protection lies in determining if the software-related

invention surpasses a basic "computer program" and presents an inventive technical

resolution to a real-world issue. If it involves inventive and non-obvious computer

implementations or systems, they may qualify for patent protection.

Amazon put forth a technique for online purchases that involves storing user profile details

and appropriate user identification data on the respective computers—user's computer and

server's computer—enabling the server to access the user's profile details in subsequent visits,

removing the necessity for the user to input the profile information again. This represents a

computer-driven method.

Initially, Amazon's patent application faced rejection, but they promptly appealed and

emerged victorious. The court upheld prior legal precedent indicating that the utilization of a

computer doesn't impact the potential patentability of an invention. The crucial aspect is
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interpreting the patent claim considering the specific method of construction and evaluating

the subject matter in its entirety. The court even asserted that business methods might

constitute a significant aspect of a valid patent claim.

Zhang, S. (2013, September 16). Software patents and patenting computer related inventions

in Canada - patent - canada. Software Patents And Patenting Computer Related Inventions In

Canada - Patent - Canada. https://www.mondaq.com/canada/patent/262992/software-patents-

and-patenting-computer-lated-inventions-in-canada

Office, C. I. P. (2021, June 28). Government of Canada. Government of Canada, Innovation,

Science and Economic Development Canada, Office of the Deputy Minister,

Canadian Intellectual Property Office. https://ised-isde.canada.ca/site/canadian-

intellectual-property-office/en/patents/what-patent

Patent FAQ (Ca/US/PCT). Heer Law. (n.d.). https://www.heerlaw.com/patent-faq

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