i) Question Type The following are guidelines on the type of questions and their approximate weightings:
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1 Business Law [LW1] Examination Blueprint Purpose The Business Law [LW1] examination has been constructed using an examination blueprint. The blueprint, also referred to as the test specifications, outlines the content areas covered on the examination and the weighting allotted to each content area. This document also lists the topics, the level of competence for each topic, and the related learning objectives. In addition, information is provided on the proportion of each question type presented in the examination (that is, multiple choice, quantitative problems, and so on). Use Students should use the examination blueprint to prepare for the course examination. The blueprint may not include all the topics listed in the course materials; however, students are still responsible for acquiring a broad-based knowledge of all topics not listed in the blueprint since these topics will be tested in assignment and review questions. The topics not listed in the blueprint will also provide students with a greater depth of understanding of law and its importance in accounting transactions. Examination Objectives The objective of this 3-hour, comprehensive examination is to test CGA students to ensure that students have the broad-based knowledge of law needed to function properly in upper-level education and certification courses. Examination Guidelines for Questions i) Question Type The following are guidelines on the type of questions and their approximate weightings: Question Item Percentage Weighting Multiple-choice questions 100% ii) Question Content The following table is organized according to content area and provides information on topics, learning objectives, weighting, and levels of competence. Examination sessions: December 2014; June 2015; September 2015 Page 1 of 11
2 Business Law [LW1] Examination Blueprint Content Area Topics Learning Objectives Weighting 1. The Canadian legal system 5% to 9% 1.1 Nature of law 1.2 Categories of law 1.3 Origins of law 1.4 Sources of law 1.5 The law in Canada 1.6 Human rights law 1.7 The Canadian Charter of Rights and Freedoms 1.8 The system of courts 1.9 Using the courts 1.10 Legal costs 1.11 Alternatives to court action 1.12 Advantages and disadvantages of ADR Explain how morality can have an impact on law. Describe the main categories of law. Distinguish between a civil law system and a common law system. Describe the sources of law. Describe the constitution of Canada and its purpose. Describe Canadian human rights legislation and identify its weaknesses. Describe the Canadian Charter of Rights and Freedoms. Describe the court system in Canada, for both civil and criminal cases. Explain how a case is brought before the courts, and describe the court process. Explain how legal fees are arranged, and describe who must pay them. Describe the three main methods of alternative dispute resolution (ADR). Describe the advantages and disadvantages of ADR. Examination sessions: December 2014; June 2015; September 2015 Page 2 of 11
3 2. Tort law and professional liability 12% to 16% 2.1 Tort law 2.2 The basis for liability in tort 2.3 Intentional torts to a person or property 2.4 Intentional torts unique to business 2.5 Law of negligence 2.6 Award of damages for negligence 2.7 Professional liability 2.8 Professional liability for negligence 2.9 Professional organizations Describe tort law and compare it to criminal law. Describe the basis for liability in tort. Describe intentional torts, including the required elements, various defences, and remedies. Describe various torts unique to business. Describe the tort of negligence, including the criteria required to prove a claim in negligence, and explain the concepts of duty of care, breach of the duty, causation, and remoteness. Describe the factors affecting an award of damages for negligence. Describe the legal duties a professional has that, if breached, could result in liability. Distinguish between general negligence and professional negligence. Describe the objectives and rights of professional organizations. Examination sessions: December 2014; June 2015; September 2015 Page 3 of 11
4 3. Formation of the contractual relationship 1 6% to 10% 3.1 What is a contract? 3.2 Various types of contracts 3.3 Offer 3.4 Termination of an offer 3.5 Acceptance 3.6 Communication of acceptance and the postbox rule 3.7 Consideration 3.8 Invalid forms of consideration 3.9 The use of a seal Describe the concept of freedom of contract, and list the requirements for a valid contract. Describe the various types of contracts. Describe the requirements for a valid offer, and explain the difference between an offer and an invitation to do business. Explain how an offer can end, and how an offer can be kept open for a specified length of time. Describe the requirements for a valid acceptance. Describe when acceptance of a contract occurs, and explain the importance of where acceptance occurs. Define the term consideration, and describe the adequacy of consideration. Describe the main forms of invalid consideration. Describe the relevance of a seal in forming a valid contract. Levels 1, 2, and 3 Examination sessions: December 2014; June 2015; September 2015 Page 4 of 11
5 4. Formation of the contractual relationship 2 4% to 8% 4.1 Capacity to contract Minors and infants 4.2 Capacity to contract Insanity and drunkenness 4.3 Legality of object 4.4 Types of illegal contracts 4.5 Intention to create legal relations 4.6 The requirement of writing or form Describe the rights and obligations of a minor under a contract. Outline the law relating to contracts with those who are temporarily or permanently incapacitated. Describe the requirement of legality, including the consequences of a contract having an illegal object. Describe the three main types of illegal contracts that affect business organizations. Describe the presumption of intention, and explain how this can be rebutted. Describe the three main types of contracts that must be in writing, and explain how this requirement can be fulfilled. Examination sessions: December 2014; June 2015; September 2015 Page 5 of 11
6 5. Interpreting the contract and terminating the contractual relationship 12% to 17% 5.1 Mistake 5.2 Contractual terms 5.3 Misrepresentation, duress, undue influence, and unconscionable transactions 5.4 Privity of contract 5.5 Assignment of contractual rights 5.6 Discharge by performance 5.7 Discharge by agreement 5.8 Discharge by frustration and operation of law 5.9 Discharge by breach 5.10 Remedies for breach Distinguish between the meaning of the term mistake in its legal context and its ordinary meaning. Distinguish between express and implied terms, and explain how a court decides on the meaning of a term used in a contract. Describe the different types of misrepresentation and the remedies available, and define duress, undue influence, and unconscionable transactions. Define the doctrine of privity of contract, and describe the major exceptions to the privity of contract rule. Describe the assignment of contractual rights. Describe discharge by performance, and define the doctrine of substantial performance. Explain how a contract may be discharged by agreement, including the need for consensus and consideration. Define the term frustration and explain how a contract may be discharged by frustration and by operation of law. Describe breach of contract, including the implications of conditions and warranties and the effect of exemption clauses. Describe the remedies for breach of contract. Examination sessions: December 2014; June 2015; September 2015 Page 6 of 11
7 6. Special contracts: Sales and consumer protection 4% to 8% 6.1 Contracts of sale Introduction 6.2 Contracts of sale Title and risk 6.3 Risk and title under the Sale of Goods Act 6.4 Contracts of sale Implied conditions and warranties 6.5 Exemption clauses 6.6 Remedies for contracts of sale 6.7 Consumer protection legislation Describe the criteria required for the Sale of Goods Act to apply. Describe when title and risk pass, and list the four main types of delivery contracts. Describe the five rules for transfer of risk and title under the Sale of Goods Act. Define the terms conditions and warranties, and describe their effect on a contract of sale. Describe when exemption clauses may be used to exclude the Sale of Goods Act. Describe the main remedies available to a seller and buyer in the event of a default. List some of the practices controlled by federal and provincial consumer protection legislation. Examination sessions: December 2014; June 2015; September 2015 Page 7 of 11
8 7. Special contracts: Insurance, employment, and leases 9% to 13% 7.1 The nature and types of contracts of insurance 7.2 The nature of an insurable interest 7.3 Requirement of utmost good faith 7.4 Subrogation 7.5 The employment relationship 7.6 Three types of employment relationships 7.7 Contracts of employment Termination and discharge 7.8 Employee welfare legislation 7.9 Collective bargaining 7.10 Types of leases 7.11 Terms and rights in leasing Describe an insurance contract, and distinguish it from a wagering contract. Describe an insurable interest. Describe utmost good faith, and explain how it affects insurance coverage. Describe subrogation, and explain when it can occur. Describe the tests used to determine whether an individual is an employee. Describe the three types of employment relationships. Explain how an employee relationship can be terminated, including any remedies available. Describe the employment issues covered by federal and provincial legislation. Describe the requirements for a union contract to exist, the various types of disputes, and the methods used for resolving them. Describe leasing, and distinguish between the different types of leases. Describe the common terms used in leases and the rights of the parties involved in lease agreements. Examination sessions: December 2014; June 2015; September 2015 Page 8 of 11
9 8. Debtor and creditor relations 7% to 11% 8.1 Secured transactions Traditional approach 8.2 Secured transactions The Personal Property Security Act 8.3 Guarantees 8.4 The Bank Act 8.5 Bankruptcy and insolvency 8.6 Administration and settlement of a bankrupt s affairs 8.7 Negotiable instruments Describe the three main types of traditional security interests. Explain the purpose of the PPSA legislation, and describe the requirements for gaining priority to goods subject to a security interest. Describe the purpose of a guarantee and explain the obligations of a guarantor. Explain the purpose of the Bank Act. Describe the different procedures available under the Bankruptcy and Insolvency Act. Describe the powers of a trustee, and list the order in which claims must be paid. Describe negotiable instruments, including the concept of a holder in due course. Examination sessions: December 2014; June 2015; September 2015 Page 9 of 11
10 9. Business organizations: Agency and partnership 10% to 16% 9.1 The agency relationship 9.2 Creation and termination of an agency relationship 9.3 Duties of principal and agent in an agency relationship 9.4 Third-party rights under an agency contract 9.5 Sole proprietorship 9.6 The nature of partnership 9.7 Liability of partners 9.8 Relations between partners 9.9 Limited partnerships and limited liability partnerships Describe an agency relationship, and explain how it relates to the rule of privity of contract. Explain how an agency relationship can be created, and describe any concerns upon termination of an agency relationship. Describe the duties owed by an agent and a principal in an agency relationship. Describe the rights of a third party in an agency relationship. List the main advantages and disadvantages of doing business as a sole proprietorship. Describe the concept of partnership, and explain how partnerships can be formed. Describe the liability of partners for partnership debts and for partners personal debts and activities. Describe the effect of a partnership agreement on third parties, and outline the rights and obligations of the partners. Distinguish between a limited partnership and a limited liability partnership. Examination sessions: December 2014; June 2015; September 2015 Page 10 of 11
11 10. Business organizations: Corporations 10% to 14% 10.1 Nature of a corporation 10.2 Methods of incorporation 10.3 Types of corporations 10.4 Corporate shares and bonds 10.5 Contractual capacity of a corporation 10.6 Corporate governance, directors, and officers 10.7 Shareholders Rights 10.8 Shareholders Protection 10.9 Shareholder agreements Describe the nature of a corporation, including when the courts will lift the corporate veil. Describe the main methods of incorporation, and explain the purpose of a corporation s by-laws. Distinguish between federal and provincial incorporation, and widely and closely held corporations. Describe the contractual liabilities of a corporation, including the principal ways in which a corporation can raise funds. Describe the contractual capacities of a corporation, including the indoor management rule and preincorporation contracts. Describe corporate governance and discuss the liability of directors and officers. Describe the rights of shareholders. Describe the remedies available to shareholders. Describe the benefits of shareholder agreements. Examination sessions: December 2014; June 2015; September 2015 Page 11 of 11
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