Managing The Law: The Legal Aspects Of Doing Business, 3rd Edition Test Bank

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ExamName___________________________________MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.1)Which of the following statements is TRUE with respect to administrative law?1)A)Administrative law is concerned with the behaviour of public officials and therefore is notparticularly important to business people.B)Administrative law affects the government, but not private individuals or corporations.C)Administrative law is usually classified as a branch of criminal law.D)because of theConstitution, administrative law applies at the federal and provincial levels, butnot at the municipal levelE)Administrative law is necessary because of the tendency of modern governments to delegateauthority.Answer:EExplanation:A)B)C)D)E)2)The federal, provincial, and territorial governments have decided to re-consider the contents of theCharter. They are particularly interested in the possibility of protecting economic and propertyrights. Which of the following statements is TRUE?2)A)Since theCharterapplies to the relationship between private citizens, it should protecteconomic and property rights.B)The introduction of a newCharterright for the protection of economic and property rightswould be desirable primarily because it would increase the federal government's ability toregulate natural resources.C)Although theCharterdoes not currently contain a section devoted exclusively to theprotection of economic and property rights, the right to "liberty" in section 7 of theCharterhasbeen judicially interpreted in a way that broadly provides such protection.D)The Supreme Court of Canada has said that because theCharterdoes not limit economic andproperty rights, every Canadian enjoys the unconstrained right to transact business wheneverone wishes.E)The introduction of a newCharterright for the protection of economic and property rightswould probably make it easier for courts to compel governments to ensure that everyCanadian enjoys adequate housing.Answer:EExplanation:A)B)C)D)E)1

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3)The rights and freedoms contained in theCharterare limited3)A)to cases involving substantial amounts of money.B)to cases involving interactions between different governments.C)by the ability of a federal or provincial government to invoke the notwithstanding clause.D)to situations in which the government created a law in bad faith.E)to human beings, with the result that theChartercannot work in favour of a company.Answer:CExplanation:A)B)C)D)E)4)Eric, who is a resident of Saskatchewan, has sued Trois Etoiles Ltd, which is a company based inQuebec, for breach of contract. Which of the following statements is TRUE?4)A)The case will be heard in a "civilian jurisdiction" if the claim is heard by a Saskatchewan courtapplying the laws of Saskatchewan.B)The case can be classified as a "public matter" because it involves a person suing a companyfor breach of contract.C)The case would be classified as a "criminal matter" if Eric sued the government of Quebecrather than the Quebec company.D)The case can be classified as a "civil matter" under the "common law" if it is decided on thebasis of the laws of Saskatchewan.E)The case can be classified as a "international law" matter if the claim is heard by a Quebeccourt applying the laws of Quebec.Answer:DExplanation:A)B)C)D)E)5)Which of the following statements is TRUE with respect to risk management and incorporation?5)A)Incorporation spreads the risk of liability because if one corporation becomes liable, everyother corporation in the same province may be required to pay the debt.B)Incorporation is irrelevant to risk management because corporations cannot be held liableC)Incorporation reduces the risk of liability because the doctrine of limited liability usuallymeans that a corporation's debts must be paid by the corporation and not by the people whorun the corporation.D)Incorporation completely eliminates the risk of liability because the government isresponsible for a corporation's debts.E)Incorporation increases the risk of liability because a shareholder of a corporation ispersonally liable for all of the corporation's torts.Answer:CExplanation:A)B)C)D)E)2

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6)Which of the following statements is TRUE?6)A)The Prime Minister is the person who leads the party that has the most number of senators.B)Before a bill becomes a federal law, it must receive royal proclamation, which is given by theLieutenant General on behalf of the Queen.C)In Parliament, a bill can become a law only if it is supported by at least two-thirds of senators.D)In Parliament, a bill cannot become a law unless it has passed through four readings in theHouse of Commons and four readings in the Senate.E)Regulations, statutory instruments, ordinances, and Orders-in-Council are types ofsubordinate legislation.Answer:EExplanation:A)B)C)D)E)7)The Dark Room Bookstore was recently charged under theCriminal Codewith selling magazinesthat contain photographs of people involved in violent and degrading sexual acts. The owner of thebookstore believes, however, that the government should not interfere in the private lives of itscitizens and that he has a right to express his sexuality through the sale of such magazines. Whichof the following statements is TRUE with respect to theCharterin this situation?7)A)Once a court decides that the relevant provision of theCriminal Codedoes violate the right tofreedom of expression, it becomes impossible to save that provision under section 1 of theCharter.B)because theCharterapplies only to government actions, it will not apply to this case unlessthe court is satisfied that at least one of the magazines was sold to a government officialC)because freedom of expression is one of the fundamental rights that is contained in section 2of theCharter, it cannot be subject to the notwithstanding clauseD)TheCharteris irrelevant in this case because the corporation that owns the store is not aperson and therefore cannot claim the right to freedom of expression.E)Even if the Dark Room Bookstore is a private company, theChartermay apply because theCriminal Codeis a government statute.Answer:EExplanation:A)B)C)D)E)8)TheCharterincludes (among other things) rights regarding8)A)equality based on religion, age, and ethnic origin.B)ownership, expression, and association.C)Aboriginals, multiculturalism, and accommodation.D)mobility, housing, and equality.E)contracts, sexual orientation, and religion.Answer:AExplanation:A)B)C)D)E)3

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9)The Citizen's Coalition for Property Rights (the CCPR) believes that theChartershould protect theright to own property. Which of the following statements is TRUE?9)A)because property rights are listed under section 91 of theConstitution, the CCPR will not haveto persuade the federal government to amend theCharterB)TheChartercannot be amended unless, among other things, the federal Parliament agrees.C)TheChartercannot be amended unless the government holds a referendum and allowsindividual Canadians to vote on the issue.D)The CCPR has no need to worry because property rights are already expressly protected bytheCharter.E)TheChartercan be amended as long as at least half of the Canadian population supports theprotection of property rights.Answer:BExplanation:A)B)C)D)E)10)Omicron Inc claims that a municipal bylaw violates its right to equality under section 15(1) of theCharter. Section 15(1) states: "Every individual is equal before and under the law and has the rightto the equal protection and equal benefit of the law without discrimination" based on variousgrounds. The company will lose its argument because10)A)although some parts of theCharterapply to corporations, section 15(1) is limited to"individuals" and therefore cannot apply to OmicronB)Section 15(2) of theCharterprevents Omicron Inc from using section 15().C)theCharterapplies to federal, provincial, and territorial statutes, but not to municipal bylaws.D)theCharternever applies to corporations.E)section 15(1) of theCharterwas recently repealed (that is, done away with).Answer:AExplanation:A)B)C)D)E)11)A provincial statute says that a monthly allowance of $250 is available to "any parent or set ofparents that cares for an adopted child who is under the age of 12." That provision was challengedunder theCharterby a parent who cares for a young child to whom she gave birth. The court agreesthat the statute discriminates against "birth parents." As a remedy, the court could11)A)strike down the statute, but suspend the effect of that remedy in order to give the governmenttime to re-draft the legislation.B)declare that the relevant provision is valid under theCharterand is therefore unconstitutional.C)allow the federal government to amend the provincial statute.D)grant an injunction that allows the parents to re-draft the statute in a way that extends theallowance to birth parents.E)read in a broader definition of "parent" that excludes both adoptive parents and birth parents.Answer:AExplanation:A)B)C)D)E)4

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12)Our legal system contains various types of laws. It occasionally is necessary to consider therelationship between two or more areas of law. Which of the following statements is TRUE?12)A)The relationship between an employer and an employee is governed entirely by the law ofcontract.B)A lawyer who provides careless services sometimes may be sued in both tort and contract.C)Because they deal with different types of rules, it is impossible for criminal law and tort lawto ever apply to the same set of facts.D)"White collar crime" is a misleading phrase because the relevant concepts arise in tort lawrather than criminal law.E)Because they involve obligations that arise from different sources, it is impossible for tort lawand contract law to ever apply to the same set of facts.Answer:BExplanation:A)B)C)D)E)13)Lamda Corp is based in Vancouver, but sells products across Canada. Which of the followingstatements is TRUE with respect to Lamda Corp and theCharter?13)A)Although Lamda enjoys freedom of religion and freedom of expression, it is not a person andtherefore it does not enjoy equality rights.B)Although Lamda Corp enjoys freedom of religion, it does not enjoy freedom of expression.C)Although Lamda Corp enjoys freedom of expression, it does not enjoy freedom of religion.D)Although the people who work for Lamda Corp enjoyCharterprotection, the company itselfis not a person and therefore is not protected by theCharter.E)Although Lamda Corp does not enjoy anyCharterrights, it may be sued if it violates theCharterrights of one of its employees.Answer:CExplanation:A)B)C)D)E)14)Subordinate legislation14)A)always consists of bylaws.B)involves a statute that was introduced to change an existing statute.C)always prohibits certain forms of behaviour.D)is practically necessary because it is impossible for legislators to constantly monitor all of theirstatutes.E)is always created at the provincial level, rather than at the federal level.Answer:DExplanation:A)B)C)D)E)5

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15)Which of the following statements is TRUE with respect to the law of Quebec?15)A)Even though Quebec inherited much of its law from France, it uses some of the same lawsthat apply in other parts of Canada.B)because Quebec inherited its laws from France, its criminal laws are different from those thatapply in other parts of CanadaC)Quebec is considered a common law jurisdiction because it inherited most of its laws fromEngland.D)Quebec is considered a common law jurisdiction because it inherited laws that were oncecommon to all parts of the Roman empire.E)because Quebec inherited its laws from France, its constitutional laws are different from thosethat apply in other parts of CanadaAnswer:AExplanation:A)B)C)D)E)16)Which of the following statements is TRUE with respect to exclusion clauses and risk management?16)A)An exclusion clause can be inserted into a contract for the sale of goods.B)An exclusion clause can affect liability for property damage, but not for personal injury.C)An exclusion clause represents a type of risk acceptance.D)An exclusion clause always shifts the risk of liability onto an insurance company.E)An exclusion clause can be used by a person, but not by a corporation.Answer:AExplanation:A)B)C)D)E)17)The Town of Blackville created a set of rules for the licencing of businesses. Which of the followingstatements is likely TRUE?17)A)The rules take the form of statutes, rather than bylaws.B)The rules are a form of superior legislation.C)Blackville is located in Quebec.D)The Town of Blackville was created under the authority of a provincial statuteE)Blackville was created by a statute in Parliament.Answer:DExplanation:A)B)C)D)E)6

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18)Which of the following statements is TRUE?18)A)The territories have legislatures, but not senates.B)Each province has a senate.C)The legislature in each and every province and territory is called the Legislative Assembly.D)Parliamentary bills are always introduced in the House of Commons before being sent to theSenate.E)The Queen is represented by a lieutenant governor in each province and territory.Answer:AExplanation:A)B)C)D)E)19)A provincial government recently enacted a statute that established a scholarship for "Aboriginalstudents who are enrolled at Canadian universities." Melissa, a university student whose ancestorswere all born in England, believes that the scholarship is unconstitutional because it unfairlydiscriminates against her on the basis of her race. If Melissa brought that complaint to court, ajudge would likely say that19)A)because Canadian universities are private institutions, the facts do not reveal any governmentaction that could possibly trigger theCharter's provisionsB)Melissa is entitled to participate in the scholarship scheme because she is a woman andbecause theCharterprefers rights based on sex to rights based on race.C)the scholarship is unconstitutional because the federal government has exclusive jurisdictionover education as a result of section 92 of theConstitutionD)the scholarship is valid under section 15(2) of theCharterbecause it is aimed at improving theconditions of a disadvantaged groupE)the scholarship presumably is unconstitutional because it discriminates on the basis of race,and that it can be saved, if at all, only under section 1 of theCharterAnswer:DExplanation:A)B)C)D)E)20)Attila works for Epsilon Inc. The police recently became aware of illegal activities in connectionwith that organization. Which of the following statements is TRUE?20)A)Even if Attila and Epsilon Inc are convicted of crimes, they may also be sued privately.B)A "white collar crime" is the same thing as a "corporate crime."C)Epsilon Inc may be charged with a "white collar crime," which is any crime that wascommitted by a corporate organization, rather than an individual.D)Attila may be charged with a crime, but Epsilon Inc cannot, because only a human being canbe convicted of a criminal offence.E)Neither Attila nor Epsilon Inc can be charged with a "corporate crime" unless they broke alaw that was intended to protect another corporation.Answer:AExplanation:A)B)C)D)E)7

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21)Betta Inc has discovered that one of its products is potentially dangerous. It therefore pulled thatproduct from the store shelves before any were sold. It has employed a form of risk managementknown as21)A)risk denial.B)risk reduction.C)risk acceptance.D)risk destruction.E)risk avoidance.Answer:EExplanation:A)B)C)D)E)22)Alpha Corp has discovered that one of its products is potentially dangerous. It therefore haspurchased liability insurance. It has employed a form of risk management known as22)A)risk elimination.B)risk capitalization.C)risk avoidance.D)risk shifting.E)risk acceptance.Answer:DExplanation:A)B)C)D)E)23)Red River Inc, which is based in Winnipeg, Manitoba, has sued a company called Eiffel Tours,which is based in Paris, France. That dispute will be decided by the "common law." That mostlikely means that the case will be decided by23)A)a legal system that can be traced to England.B)the provision of a statute.C)a legal system that can be traced to France.D)a government official, other than a judge.E)a law that is frequently applied in both France and Manitoba.Answer:AExplanation:A)B)C)D)E)8

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24)Techniques for managing risks include24)A)insurance and incorporation, but not exclusion clauses.B)vicarious liability, employment, and theCharter.C)incorporation, insurance, and exclusion clauses.D)exclusion clauses, negligence, and contract.E)independent contractors, exclusion clauses, and residual powers.Answer:CExplanation:A)B)C)D)E)25)Suppose that there is a general feeling in certain parts of the country that judges should be elected,rather than appointed. A system of electing judges can be introduced only through a constitutionalamendment. That means that25)A)the new system must be supported by at least half the provinces, and those provinces mustcontain at least two-thirds of the country's population.B)the federal Parliament can adopt the new system as long as there is majority support in boththe House of Commons and the Senate.C)the Prime Minister must call an election.D)there must be unanimous agreement by all of the provincial legislatures.E)the new system must be supported by Parliament, plus two-thirds of the provinces, wherethose consenting provinces represent at least half of the Canadian population.Answer:EExplanation:A)B)C)D)E)26)In an effort to increase sales, Delta Ltd hired Chandra, a marketing expert. Because Delta wasconcerned about being held responsible for any torts that Chandra might commit, it arranged tohire her as an independent contractor, rather than an employee. It has employed a form of riskmanagement known as26)A)vicarious liability.B)independent responsibility.C)risk shifting.D)risk allowance.E)incorporation.Answer:CExplanation:A)B)C)D)E)9

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27)Gamma Co has discovered that one of its products is potentially dangerous. That danger, however,is not great. There is only a small chance that someone will be hurt, and even if someone is hurt, theinjury will not be life-threatening. Gamma Co therefore has decided to do nothing about thedanger. It has employed a form of risk management known as27)A)risk aversion.B)risk acceptance.C)risk ignorance.D)risk displacement.E)risk harmonization.Answer:BExplanation:A)B)C)D)E)28)The notwithstanding clause28)A)must be re-invoked every ten years in order to remain in effect.B)is seldom used by governments because it involves a decision to override fundamental rightsand freedoms.C)is contained in section 1 of theCharter.D)is applied to Canadian laws regularly.E)can be applied with respect to each and every the right and freedom contained in theCharter.Answer:BExplanation:A)B)C)D)E)29)During a trial, a lawyer raised an argument based on the concept of the "residual power." Thelawyer's argument must29)A)be concerned with the federal government.B)involve an issue of private law.C)have something to do with the municipal governments.D)be concerned with the amending formula.E)be based on either section 98 or section 99 of theConstitution.Answer:AExplanation:A)B)C)D)E)10

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30)Epsilon Inc has recently retained the services of Noriko as in-house counsel. Which of the followingstatements is most likely TRUE?30)A)Noriko can both help to resolve legal problems and help to prevent legal problems fromarising in the first place .B)Epsilon Inc has hired Noriko for the purpose of resolving a single legal problem that itexpects will drag on for several years.C)Noriko may provide advice to Epsilon, but she cannot represent the company in court.D)Epsilon Inc has probably made a mistake because, like most in-house counsel, Noriko isprobably available because she cannot find work in a law firm.E)Although Noriko is not an employee of Epsilon Inc, she can be called in from her law firmwhenever the company has a legal problem.Answer:AExplanation:A)B)C)D)E)31)A court recently found, as a matter of fact, that a party's ability to advertise was restricted. In somecircumstances, such a restriction violates section 2(b) of theCharter. Ultimately, however, thecourt's decision did not allow the affected party to advertise as it wished. Which of the followingstatements may explain that end result?31)A)The restriction was imposed by a statute and the government responsible for that statutereacted to the court's decision by invoking the residual clause.B)The restriction was saved under section 15(2) of theCharter.C)The party was not entitled to freedom of expression because it is a company, rather than ahuman being.D)The restriction was imposed by a private party, rather than by a government actor.E)The court held that the restriction was an "unreasonable limitation" on the freedom ofexpression.Answer:DExplanation:A)B)C)D)E)32)The category of public law contains32)A)criminal law, employment law, and constitutional law.B)constitutional law and tax law, among other things.C)administrative law and tax law, but not criminal law.D)constitutional law and administrative law, but not tax law.E)any case in which a government sues or is being sued.Answer:BExplanation:A)B)C)D)E)11

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33)The category of private law contains33)A)rules that govern personal matters, such as the right to privacy, but not rules that governpublic matters, such as the contracts of a public company.B)contract law and property law, but not tort law, which is closely related to criminal law.C)only those cases that the parties resolve themselves, or with the assistance of a neutral thirdparty other than a judge.D)contract law and tort law, but not if a government has sued or is being sued.E)real estate transactions, lawsuits based on deceit, and the violation of copyrights, among otherthings.Answer:EExplanation:A)B)C)D)E)34)The three steps in risk management are34)A)realization, response, and reaction.B)evaluation, qualification, and litigation.C)assessment, formulation, and implementation.D)recognition, evaluation, and insurance.E)identification, evaluation, and response.Answer:EExplanation:A)B)C)D)E)35)Which of the following statements is TRUE with respect to municipalities?35)A)Cities are municipalities, but towns are not.B)Some types of subordinate legislation have nothing to do with municipalities.C)A municipality is created when a higher level of government passes a by-law.D)Most municipalities are created by the federal government, rather than by provincialgovernments.E)Laws that are created by municipalities are called subordinate legislation.Answer:BExplanation:A)B)C)D)E)12

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36)The Premier of your province wants to invoke the notwithstanding clause in order to avoid theconsequences of a recent decision by the Supreme Court of Canada. Before he tries to do so,however, he wants to know as much as possible about the notwithstanding clause. Which of thefollowing statements is TRUE?36)A)The notwithstanding clause can be used against equality rights, but not against mobilityrights.B)If the notwithstanding clause is invoked, it will have effect for ten years, after which it willlapse unless it is re-applied.C)The notwithstanding clause has been invoked frequently in the western provinces, but not inOntario.D)The notwithstanding clause can be invoked by the federal government, but not by aprovincial government.E)The notwithstanding clause cannot be invoked unless the relevant people are willing toamend theConstitution.Answer:AExplanation:A)B)C)D)E)37)In an effort to protect its dairy industry, a provincial government passed a law that prohibits theimportation or manufacture of soy milk. If a soy milk company challenges that statute onconstitutional grounds, what would a court likely say?37)A)The statute is entirelyultra viresbecause federal jurisdiction over international andinter-provincial trade extends to every issue that is related to trade, including themanufacture or production of soy milk.B)The federal government has jurisdiction over international trade, but not overinter-provincial trade.C)because property rights are protected by theCharter, the statute is constitutionally invalidD)The statute is at least partiallyintra viresbecause provinces have the authority to regulate theproduction or manufacture of things like soy milk.E)Inter-provincial trade is an issue that provinces are entitled to decide for themselves.Answer:DExplanation:A)B)C)D)E)38)A province created a statute. A court ruled that the statute wasultra vires. That means that38)A)the statute must violate theCharter.B)the province acted contrary to the division of powers.C)the statute must deal with public law, rather than private law.D)the statute has full force (ultrameans "most" andviresmeans "strength," as in "virility").E)the statue applies both inside and outside of the province.Answer:BExplanation:A)B)C)D)E)13

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39)Sigma Inc sued Tau Ltd for breach of contract and asked for the remedy of specific performance.The case will be heard in Alberta. Which of the following statements is TRUE?39)A)Because of the fusion of courts, there no longer is any need to draw a distinction between lawand equity.B)Sigma Inc's claim against Tau Ltd is a common law claim because it will be decided on thebasis of laws that historically were developed in French courts.C)Specific performance is a common law remedy because it was historically created by judges,rather than by legislators.D)Specific performance is an equitable remedy because it historically was awarded by the courtof legislators.E)Sigma Inc's claim against Tau Ltd is an example of legislative litigation because it involves aclaim by one private party against another private party.Answer:CExplanation:A)B)C)D)E)40)Which of the following statements is TRUE with respect to theCharter?40)A)It only applies in favour of a government or a government actor.B)because it is intended to protect people's rights and freedoms, it severely limits the groundsupon which courts can strike down lawsC)It is a federal statute.D)It was introduced in 1982.E)It applies to federal laws, but not provincial laws.Answer:DExplanation:A)B)C)D)E)TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.41)Bianca punched Mick. She now finds herself in court. The person arguing the case against her isMick himself. It is safe to assume that the court is concerned with a private law issue, rather than acriminal law issue.41)Answer:TrueFalseExplanation:42)Paul has committed a legal wrong against Buckmaster Strings Inc. Depending upon thecircumstances, it may be possible for legal proceedings to be taken against Paul in both criminallaw and tort law.42)Answer:TrueFalseExplanation:14

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43)Kane Media Inc wants to start a new radio station. The government has refused to grant a licence.Kane Media Inc believes that the government's position is blatantly discriminatory. Nevertheless, itcannot rely on theCharter of Rights and Freedoms, which was intended to protect the fundamentalrights and freedoms of people, and which does not apply in favour of companies.43)Answer:TrueFalseExplanation:44)Sabeka Inc has discovered that one of its products may cause consumers to suffer a certain form ofproperty damage. In response to that risk, the company has written an exclusion clause into itssales contracts. In doing so, it has adopted a form of risk management known as risk shifting.44)Answer:TrueFalseExplanation:45)Quebec is said to be a "civil law system" because it is derived from the legal system that governedthe citizens of ancient Greece.45)Answer:TrueFalseExplanation:46)Quiet Corner Bookstore is something of a landmark. It was opened in 1908 and it has long servedthe needs of the community. The store's popularity is based not only on its reputation for excellentservice, but also on the fact that it has always been run by members of the same family: the Meyersclan. In an age of increasingly anonymous chain stores, customers appreciate the personal touchthat they receive at the Quiet Corner. Recently, however, the government has announced that itintends to expropriate the land upon which the store is located in order to build a highway throughthe neighbourhood. The Meyers family may, however, be able to defeat that plan, and save theirstore, by relying on a provision of theCharterthat protects cherished property.46)Answer:TrueFalseExplanation:47)The law can affect a business both positively and negatively. It often prohibits actions thatotherwise would be possible. However, it sometimes permits parties to do something that theycould not otherwise do.47)Answer:TrueFalseExplanation:48)Glimmer Co recently received a tax assessment with which it disagrees. It does not believe that itshould be required to pay the full amount of the demand. If it challenges the assessment, the casewill fall into the category of "public law" even though the company is a private corporation.48)Answer:TrueFalseExplanation:49)Betta Inc has recently discovered that a defect in one of its products poses a risk of injury toconsumers. Its only option, from a risk management perspective, is to eliminate the risk of liabilityby removing the product from the market.49)Answer:TrueFalseExplanation:50)Because of the need to ensure that the fundamental rules for governing the country are kept up todate, theConstitution(unlike most statutes) is quite easily amended.50)Answer:TrueFalseExplanation:15
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