Business Law – Final Exam Sample Questions 1. List two problems that may be uncovered by a title search, the significance of each. 2. Briefly explain the difference between chattels and choses in action, and provide two examples of each. 3. Briefly define “bailment” and list its two key features. What is its significance? 4. Briefly describe the two requirements that must be met before a work may be protected by copyright. 5. What are the mortgagor’s obligations that must be met to avoid default of the mortgage? 6. What does trademark law protect? Provide two examples. 7. What is the effect of the rule against perpetuities? 8. Describe the requirements for a valid “alter-ego trust.” 9. Name the two types of powers of attorney that someone should have in Ontario. Chapter -15: Power of Attorney,docs in which a person grants power over his/ her assets or personal care to another person. GRANTOR Person who grants the power over his or her asset to another person. ATTORNEY Person power granted to. The Substitute Decisison Act 1992 , bought new kind of power –Power of attorney for personal care. At no time past /present has the law allowed an attorney to act beyond the death of the grantor, i.e. when the grantor of power of a POA dies the power of attorney ceases to be effective, and if the attorney continues the act under the apparent POA ,he/she will face criminal or civil liability.. FORMAL REQUIREMENTS OF POA : POA for Property POA for Personal Care · Must be in writing · Must be signed by grantor · 2 witness · For property, POA has to be continuing means – POA is intended to be used during subsequent legal incapacity of grantor. · So POA prop has to b a continuing one. Same as POA for property. Requirement of POA Personal Care: · Appointment of Attorney, · Authorization : giving authorization to the attorney · Stating that the grantor is of full age 16,proper mental capacity , awareness and qualification. · Specific Condition or Restriction in POA. · Any specific instructions. · Consent to treatment. · Indemnification WHEN IS PAO EFFECTIVE : POA mentions whether it is effective immediately or should be made effective at some future time. In case if time of effectiveness isn’t mentioned then , it is deemed to be effective from the moment it is signed, means the attorney has the `right to deal with the grantor`s assets from the moment the POA for property is signed (provided he has POA docs With him in his possession at that time). Bcoz of the serious legal repercussions of finding a legal incapacity or medical practitioners are understandably reluctant to make such a diagnosis without a full scale assessment POA dsnt comes into effect tiil : · The attorney is notified in the prescribed form by an assessor that the assessor has performed an assessment of grantors incapacity · That attorney is notified that a certificate of incapacity had been issued in respect of the grantor under the mental health act. WHO ALL CAN ASSESS: · the college of physician and surgeon Ontario · the college of psychologists of Ontario · the Ontario college of Certified Social Workers · the college of occupational therapists of Ontario · the college of Nurses of Ontatrio THE ASSESSOR SHOULD HAVE PROFESSIONAL LIABILITY INSURANCE OF ATLEAST $1000000. Unlike the POA for prop, which is deemed to be effective the moment its signed unless otherwise stated in a doc , the POA OF PERSONAL CARE is effective only upon the incapacity of the grantor. Definition of TREATMENT as per law: To encompass positive action on the part of a health care provider foe the benefit of a health care provider for the benefit of the person in question . ELIGIBILITY OF ATTORNEY FOR PROP · age must be 18 , · sound mind · willing to assume the role of the attorney As it depends on the willingness of an individual to become attorney or not ,if the attorney has decided not to take the role , POA dsnt get invalid , its only invalid for all practical purposes, in that case if the grantor becomes incapacitated his or her affairs may be taken over by an interested party perhaps a friend or a relative and as a last resort by the Office of Public Guardian and Trustee. For POA Property it is advisable to have SUBSTITUTE OR JOINT ATTORNEY FOR PROPERTY , to name more than one attorney. EILIGIBILITY OF ATTORNEY FOR PERSONAL CARE: · must be 18 · must be of sound mind · a person is not eligible for a POA personal care if he or she provides health care, residential care ,social training or support services to the grantor for compensation. ELIGIBLE GRANTOR FOR GIVING CONTINUING POA · knows what kind of property he or she has and its approximate value; · is aware of obligations owned to his or her defendants; · knows that the attorney will be able to do on the persons behalf anything in respect of property that the person could do if capable ,except make a will A person is capable of giving a power of attorney for a personal care if the person:¸ · has the ability to understand whether the proposed attorney has a genuine concern for the person`s welfare · appreciates that the person may need to have the proposed attorney make decisions for the person. PEOPLE WHO CANT BE WITNESS · the attorney or the attorneys spouse or partner · the grantors spouse or partner · a child of the grantor or a person whom the grantor has demonstrated a settled intentions to treat as his or her child · a person whose property is under guardianship or who has a guardian of the person · person who is less than 18 · unsound mind SUBSTITUTE OR JOINT ATTORNEYS Grantor needs to name to mention 2 or more attorneys to act as attorney, for in case if the mentioned attorney dies , or becomes mentally incapacitated with no reasonable hope of recovery or ceases to act as a attorney. · All the named attorneys should work jointly or together. · Joint attorneys signatures on all the documents executed under the power such as transfer of land, mortgage , cheques and so on. · Disadvantages of this is , if anyone of the attorney is unavailable to sign a doc the POA for Prop cannot be used. · If one of the attorney deceases then the surviving attorney has to to provide docs to third party declaring the death ,and provide –funeral directors statement of death as an evidence. TERMINATION OR REVOCATION OF POA ---- PROPERTY · The attorney dies or becomes incapable of managing property and there is on joint or substitute attorney. · The court appoints a guardian of the grantors property · The grantor creates a new power of attorney for property (unless the grantor provides for multiple co-existign powers of attorney · The grantor revokes the POA · Grantor dies · The revocation of a continuing power of attorney must be in writing and executed ìn the same way as a continuing power of attorney. TERMINATION OR REVOCATION OF POA ---- Perosonal care · the attorney dies or becomes incapable of making personal care decisions, and there is no other joint attorney or alternative attorney · the appoints guardian of the grantor · the grantor creates a new POA for personal care (unless the grantor provides for multiple co-exixitng powers of attorney) · the grantor revokes the POA. RESIGNATION OF ATTORNEYS · if the attorney has already acted in his or her capacity as attorney, he or she must put the resignation in writing and deliver it to the following persons; · the grantor of the POA · any co-attorneys under the POA · any substitute attorneys named in the POA RESTRICTED AND GENERAL POWERS OF ATTORNEY General Power of Attorney, can be both continuous gives unrestricted powers over the grantors asserts to the attorney or attorneys both before and after the grantor becomes legally incapacitated If its non-continuing general POA,gives attorney unrestricted powers over grantors asset up until the time the grantor becomes legally incapacitated. ACCOUNTABILITY OF WORK OF ATTORNEYS. · Attorneys for property as entitled to take compensation for their actions as attorneys. · Compensation subject to court ruling i.e., 3% of capital and income receipt, 3% of capital income and disbursements and three fifths of 1% of annual average value of assets. Attorney of personal should keep an record of : · A list of all decisions regarding health care, safety and shelter made on behalf of the incapable person incl the nature of each decision the reason for it · A copy of medical reports or other documents if any relating to each decision · The names of any person consulted incl the incapable person in respect of each decision and the date · A description of the incapable persons wishes if any relevant to each decision that he or she expressed when capable and the manner in which they were expressed N:B: Grantors of POA for prop often execute more than one original document, because the power given to the attorney is often effective immediately, unless the document states that it becomes effective only upon the grantors incapacity or some other future event, putting several originals in circulation could pose considerable risk to the Grantor. This reason, the lawyer often recommends that the original powers of attorney for property be kept in the lawyers office. IN that case, the lawyer is obligated to keep the documents safe in the same way that he or she keeps original wills safe. CH -17 PROPERTY LAW: PEROSNAL ,REAL AND INTELLECTUAL PROPERTY LAW: collection of rules that confers rights of ownership, possession and transferability over things. PUBLIC PROPERTY: things owned by the government for the benefit of society. PRIVATE PROPERTY: things owned by individuals, business or other organizations. TANGIBLE PROPERTY: physical things INTANGIBLE PROPERTY ; things whose value doesn’t arise from their physical attributes. GOODWILL : a business`s good reputation. REAL PROP TANGIBLE PERSONL INTANGIBL PERSNL PROP · LAND · BUILDINGS · FIXTURES(sinks,lighting fixtures, built in shelving) · Automobile · Furniture · Computers · Inventory · Office supplies · Machinery · Shares in a corporation · Goodwill · Negotiable instrument(cheques,promissry notes) · Intellectual property(trademarks,copyright,patents,industrial design ,integrated circuit topography) REAL PROPERTY :immovable things ,incl land ,building and fixtures PERSONAL PROP: movable ,tangible things,incl physical objects that are not attatched to land ,building and intangible property INTELLECTUAL PROP: things created by the mind or intellect,such as logos and inventions. IMPORTANCE OF PROPERTY LAW: · It defines areas where your business may be vulnerable to loss. · It sometimes allow ownership and possession to be split. · It promotes the lending and borrowing of money · It allows innovation to flourish Personal Property: Have chattel and chose in action : CHATEL : something (such as a slave, piece of furniture, tool, etc.) that a person owns other than land or buildings (tangible ) are movable items of property or goods –distinct from land,buildings and fixtures attached to land and building. ex : staplers , paper that stapled together ,pens and pencils are chatters, that can be picked form one place to another. CHOSE (intabgible) : including negotiable instruments, such as cheques ,money orders, promissory notes, like other type of property, negotiable instruments are important assets that are included in the balance sheet of any business. A property right in something intangible (intanglible property), or which may be tangible but are not in one's possession, but enforceable through legal or court action OWNERSHIP POSSESSION When you own something you hold valid title to it, typically a deed for real property. For other property, you own it because you can prove you paid for it, or it's in your house and no one disputes that it's yours. Possession can be more temporary. When you have something you use, you have possession of it. You can have possession of things you own, borrow, use, or even just pick up and carry around for awhile. Possession is a key ownershipright and owners of the property may grant this right to others by giving them permission to posses tjeir property When the possession and ownership of a good is split means, a good is owned by someone and possessed by someone, the legal relationship between the owner and the possessor is called bailment.----- BAILMENT. The two key features of Bailment : · The split between possession and ownership of goods, · The intention that the situation is temporary. Bailor : owner Bailee : possessor Every bailee has the duty to take care of bailor`s good, Bailor may sue the bailee for the tort of negligence if the goods are damaged. BAILMENT standard of care – the degree to which the bailee must be careful with the goods or the degree to which the bailor must be careful that the goods will not cause harm . TYPES OF BAILMENT LUCRATIVE: Money or other payment changes hands. Transaction Type: renting storage units or warehouse space, leasing vehicles,leasing postage meters,lleasing photocopiers,renting water coolers, using email or courier to send a package CONSTRUCTIVE: bailor loses personal property which comes to possession of the bailee. SPECIAL: particular obligations are imposed by statute on certain bailment relationships, such as those undertaken in the hotel business. GRATUITOUS: no money or other payment changes hand. REAL PROPERTY : Real property also called realty or real estate, is generally defined as land,buildings,and fixtures, land includes the minerals and water below its surface as well as the airspace above. Fixtures are items such as shelving, sinks or equipment that are attached to buildings,when real estate is sold ,all fixtures are included in the sale unless specified otherwise. An interest in land is a property or ownership right that is obtained in or over land. FEE SIMPLE : (OWNERSHIP RIGHT in land where the owner can do what he desires including transfer, sell and dispose it. Fee simple estate is granted by the govt , right includes the the right to posses the real property ,exclude others, pay tax on the property owned and failure of paying tax will cease the ownership from the owner. LIFE ESTATE: WHEN someone has life estate interest in a piece of land, they have the ability to retain an interest in the property while being in possession of the property for the duration of their lifetime. They are nt considered as owners in the sense of having ownership rights as an interest in fee simple does, a life estate owner is subject to using this land that was loaned to them in a reasonable manner.This means maintaining the land in accordance with how the grantor ( the person who transferred the land to them ) desired the land to be maintained. Life estate is a loan of an interest in a land to another person, n its not their to keep and they have to give it back in good condition. LEASEHOLD INTEREST When someone has rented a property or unit for a specific duration and sometimes for a specific purpose ,such as profit. Person who is the owner and leases the pror is lessor and the person who rents is lesee.