TEST BANK Business Law in Canada 13/CE Richard Yates
Ch 1. Managing Your Legal Affairs
1. In the context of a sophisticated client, "sophisticated" can best be defined as
a. complicated, self-reliant, and cosmopolitan.
b. refined and cultured.
c. simple and naïve.
d. confident, knowledgeable, and up to date.
e. aggressive, dynamic, and forceful.
2. Which of the following best describes the likelihood of a student becoming involved in a
situation necessitating legal advice?
a. A student, or someone close to a student, sometimes becomes involved in such a situation.
b. A student, or someone close to the student, will always become involved in such a situation.
c. Because students are not business people, they never become involved in such situations.
d. Because students cannot be sophisticated, they will often become involved in such situations.
e. Legal advice is not available to students.
3. Raman is a sophisticated client. This means that she
a. understands how to manage a lawyer-client relationship.
b. has a law degree.
c. is a small business owner.
d. manages her legal affairs without assistance from a lawyer.
e. will probably never find herself in a situation necessitating legal advice.
4. Which of the following is not a good reason for a businessperson to seek advice from a lawyer?
a. The businessperson cannot find the necessary legal information.
b. The businessperson cannot understand the necessary legal information.
c. The necessary legal information is available online.
d. It would take too long for the businessperson to find the necessary legal information.
e. The businessperson is facing criminal charges.
5. For sophisticated clients, the availability of an abundance of legal information online is
a. a negative development, because online information is rarely accurate or helpful.
b. a positive development, because it means that they will no longer need to retain lawyers as part of
their team.
c. a negative development, because accessing this information tends to be more costly than retaining a
lawyer.
d. a positive development, because it provides greater access to information they can use as part of
their decision-making process.
e. a neutral development, because lawyers are still the only ones able to access this information.
6. When searching online for legal information, it is best to
a. trust that if it is published online, it must be accurate.
b. never trust the information found on a website.
c. use American sources, as they tend to be more comprehensive than Canadian ones.
d. gauge the accuracy of the information by the look of the website.
e. seek input from a lawyer when answers cannot be readily found.
7. Sophisticated clients
a. do not need to retain a lawyer.
b. know that it is better to hire a lawyer than to conduct research on one's own.
c. are willing to pay for legal advice at any cost.
d. tend to be embarrassed to request legal advice.
e. have the skill and confidence to find basic legal information.
,Ch 1. Managing Your Legal Affairs
8. The primary purpose of an initial consultation with a lawyer is
a. to arrange payment of the lawyer's fees up front.
b. to develop strategies for dealing with the legal situation in question.
c. for the prospective client to decide whether to retain the lawyer.
d. for the prospective lawyer to help mediate the current dispute.
e. to discuss the availability of Legal Aid.
9. The decision to enter the lawyer-client relationship should be
a. made quickly to ensure that no one else can retain your lawyer.
b. solely up to the lawyer, as he or she is the one with the legal training.
c. made primarily on the basis of cost.
d. a mutual decision made primarily on the basis of trust.
e. solely up the client, as the client is the one paying for the services.
10. When someone refers you to a particular lawyer, you should
a. retain the lawyer regardless of who gave you the referral.
b. gauge the referral on the basis of the level of trust you have for the person making the referral.
c. retain the lawyer regardless of their area of practice.
d. ensure the referral is from a family member rather than a mere friend.
e. ignore the referral as irrelevant.
11. A lawyer referral service
a. will enable a businessperson to retain a lawyer without need for an initial consultation.
b. is an online fee-based service providing guaranteed results.
c. regulates the legal profession in the interest of the public.
d. provides the names and phone numbers of lawyers who practice in a particular area of law.
e. is also known as "Legal Aid".
12. A provincial law society
a. is a self-governing body for lawyers.
b. has as its mandate the provision of free legal services in the public interest.
c. operates primarily to offer low-cost legal advice to members.
d. operates primarily to enhance the commercial interests of its members.
e. is a self-governing body for businesspeople seeking legal advice.
13. Becoming a sophisticated client will
a. ensure that a business person never needs a lawyer.
b. help a business person manage her legal affairs more efficiently and effectively.
c. result in a business person developing a bias against lawyers.
d. relieve a business person from having to conduct legal research.
e. protect a business person from needing legal advice.
14. The Canadian Bar Association is
a. the national society for legal aid services.
b. a professional organization that represents judges and lawyers.
c. focused on enhancing public safety in the liquor distribution industry.
d. an organization responsible for reviewing lawyers' accounts.
e. a disciplinary body for members of the legal profession.
15. When setting up a small business, the best approach to follow is to assume that after the
business has been set up and commences operating,
,Ch 1. Managing Your Legal Affairs
a. the lawyer you chose to assist you in the start-up of the business will continue to represent you.
b. the lawyer you chose to assist you in the start-up of the business will refer you to a different lawyer.
c. a lawyer will no longer be required.
d. you will not need legal advice, as long as you are a sophisticated client.
e. the lawyer you chose to assist you in the start-up of the business will provide free legal services for
the duration of the business's operation.
16. Which of the following is not an advantage to maintaining an ongoing relationship with your lawyer?
a. The lawyer will know and understand you and your business.
b. The lawyer will be able to provide legal advice more efficiently, thereby reducing your legal costs.
c. The lawyer will be able to customize legal advice so it will be even more useful to you.
d. The lawyer will automatically track your business activities so that he or she can provide constant
advice and guidance.
e. The lawyer will be motivated to do even more for the client.
17. Legal fees
a. are always calculated in a single, specified way.
b. should not be discussed with a lawyer until a bill has been prepared.
c. are typically negligible.
d. should be discussed during the initial consultation with the lawyer.
e. are rarely the subject of confusion or misunderstanding.
18. Which of the following statements is correct?
a. It is a popular misconception that legal services can be very costly.
b. Some people don't retain lawyers even when they need them because they are afraid of the cost.
c. All legal matters are billed to clients on an hourly basis.
d. It is considered unprofessional to raise the issue of fees during a consultation with a lawyer.
e. Lawyers should always be retained, regardless of the cost.
19. Contingency fee agreements
a. are typically used for real estate purchases, the drafting of wills, and incorporations.
b. are not subject to any restrictions.
c. are synonymous with retainer agreements.
d. may result in a lawyer not receiving any legal fees for the work done on a file.
e. must be prepared for all lawyer-client relationships.
20. Which of the following statements regarding provincial law societies is false?
a. Provincial law societies may restrict the use of contingency fee agreements.
b. Provincial law societies may set maximum contingency fees for certain types of cases.
c. Provincial law societies may offer a fee mediation service.
d. Provincial law societies provide online information on lawyers' fees.
e. Provincial law societies provide free legal services to people in need.
21. Typically, lawyers bill their fees on the basis of which of the following?
a. A fixed fee, an hourly rate, or a contingency fee
b. A fixed fee, a pro rata distribution, or a contingency fee
c. A stipend, a pro rate distribution, or an hourly rate
d. A stipend, an hourly rate, or a contingency fee
e. A fixed fee, a stipend, or a pro rata distribution
, Ch 1. Managing Your Legal Affairs
22. Which of the following statements regarding retainers is false?
a. Before commencing work on a matter for a new client, a lawyer usually requests that a retainer be
paid.
b. Provincial law societies typically restrict the use of retainers to personal injury or product liability
cases.
c. A retainer is deposited into a trust account to the credit of the client.
d. The lawyer may require the client to "top up" the retainer as funds are withdrawn from the trust
account to pay legal bills.
e. A retainer helps ensure that lawyers will be paid for their legal services.
23. A retainer
a. works to secure the release of an arrested person.
b. refers to the costs incurred by a lawyer on a client's behalf.
c. is the amount a lawyer will receive when charging based on a contingency fee agreement.
d. works as a deposit.
e. is the amount a client must pay that is in addition to regular legal fees and disbursements.
24. Having a good lawyer on your team is
a. usually too expensive to be worthwhile.
b. only necessary for large companies.
c. a good alternative to becoming a sophisticated client.
d. a legal requirement prior to incorporating a business.
e. a critical component of being a sophisticated client.
25. Legal aid is
a. universally available, regardless of subject matter or financial need.
b. available to anyone who can demonstrate financial need, regardless of subject matter.
c. available exclusively for criminal law issues, subject to demonstrated financial need.
d. only available for business law issues.
e. available subject to substantive and financial eligibility requirements.
26. Which of the following statements is most accurate?
a. If you have a legal problem and cannot afford a lawyer, you may be eligible for legal aid.
b. If you have a legal problem and cannot afford a lawyer, one will be provided for you.
c. If you qualify for legal aid, you will automatically be exempt from all legal costs.
d. Everyone qualifies for legal aid.
e. Everyone can afford a lawyer.
27. If you collect money as a result of a settlement or judgment obtained through the
assistance of legal aid, you will
a. probably have to repay some or all of the legal aid benefits you received.
b. probably be ineligible to enforce the settlement or judgment if the debtor refuses to pay.
c. probably be able to keep the full amount of the settlement of judgment.
d. be required to turn the amount of the settlement or judgment over to legal aid.
e. be required to turn the amount of the settlement or judgment over to the court.
28. A small business owner
a. is wise to obtain legal aid for business matters rather than having to incur legal costs.
b. is automatically entitled to legal aid assistance.
c. is usually not able to receive legal aid with respect to the type of legal issues involving the business.
d. should always use duty counsel rather than having to retain a lawyer.
e. should retain duty counsel to draft contracts outlining legal duties.
