LAW 122
PRACTICE TEST
WEEK 5
QUESTION 1:
The Province of Ontario passes the Banking Fairness Act, which:

Caps the interest rates banks may charge on loans within the province.

Requires all banks to register with a provincial regulator and pay licensing
fees.

Imposes penalties, including suspension of banking licences, for noncompliance.
Meanwhile, the federal Parliament, under the Bank Act, already:

Establishes a licensing scheme for banks at the national level.

Sets its own rules on permissible interest rates and lending practices.

Provides for federal penalties (including suspension or revocation of federal
licences) if banks fail to comply.
A major Canadian bank challenges the provincial law. As counsel for the bank,
how would you legally justify your client’s argument in order to win the case?
QUESTION 2:
ABC Ltd. is hired to repair the roof of a downtown office building. The company
sets up scaffolding, but in doing so the workers place heavy equipment in the
fenced parking lot of a neighbouring business without asking permission. To speed
up their work, a worker cuts through the neighbour’s storage shed (located on the
neighbour’s property) to access the roof more quickly.
Explain which party is liable in this case and the legal principles that govern their
liability.
QUESTION 3:
AAA Inc. operates a dry cleaning plant in Toronto. As part of its operations, it
stores several large tanks of toxic cleaning chemicals on its property. The tanks are
properly sealed and maintained, but one day a valve malfunctions, and thousands
of litres of chemicals leak onto a neighbouring property.
The chemicals seep into the soil of a community garden run by local residents,
killing the plants and making the land unusable for several years.
They also flow into a nearby creek, killing fish and contaminating water that a
local business uses for its boating operations.
AAA Inc. argues that the valve defect was unforeseeable and that it had complied
with all safety regulations.
You are representing the local residents and businesses. What are your legal
arguments for your clients to win this case?
QUESTION 4:
XMart is a busy grocery store in Toronto. One Saturday afternoon, a jar of olive oil
spills in Aisle 4. No employee notices or cleans it up for over 45 minutes. While
shopping, Ms. Y slips on the oil, falls, and fractures her wrist. As she falls, she
grabs a shelf, which collapses due to loose screws. Several items crash down,
cutting another customer, Mr. Z, on the head. XMart argues that it posted a general
“Caution: Floor May Be Wet” sign at the entrance, and that it cannot prevent every
accident.
Explain the legal liabilities in this case.
QUESTION 5:
What are the differences between ‘Tort Law’ and ‘Contract Law’, and provide an
example for each.
QUESTION 6:
A owes B $30,000. B sends a demand letter to A, officially requesting repayment.
A refuses to pay. B decides to sue A and comes to your office for legal advice.
Both A and B reside in Ontario. B has also come across a decision of the British
Columbia Court of Appeal that may be unfavorable to his case.
Advise B on:
1. Which court in Ontario he can initiate the claim in;
2. The possible appeal routes up to the final court; and
3. Whether he should be concerned about the decision of the BC Court of
Appeal.