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