REPEAT

Question 1

Remuneration

Answer 1

obligation to pay as per K or as per reasonable fees of industry

Question 2

What does Arthur Wishart Act (Franchise Disclosure) talk about?

Answer 2

governs franchise relationships, ensuring fairness and transparency between franchisors and franchisees.
Disclosure / Fair Dealing / Right to Associate

Question 3

Disclosure Obligations

Answer 3

Franchisors must provide prospective franchisees with a Disclosure Document at least 14 days before signing the franchise agreement or receiving payment.

Question 4

Employees’ Duties

Answer 4

Duty to obey (insubordination)
Duty to exercise skill and care
Duty of good faith and fidelity (while employed)

Question 5

Ways to Terminate an Employment Contract

Answer 5

By Notice: Either the employer or employee provides notice to end the relationship.

By Agreement: Both parties mutually agree to terminate the contract.

Frustration of Contract

Dismissal for Cause: The employer terminates the contract without notice due to serious misconduct or incompetence.

Question 6

When can you dismiss for cause?

Answer 6

Insubordination
Misconduct: Crimes/Bad Behaviour
Gross incompetence
Harassment or violence
Where reputation of employer is affected
Causes direct financial loss

Question 7

Wallace v. United Grain Growers Ltd. [1997] 3 S.C.R. 313

Answer 7

If an employer:
wrongfully dismisses and
Engages in high-handed or malicious conduct; and/or
Commits an independent actionable wrong during the dismissal process;

Then the court may:
Extend the notice period (Wallace damages).
Award damages for mental distress or punitive damages.

Question 8

Termination of Partnership

Answer 8

• Termination by Notice or Expiry
• Termination on Death or Insolvency
• Dissolution by Law: mentally incompetence, permanently incapable, guilty of conduct that can negatively affect business, breaches agreement, or just and equitable.

Question 9

Limitations on Limited Liability of Corporations

Answer 9

a) Improperly Paid Dividends:
* Directors may be held personally liable if dividends are paid when the corporation is insolvent or would become insolvent as a result.

b) Bankruptcy and Insolvency Act:
* Under insolvency law, directors and officers can be personally liable for unpaid wages, taxes, or breaches of fiduciary duties.

c) Lifting the Corporate Veil:
* Courts can disregard the separate personality of the corporation in cases of fraud, wrongdoing, or misuse of the corporate structure.
o Example: A director uses the corporation as a shield to defraud creditors.

Question 10

A director can be personally liable if:

Answer 10

• If a director acquiesces in situations of misconduct or negligence
• If a director votes for a decision that is financially detrimental to the corp. & the corp. becomes insolvent (for employees unpaid wages)
• If taxes are not paid (HST, and employee deductions)

Question 11

Defences for Duties of Care and Skill torts (Directors)

Answer 11

• Due diligence: Acted diligently and Relied on audited financial statements
• Business Judgment Rule

Question 12

Oppression Remedy

Answer 12

Plaintiff must show that the action complained of:
* Has been oppressive or unfairly prejudicial; or
* Unfairly disregards the interests of the complainant

Remedy is usually to have corporation buy back the complainant’s shares at fair market value

Question 13

Derivative Action

Answer 13

The shareholder must obtain leave (permission) and show:
1. The directors won’t take action themselves.
2. The shareholder is acting in good faith
3. The action is in the best interest of the corporation or its shareholders.

The court may:
- Order the corporation to cover the shareholder’s legal costs.
- Direct that any damages won from the lawsuit be paid to the shareholders instead of the corporation.