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Humber College Exam 4: Invigilated Theory Sample Questions:

1. In a commercial transaction, which of the following is NOT a responsibility of the lawyer?

A) Remedy of title issues
B) Review of the Agreement of Purchase and Sale
C) Review of financial statements
D) Exchange of legal documents

2. A salesperson has a buyer client in the metal fabrication industry, which requires outdoor storage and involves substantial noise and smells. The salesperson sees a listing that says "24,000-square-foot light industrial property, multi-uses permitted." Is this a suitable property for their client? Why or why not?

A) Yes, the property will be suitable if the client states they will change the zoning to allow their type and classification of business to operate at this location.
B) Yes, the property is suitable, as the listing says the property is light industrial and multi-uses are permitted.
C) No, the property is not suitable, as the client's business type and classification require heavy industrial zoning.
D) Yes, the property is suitable since the client is already in the metal fabrication business, and does not need to get any permits from the municipality prior to moving in and using the property.

3. In regard to the adjusted book value/asset valuation method of valuing a business, which of the following is correct?

A) The adjusted book value method should not be used when the sale of a business is being implemented or is under consideration.
B) A company's adjusted book value is entirely unrelated to its net worth.
C) The adjusted book value method takes goodwill into account when establishing the value of a business.
D) A company's adjusted book value should be equal to the actual market value of the business.

4. The key mechanical components of commercial buildings include heating, cooling, and electrical systems.
Which of the following tasks is NOT usually completed by the salesperson?

A) Contacting contractors for quotes for repairing or replacing equipment.
B) Ensuring inspections are being carried out as required.
C) Reviewing whether the technical components have been recently replaced or upgraded.
D) Learning what types of equipment are in the building and having a general understanding of their age and condition.

5. A buyer is in the process of closing a transaction when a tornado causes damage to the property. The necessary repairs may extend past the closing date. Which of the following may be used to resolve this problem?

A) Change the completion date by using an amendment to the agreement of purchase and sale.
B) Change the completion date by using a notice of fulfillment.
C) Change the completion date by using a waiver.
D) A change is not necessary because the damage is out of the control of the buyer or the seller.

Solutions: