EIT PPE Webinar March 18 & 20, 2014

EIT SEMINAR
March 18 & 20, 2014

KEYS TO SUCCESS
Grant Boundy, P.Eng. , FEC
Table of Contents
Part A
Basics to Know Question 1 Part A (Key Words) ....................................................................................... 1
August 10, 2013 Professional Practice Exam - Part A - Professional Practice and Ethics............................... 2
Study Guide August 10, 2013 - Part A ............................................................................................................ 6
April 13, 2013 Professional Practice Exam - Part A - Professional Practice and Ethics ................................. 9
Study Guide April 13, 2013 - Part A .............................................................................................................. 13
Part B
Basics to Know - Question 1- Part B (Key Words) ........................................................................................ 17
August 10, 2013 Professional Practice Exam - Part B - Engineering Law and Professional Liability ............ 18
Study Guide August 10, 2013 Part B .......................................................................................................... 23
April 13, 2013 Professional Practice Exam - Part B - Engineering Law and Professional Liability ................ 27
Study Guide April 13, 2013 Part B ............................................................................................................. 31
Professional Practice Exam

Part "A" Question 1
Basics to Know - 'key words' format
For the section references below, 'A' means Professional Engineers Act (PE Act), and 'R' means
Ontario Regulation 941 (O. Reg. 941). Please refer to these sections for more comprehensive information.
th
Definition: practice of professional engineering - actions, principles, safeguards
A 1. (13 item)
PEO:
A 2.(3)
A 2.(4)
- principal object - regulate the practice, to serve and protect the public interest
- additional objects - knowledge, practice standards, ethics, public awareness, other
PEO Main Functions:

enforce requirements for licences and Certificates of Authorization (C of A)
under authority of the PE Act - penalties for offences are in A 40.
issue licences and C of As - a C of A is a permit to offer services
receive complaints re conduct or technical competency - discipline, if referred
PEO organization and processes: Council, Committees - regulate the practice
A 12.(1), A 12.(2)
A 14., A 15., A 18
A 24., A 28
A 3., A 10., A 12., A40.
Requirements / conditions for:

P.Eng. licence: 18 years, academics, experience 48 mos 12 Cdn, PPE, good character A 14.(1), R 33
Provisional licence: all of A 14.(1) except experience, valid 12 mos.
A 14.(7), A 18.(1), R 44.1.(1)
Temporary: specific work/client, P.Eng. collaborator, 12 mos., qualifications
A 18.(1), R 42., R 43., R 44.
Limited licence (LL): specific services, tech. diplm, 13 yrs exper, PPE, good char
A 18.(1), R 45., R 46.
Certificate of Authorization: P.Eng(s) responsible, 5 yrs after degree
Consulting Engineer: P.Eng., + 5 yrs, 2 yrs independent practice, 5 yrs valid
Liability insurance, conditions for a C of A - insurance limits / conditions
Engineers Seal - sign, date and seal documents - charges for misconduct
A 15., A 17., R 47., R48., R49

R 56., R 57., R 59., R60.
R 47.3., R 74.
R 53., R 72.(2)(e)
Penalties for enforcement offences - when no licences or C of As.

A 40.(1), A 40.(2), A 40.(3)
Complaints committee - consider and investigate, may act or otherwise refer
A 24.(1), A 24. (2)
Discipline committee - hear and determine allegations, impose penalties
A 28.
Fees Mediation committee - fee disputes; mediate, or arbitrate with consent
A 32.
Conflict of interest - must be disclosed, (5 conditions) if disclosed then not misconduct
72.(2)(i)
Work other than employer - no conflict, status as employee, limits, inform employer
R 77.5.
Advertising - professional, factual, without criticism, without seal reference
R 75.
Code of 'misconduct', R72. - could lose licence but not for 'ethics', R 77.
R 72.(2)(g)
Competence - depends on judgment of individual practitioner, good character
EIT Seminar March 18 & 20, 2014
KEYS TO SUCCESS
R 72.(2)(h), R 77.1.v.
Page 1
ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONTARIO

PROFESSIONAL PRACTICE EXAMINATION August 10, 2013
PART A Professional Practice and Ethics
This examination comes in two parts (Part A and Part B). Both parts must be
completed in this sitting. You will be given a total of 180 minutes to complete the
examination.
Use the correct colour-coded Answer Book for each part, place in the correct envelope and
seal after completed.
White Answer Book for Part A white question paper.
Coloured Answer Book for Part B coloured question paper.
This is a CLOSED BOOK examination. No aids are permitted other than the excerpts
from the 1990 Ontario Regulation 941 covering sections 72 (Professional Misconduct) and
77 (Code of Ethics) supplied at the examination. Dictionaries are not permitted.
The marking of questions will be based not only on academic content, but also on legibility
and the ability to express yourself clearly and correctly in the English language. If you
have any doubt about the meaning of a question, please state clearly how you have
interpreted the question.
All four questions constitute a complete paper for Part A. Each of the four questions is
worth 25 marks.
WHERE A QUESTION ASKS IF A CERTAIN ACTION BY AN ENGINEER WAS
ETHICAL OR NOT, A SIMPLE YES OR NO ANSWER IS NOT SUFFICIENT.
YOU ARE EXPECTED TO COMMENT ON AND DISCUSS THE ACTION OF
THE DIFFERENT INDIVIDUALS AND/OR ORGANIZATIONS INVOLVED IN
EACH SITUATION AS IF YOU WERE PERSONALLY INVOLVED.
You should identify where applicable the appropriate clauses in Regulation 941. SIMPLE
REFERENCE TO THE APPROPRIATE CLAUSES WITHOUT A DISCUSSION
OF HOW THE CLAUSE APPLIES IN THE SITUATION DESCRIBED IS NOT
SUFFICIENT.
EIT Seminar March 18 and 20, 2014
KEYS TO SUCCESS
Page 2

Part A Professional Practice and Ethics
Question 1
(5)
(5)
(5)
(5)
(5)
(a) What is the Complaints Committee? Describe its function.

(b) PEO issues Temporary licences. In addition to paying the necessary fee, the applicant
must meet one of three other requirements to obtain such a licence. Please briefly give
two of those requirements for obtaining this license.
(c) Where a licence, certificate of authorization, temporary licence, provisional licence or
limited licence is revoked or cancelled what should the holder do with the certificate
and seal?
(d) Which licence holders can hold a Certificate of Authorization?
(e) What are the consequences, if any, to a professional engineer who does not keep his or
her licence permanently displayed in his or her place of business?

Question 2
Sigma is a licensed professional engineer charged with enhancing the efficiency of a

liquid detergent production line for his employer, SoftSoap, a soap manufacturer. During
his work he has access to confidential company information and observes that the
company is adding very small quantities of a well-known carcinogen (i.e. a substance
suspected of causing cancer) to the detergent but is not listing it as an ingredient. This
confidential information is irrelevant to Sigmas work. However, Sigma is aware that the
additive is a banned substance.
The production process is handled by Tau, a P.Eng. in another department of SoftSoap.
Sigma is reluctant to bring the matter to Tau since they have had some recent
disagreements. Sigma has been receiving e-mails forwarded from Tau with jokes of a
racially insensitive nature. More often than not, the jokes are aimed at Sigmas race and
are also sent to other members of Sigmas department. Sigma, had become offended by
these e-mails and decided to speak with Tau one-on-one last week to explain how the emails are affecting him. Sigma told Tau that not only are the e-mails offensive to him,
but they are not appropriate for the work environment in general. Tau shrugged off
Sigmas concerns telling him that no harm was intended and they were only for a good
laugh. Tau also said that everybody else in your department enjoys them and nobody
else ever gets offended. This week Sigma received another e-mail forwarded from Tau
with a series of jokes about Sigmas race.
KEYS TO SUCCESS
Page 3

Using PEOs Code of Ethics and Code of Professional Misconduct as your guide:
(15)
(a) Discuss what action(s) Sigma is obligated to take as a professional engineer?
(10)
(b) Discuss Tau`s actions and what should Sigma consider doing about them?
Question 3
You are a professional engineer and have been hired recently as the chief operations and
maintenance engineer of a paper mill near a remote village in northern Ontario. The mill
is the largest industry in the area and employs (directly or indirectly) most of the workers
in the region.
Upon starting your new job, you review the facilities at the mill and its operation and
maintenance procedures. You discover that your predecessor (also a professional
engineer) had been operating the mill for several years with inadequate environmental
equipment. The mill has been discharging hazardous substances into a nearby river
contrary to legal limits. You also learn that government authorities are not aware of the
illegal discharges.
You discuss the situation with the companys vice president in charge of Canadian
operations. You report to the vice president that a number of environmental measures
would be necessary in order to stop the illegal discharge. In your estimation, the
measures would require a substantial capital investment in the plant. The vice president
informs you that the mill has been earning very small profits in the last decade and that
the capital expenditure could not be justified at this time. According to the vice
president, the companys head office would likely close the mill rather than spend the
money.
Using PEOs Code of Ethics and Code of Professional Misconduct as your guide:
(10)
(a)
Discuss your obligations with respect to the public. What is the public interest in
this case? How is the public interest impacted by your actions?
(10)
(b)
Discuss your obligations with respect to the company.
(5)
(c)
Discuss your obligations with respect to your predecessor.
KEYS TO SUCCESS
Page 4

Question 4
ProTestCo is a products testing company. Typically, ProTestCo is hired by various
manufacturers to perform tests on their products in order to verify that the products are
manufactured according to published standards.
You are a professional engineer and have been employed for several years on a full-time
basis as an employee of ProTestCo. In your job, you are responsible for supervising the
application of tests on various products. During your years of employment with
ProTestCo you have acquired a great deal of expertise regarding the design and
manufacture of small household appliances and have earned an excellent reputation.
Given your reputation and expertise, manufacturers of such appliances are often
interested in hiring you on a private basis (i.e. outside of your employment with
ProTestCo) to provide input on their product designs. You are able to supplement your
income by occasionally undertaking such work for them. You perform this work on
weekends and during evenings.
One day, while at work at ProTestCo, you are assigned the job of supervising the tests
and issuing a report on a new product that has been submitted to ProTestCo. You realize
that the product was submitted by one of your own manufacturing clients and that you
provided design input on the product.
(a)
Comment on the appropriateness of how you have set up your working

arrangement.
(10)
(b)
How should you deal with the testing of the new product?
(5)
(c)
Is a P.Eng. licence sufficient to permit you to provide such design input to your
own manufacturing clients? Explain.
(10)
Use PEOs Code of Ethics and Code of Professional Misconduct as your guide in your
answer and identify any consequences to you.
KEYS TO SUCCESS
Page 5

Study Guide - Part "A"
August 10, 2013
The purpose of Part "A" is to examine a candidate's knowledge of PEO functions (question 1),
and the Misconduct and Ethics Codes (questions 2, 3 & 4) as found in Regulation 941, sections
72. and 77.
These 2 code sections will be supplied at the examination but they should be carefully studied
before the exam. Advance study will facilitate recognition of situations in the questions which
may be matched to the codes, and the notating of exact code numbers and their sub-sections
within the answers.
Answers should be given within about 20 minutes each. During study time, try practice writing,
review and re-writing, to develop a timing skill. Also try answering without aids, even using the
same questions.
This Study Guide may contain more material than would be expected in an answer within 20
minutes.
The references given below are from the PE Act, or Regulation 941 (R 941). These references
are here for study purposes only, and are not anticipated in an answer, except for 72. & 77.
1(a) Complaints Committee, function: to review complaints about a P.Engs professional

practice and to determine if an issue can be resolved, or if it needs to go to the Discipline
Committee, PE Act sect 24.(2)
1(b) Temporary License, requirements: 1) residence outside Ontario; 2) qualifications equal to
Ontario; 3) ten years experience; and, 4) collaboration with an Ontario P.Eng. unless exempt,
Reg. 941 sect's 43. & 44.
1(c) Certificate and seal, when license ceases - should be returned to PEO, Reg. 941 sections
54. & 55.
1(d) Certificate of Authorization (C of A), can be held only by: P.Eng.'s and Temporary Licence
holders, and not by any other licence holders, Reg. 941 section 47.1. and PE Act section 40.(2).
Note: Limited Licences are proposed to be added, but not for this exam, see PE Act sections
15. & 17.
1(e) License not displayed, consequences: None. Endeavouring to display is in Code of Ethics
section 77.2.iv., but a breach of ethics is not misconduct, section 72.(2)(g).
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Page 6
Study Guide - Part "A" - August 10, 2013
2(a) Sigma's obligations:

(1) Out of loyalty to SoftSoap as employer, 77.1.i., Sigma should confer with management
to consider the consequences of adding a carcinogen to the liquid detergent, 72.(2)(f),
and the need to follow legal codes and rules for banned substances, 72.(2)(d), and to
provide for the health of the public, 72.(2)(b).
(2) If no agreement is reached, Sigma should report the situation to public health
authorities, 72.(2)(c).
(3) Although Sigma is obligated to regard an employer's information as confidential, 77.3., a
report must be made, because public welfare is paramount, 77.2.i., and also to show
fidelity to public needs, 77.1.ii.
What happened?
Violatons?
2(b) Tau's actions - making racial jokes constitutes harassment, 72.(1), and violates 72.(2)(n). It
is not showing courtesy and good faith towards another practitioner, 77.7.i. Neither is it fair to
send the jokes to other members of Sigma's department, 77.1.i. Tau's conduct is disgraceful
and unprofessional, 72.(2)(j).
Sigma did the right thing by first speaking with Tau, not just trying to maliciously injure Tau's
reputation, e.g., with other jokes in return, 77.7.iii. But Tau acted incorrectly again and sent
another racist email.
What should happen?
Sigma should review Tau's behavior with management and ask for a transfer, or consider
resigning. Sigma could also complain against Tau, to PEO and to the Ontario Human Rights
Commission, 77.8.
3(a) My obligations to the public - the public interest is to reduce the illegal discharges into the
river so that these are within legal limits, 72.(2)(d), and thereby to safeguard the health of the
people who are being affected, 72.(2)(b). The public interest is also to maintain employment in
the region. I should be sensitive to this interest and act where possible to show fidelity to public
needs, 77.1.ii.
If my actions can control the illegal discharges this will impact the public interest positively and
thereby fulfil my duty to regard the public welfare as paramount, 77.2.i. If the operation can be
saved, this will contribute significantly to safety in the community and to the overall welfare of
the workers in the company, 72.(2)(c). I will also have acted with devotion to high ideals,
77.1.iii.
My estimation of the substantial investment required, should be reviewed with specialists in the
field, to see if a way could be found at less cost to control the discharges. I would also suggest
trying to find investors willing to help upgrade equipment. The object is always to be faithful to
public needs, 77.1.ii.
KEYS TO SUCCESS
Page 7
Study Guide - Part "A" - August 10, 2013
3(b) My obligations to the company - I have taken a correct first step in being loyal to my
employer, by conferring with the vice-president, 77.1.i. Although I have an obligation to keep
company information confidential, 77.3, I have a greater obligation to regard public welfare as
paramount, 77.2.i.
I should report the discharges to the government authorities, 72.(2)(c), and ask for a temporary
stay of legal charges, for failing to comply with applicable regulations, until the matter can be
resolved, 72.(2)(d).
3(c) My obligations to my predecessor - to inform that P.Eng., that the negligence while
operating the paper mill has been discovered, and to give that person a fair opportunity to
respond, 77.1.i. and 77.7.i.
Although I do not wish to injure the reputation of another practitioner, 77.7.iii., I will further
advise if the response is not favourable, I intend to expose the behavior before the proper
tribunals, 77.8., and to proceed with a charge of unprofessional conduct, for the time of
employment at the mill, 72.(2)(j).
If I do not take the actions in 3(a), 3(b) and 3(c), I could be charged with negligence, 72.(2)(a).
4(a) Working arrangement, weekends and evenings (W & E) - this is 'moonlighting'. I should:
1) satisfy myself the outside work will not interfere with my employment at ProTestCo
2) confer with my daytime employer to ensure there is no objection
3) give a written document to the W & E employer about my status as a daytime employee
4) give a written document to the W & E employer about limitations on my outside work,
77.5.
5) recognize if I do not do these things, it is a breach of ethics but is not subject to
discipline, 72.(2)(g).
4(b) New Product, how to test - I should decline this assignment because of a conflict of
interest, which could be construed as prejudicial to my judgment as an employee of ProTestCo,
77.3. and 77.4. To decline would also be fairness and loyalty to the client, 77.1.(i).
Perhaps there is another employee at ProTestCo who could do it. As an option, my supervisor
might oversee the full test with me involved, and be satisfied no conflict of interest has taken
place, 72.(2)(i),
4(c) P.Eng. Licence, is more needed? - a P.Eng. licence by itself is not sufficient since the
outside services are essentially being offered to the public. I should apply for and hold my own
Certificate of Authorization (C of A), PE Act section 12.(2), otherwise I would breach the Act and
be subject to misconduct, 72.(2)(g).
Alternatively, an outside employer may have a C of A and I might perform services under that
C of A as a contract employee. However, it would be better to have my own C of A.
KEYS TO SUCCESS
Page 8

PROFESSIONAL PRACTICE EXAMINATION April 13, 2013
This examination comes in two parts (Part A and Part B). Both parts must be completed
in this sitting. You will be given a total of 180 minutes to complete the examination.
Use the correct colour-coded Answer Book for each part, place in the correct envelope and seal
after completed.
This is a CLOSED BOOK examination. No aids are permitted other than the excerpts from
the 1990 Ontario Regulation 941 covering sections 72 (Professional Misconduct) and 77 (Code
of Ethics) supplied at the examination. Dictionaries are not permitted.
The marking of questions will be based not only on academic content, but also on legibility and
the ability to express yourself clearly and correctly in the English language. If you have any
doubt about the meaning of a question, please state clearly how you have interpreted the
question.
All four questions constitute a complete paper for Part A. Each of the four questions is worth
25 marks.
WHERE A QUESTION ASKS IF A CERTAIN ACTION BY AN ENGINEER WAS
ETHICAL OR NOT, A SIMPLE YES OR NO ANSWER IS NOT SUFFICIENT.
YOU ARE EXPECTED TO COMMENT ON AND DISCUSS THE ACTION OF THE
DIFFERENT INDIVIDUALS AND/OR ORGANIZATIONS INVOLVED IN EACH
SITUATION AS IF YOU WERE PERSONALLY INVOLVED.
You should identify where applicable the appropriate clauses in Regulation 941. SIMPLE
REFERENCE TO THE APPROPRIATE CLAUSES WITHOUT A DISCUSSION OF
HOW THE CLAUSE APPLIES IN THE SITUATION DESCRIBED IS NOT
SUFFICIENT.
KEYS TO SUCCESS
Page 9

Question 1
(5)
(a) PEO's Discipline Committee has the power to revoke or suspend any of the licences
issued by PEO if the licence holder commits professional misconduct. Besides
revocation and suspension, describe three (3) other penalties or sanctions that the
discipline committee may impose.
(5)
(b) What are the limits of the Temporary License? (In your answer, DO NOT
discuss the qualifications/requirements for obtaining this license.)
(5)
(c) PEO allows the use of electronic seals on electronic documents. Briefly discuss the
steps that a P.Eng. should take when allowing the electronic use of his/her seal.
(5)
(d) PEO issues both a Certificate of Authorization and a Consulting Engineering Title.
Briefly explain the purpose of each.
(5)
(e) What is the professional engineers primary obligation?

Question 2
Same as August 2008
Alpha is a P.Eng. employed by EngInc, an engineering company. As Chief Project

Engineer, Alpha is in charge of a project for BigGuy, an important client of EngInc.
BigGuy and Alpha have several disagreements over the design that Alpha has developed.
BigGuy wants a cheaper, more conventional solution. Alpha is convinced that the design
is a "masterpiece" and believes that BigGuy "doesn't have an ounce of imagination".
Alpha simply shrugs off BigGuy and refuses to discuss any other alternative.
BigGuy is furious and phones Beta, P.Eng., the President of EngInc, to yell and complain
about Alpha. BigGuy threatens to hire another engineering firm to complete the design
according to BigGuys wishes.
You work for EngInc as an intermediate design engineer. Beta calls you into a private
office and closes the door. Beta asks you to review Alpha's design and instructs you to
keep the review a secret from Alpha. Beta explains that Alpha is a senior engineer who has
been with EngInc for 28 years and could be "a bit sensitive at times".
(15) (a) What do you tell Beta? Discuss.
(10) (b) Please comment on Alpha's conduct in dealing with BigGuy.
How should Alpha have responded to BigGuys request?
Use the Codes of Ethics and Professional Misconduct as your guides
KEYS TO SUCCESS
Page 10

Question 3
Omega, a P.Eng with many years of experience and a valid Certificate of Authorization
was hired by ABC to design a fire protection system for a new building and supervise
its installation. Omega produced the design and gave signed, sealed and dated copies
of the final design to Theta (P.Eng) of Faultless to install. Faultless is a contractor
hired by ABC and Theta is their project manager.
Once the installation was complete, Omega provided the city with a sealed, signed and
dated report affirming that the fire protection system had been installed as designed and
that it met all codes and standards. Omega had not checked the installation but had
depended on the assurance by Theta who said that it had been installed as designed.
Omega had worked with Theta and Faultless for many years and was very confident
about their work.
Three months later the city conducted a building review and found 20 deficiencies in
the as-built work. They issued a letter to Omega requesting that the construction be
fixed to comply with the design and standards. Omega forwarded the letter to Theta
and asked her to make the necessary changes. Theta made some modifications and
informed Omega a few weeks later that all the changes had been made. Omega then
sent the city another sealed, signed and dated report affirming that the fire protection
system had been installed as designed and that it met all codes and standards.
A second building inspection by the city found that a number of significant deficiencies
still remained.
Using the codes of ethics and professional misconduct as your guide:
(15) (a) Discuss the conduct of Omega and identify any consequences he might face.
(10) (b) Discuss the conduct of Theta and identify any consequences she might face.
Question 4
Turbco is a company that manufactures turbines for power generating plants. Turbco
recently signed a contract with an independent power producer, PowerCo. According
to the contract, Turbco agreed to supply a turbine for a new power plant owned by
PowerCo. Turbco guaranteed in the contract that the turbine would produce electricity
at a rate of 100 megawatts. In addition to supplying the turbine, Turbcos contractual
responsibilities included providing technical advice and on-site support during the
start-up, testing and commissioning of the turbine.
KEYS TO SUCCESS
Page 11

PowerCo hired MechCo, a separate construction contractor, to construct the power

plant, including installing the turbine supplied by Turbco. MechCo installed the
turbine and the construction of the power plant is now almost complete. The contractor
is now ready to commission the plant by running a number of tests to make sure that
the turbine is working properly and producing the power at the guaranteed rate.
Turbco sent one of its employees, Juno, to the site to witness the tests and to provide
technical advice to assist MechCo during the testing. Juno is a very experienced
professional engineer and has worked on many different construction sites over the
years. Soon after arriving at the site, it became apparent to Juno that MechCo was
carrying out its work in an unsafe manner. Many of MechCos workers were working
without hardhats, eye protection or safety shoes. In fact, Juno learned that MechCo
had not established any safety procedures for its crew.
MechCo completed the tests. During the testing, however, Juno noticed that MechCos
personnel did not conduct the tests in complete compliance with the official testing
procedures that were established for the project. According to the tests that were
actually carried out, it seemed that the turbine achieved the guaranteed rate of
performance. In reality, however, the turbine only produced power at 98 megawatts.
Juno realized that had the tests been conducted properly, they would have revealed the
turbines deficient power output. Juno was concerned that Turbco would be required
under its contract to pay PowerCo liquidated damages as a result of the power
deficiency. Juno did not say anything to anyone about the improper testing procedure.
No one else noticed that the tests were not performed properly.
(15)
(a) What, if any, duties does Juno have under the code of ethics and the definition of
professional misconduct regarding the potential dangers to MechCos workers?
Explain whether it matters to Junos duties that the unsafe practices involved work
that was not relevant to the services that Turbco was hired to perform and whether
it matters to Juno duties that MechCo agreed to have overall responsibility for site
safety?
(10)
(b) Comment on Junos obligations, if any, under the code of ethics and the definition
of professional misconduct regarding the test procedure and the failure of the
turbine to perform at the guaranteed rate. In your answer assume that the improper
testing and deficient power output create no safety risks or other dangerous
situation.
KEYS TO SUCCESS
Page 12

Study Guide - Part "A"
April 13, 2013
The purpose of Part "A" is to examine a candidate's knowledge about PEO functions (question
1) and the Misconduct and Ethics Codes (questions 2, 3 & 4) found in Regulation 941, sections
72. & 77.
These 2 code sections will be supplied at the examination but they should be carefully studied
before the exam. Advance study will facilitate recognition of situations in the questions which
may be matched to the codes, and the notating of exact code numbers and their sub-sections.
Answers should be given within about 20 minutes each. During study time, try practice writing,
review and re-writing, to develop a timing skill. Then try answering without aids, even using the
same questions.
This Study Guide may contain more material than would be possible to answer within 20
minutes.
The references given below are from the PE Act or Regulation 941 (R 941) or PEO publications.
These references are here for study purposes only, and are not anticipated in an answer,
except for 72. & 77.
1(a) Discipline Committee, 3 other penalties, e.g., to require - 1) limits on practice 2) complete
specific studies 3) practice only under supervision; - or, any of '9 other' penalties, PE Act,
section 28.(4).
1(b) Temporary licence (TL) limits - a) specific services; b) specific client; c) collaboration with a
P.Eng., unless the TL is exempt, and d) valid up to 12 months, Reg. 941 sections 42. and 44.
1(c) Electronic seals, steps in using: 1) password protect and/or encrypt a sealed document
2) record and update all document locations 3) protect the electronic facsimile of seal and
signature from being copied or altered 4) have a revision process that ensures authenticity and
5) delete when finished use.
More detail is in PEO publication, Practice Guideline for Use of Professional Engineer's Seal,
section 7.3.
1(d) Purposes of - Certificate of Authorization - to act as a business licence, PE Act 12.(2), and
to name the licence holders who will assume responsibility for engineering services, Reg. 941
section 47.; and Consulting Engineering Title, to identify P.Engs who have qualifications beyond
P.Eng., Reg. 941 sec 56.
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Page 13
Study Guide - Part "A" - April 13, 2013
1(e) P.Eng. primary obligation - to serve and protect the public interest, PE Act 2.(3), i.e., to
undertake work with competence, 72.(2)(h) and 77.1.v., and to regard the public welfare as
paramount, 77.2.i.
2(a) What to tell Beta - if I act as instructed, I would be in breach of the code of ethics, reviewing
anothers work without their knowledge, section 77.7.ii. However, I should be loyal to Beta as
my employer, 77.1.i., and keep business affairs confidential, 77.3. I should also act with
courtesy and good faith toward Alpha, P.Eng., as another practitioner, 77.7.i. In any case, a
breach of the code of ethics is not a breach of the code of conduct, 72.(2)(g). Conduct we must
do, ethics we should do.
I will choose the 'least evil'. I will follow Beta's instructions and look for cost reductions in
Alpha's design as desired by BigGuy. As a first priority, any design that is used must safeguard
life, health or property, 72.(2)(b), and comply with all codes and rules, 72.(2)(d). Failure to be
compliant will be taken as negligence, 72.(2)(a). If Beta is a P.Eng. and does not support
compliance with safety, this is unprofessional, 72.(2)(j). I should expose this conduct before the
proper tribunals at PEO, 77.8.
It is not my intention to injure the reputation of Alpha as another practitioner, 77.7.iii. but rather
to act with overall devotion to high ideals of personal honour and professional integrity, 77.1.iii.
2(b) Alpha's conduct with BigGuy - was short-sighted and being unfair in dealing with a client,
77.1.i. Alpha should have responded with diplomacy and explained the benefits of the design.
Alpha could also consider including some of BigGuys wants within Alpha's masterpiece
design, as long as the result is safe, 72.(2)(b). The design should regard public welfare as
paramount, 77.2.i.
Alpha should explain to Big Guy, the negative consequences of a cheaper and more
conventional solution, 72.(2)(f). If BigGuy does not respond in a positive way, and happens to
be a PEng., this should be reported to the proper tribunals, 77.8., and BigGuy charged with
unprofessional conduct, 72.(2)(j).
3(a) Omega's conduct and consequences - Omega was incompetent because of depending
entirely on an 'assurance' by a person, even a PEng. Omega signed a report that the system
had been correctly installed but did not actually check the installation, 72.(2)(e). This act of
omission is not professional competence, 77.1.v., nor devotion to high ideals, 77.1.iii. Based on
the city's reviews, all applicable codes and rules were not followed, 72.(2)(d), and the fire
protection system is clearly not safeguarding life or property, 72.(2)(b).
The same mistake was made a second time when after supposedly fixing 20 deficiencies, there
were still remaining significant deficiencies. This is not fidelity to public needs, 77.1.ii. and
Omega has ignored a duty to public welfare, 77.2.i. As a consequence, Omega should be
charged with negligence, 72.(2)(a) and with conduct that could reasonably be regarded as
unprofessional, 72.(2)(j).
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Study Guide - Part "A" - April 13, 2013
3(b) Theta's conduct and consequences - based on the deficiencies found, Theta's assurance
the installation had been installed as designed, was not correct. Even making modifications and
informing Omega a few weeks later the changes had been made, turned out to be not correct.
The faulty fire protection system does not regard the welfare of the public as paramount, 77.2.i.
As a consequence, Theta should be charged with negligence 72.(2)(a) and with dishonourable
conduct, 72.(2)(j).
4(a) Juno's duties re safety - Juno must try to ensure reasonable provision for the safety of
workers, 72.(2)(b), and to ensure applicable safety codes are followed, 72.(2)(d). It does not
matter that unsafe practices are not directly relevant to the contracted services. An engineer's
duty to the public welfare is paramount and workers are members of the public, 77.2.i. It does
not matter if MechCo agreed to have overall responsibility for safety. If an accident happens
and people are hurt, Turbco is implicated and its reputation would suffer. Juno does have a
duty to report on safety deficiencies, 72.(2)(c).
4(b) Juno's obligations re test procedure - Juno must say something to someone, especially to
the supervisor or manager at Turbco. This is a basic loyalty to the employer, 77.1.i., and
devotion to high ideals of integrity, 77.1.iii. Juno should present clearly the consequences of
following an inadequate test procedure, i.e., the liquidated damages and also to the technical
reputation of Turbco, 72.(2)(f).
These actions are required of a reasonable and prudent practitioner, otherwise it is negligence,
72.(2)(a).
If Turbco management fails to disclose the performance problem to PowerCo, this conduct is
unethical, 77.1.i. If Juno's supervisor is a P.Eng, and any other P.Engs are directly involved,
they should all be exposed before the proper tribunals, 77.8., and should be charged with
disgraceful conduct, 72.(2)(j).
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PART B
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Professional Practice Exam - Part "B" Question 1 - Basics to Know - 'key words' format
th
For further information, please see Marston text, 4 Edition, page(s) referenced here
Arbitration & Alternative Dispute Resolution (ADR) - without recourse to courts, it may be binding
Page
Bid shopping - after tenders are closed, an owner attempts to negotiate a lower price with a bidder
131
Civil-law - based on codes of behavior, expected by governing bodies, e.g., used in Quebec
Common-law - or judge-made law, relies on precedents as a basis of predictability in decisions
Contra proferentem, rule of - for clause ambiguity, interpretation is against party that drafted clause
235
33
2
136
Contract 5 elements - offer accepted, mutual intent, consideration, capacity, lawful purpose
79
Contract A - formed for each tender submitted; Contract B - formed on award of 1 contract
121
Contract A, breach - to depart from instructions to bidders, and risk claims about tendering issues
122
Defamation - a false public statement that damages a reputation (written - libel; verbal - slander)
64
Director's fiduciary duty - to act honestly for a corporation and exercise prudent diligence
21
Discoverability concept - when limitation period begins, 2 years on discovery, 15 years from cause
71
Dispute Resolution Board (DRB), purpose - avoid major claims litigation, select before project start
31
Duress - threatened or actual violence to sign a contract, party's will is not free, may be repudiated
110
Duty to mitigate damages - for a breach, a plaintiff must take reasonable steps to minimize loss
149
Employment (workplace) rights - equal treatment, 14 items (google Ontario Human Rights Code)
322
Equitable estoppel a means to obtain an equitable result if a gratuitous promise is not being kept
92
Fiduciary duty an obligation to act honestly for a corporation, and not for personal interest
21
Indirect (or consequential or special) damages - losses beyond control, e.g., interruption of supply
148
Liabilities, breach of contract, who pays for what - fundamental breach, true construction approach
159
Limitation periods - time windows within which a claim must be filed, basic 2 yrs, ultimate 15 yrs
71
Liquidated damages - costs of contractor failure, must be a genuine pre-estimate of probable loss
150
New York Convention - arbitration decisions will be enforced by signing nations (over 135 in 1958)
30
Parol evidence rule - verbal agreements not allowed, except if condition precedent to define terms
136
Repudiation - when one party stops their performance of a contract, the other could claim damages
146
rd
Secret commission - bribe to one party, by a 3 person, to secretly defraud interests of other party
179
Statutory Holdback - % contract price held until after substantial performance, covers project liens
249
Tort principles, potential liabilities - duty of care, breach of that duty, damages from the breach
38
Vicarious liability - employer (with deep pockets) is responsible in liability, for actions of employee
52
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PART B - Engineering Law and Professional Liability
after completed.
question.
All four questions constitute a complete paper for Part B. Each of the four questions is worth
25 marks.
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Page 18

Ok
(25)
1.
Briefly define, explain or answer any five of the following:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Ok
Fraudulent misrepresentation
The difference in dispute resolution through arbitration and through
mediation
Five examples of employment rights to which individuals are entitled under
Ontarios Human Rights Code (list only)
The discoverability concept as it relates to limitation periods
The New York Convention
Dispute resolution board
Secret Commission
Common law
(25) 2. A long-established manufacturing company, XYZ Ltd., contemplating the possibility of a

sale of some of its properties, retained an environmental consulting firm, E Inc., to prepare an
environmental compliance audit.
The Vice-President of E Inc., a professional engineer, responsible for the performance of the
environmental compliance audit, turned the matter over to one of E Inc.s employees who had
only recently become licensed as a professional engineer. However, on the basis of previous
assignments, the Vice-President had been very impressed by the young engineers abilities. The
Vice-President was also aware that an extremely busy schedule would likely limit the amount of
time he himself could spend on the environmental compliance audit and, accordingly, selected
the younger employee engineer in the hope that the young engineers involvement would
decrease the Vice-Presidents supervisory time in connection with the audit.
The employee engineer carried out an environmental compliance audit with respect to each of
the properties identified and E Inc. submitted its reports on each property. Included at the
beginning of each report was the following qualifying statement:
This report was prepared by E Inc. for the account of XYZ Ltd. The material in it reflects E
Inc.s best judgement in light of the information available to it at the time of preparation. Any
use which a third party makes of this report, or any reliance on decisions to be made based on it,
are the responsibility of such third parties. E Inc. accepts no responsibility for damages, if any,
suffered by any third party as a result of decisions made or actions based on this report.
Some time later, XYZ Ltd. sold two of its properties to Acquisitions Inc. In negotiating the sale
with Acquisitions Inc., E Inc.s reports were shown to Acquisitions Inc., but Acquisitions Inc.
had no dealings with E Inc. E Inc. had no knowledge of the sale to Acquisitions Inc. until
approximately four years later when Acquisitions Inc. commenced a lawsuit against E Inc.
Acquisitions Inc. claimed it had commenced the lawsuit in tort against E Inc. because it had
encountered hazardous substances on one of the properties and had subsequently obtained the
opinion of another environmental consulting firm who confirmed that the report in question by E
Inc. contained negligent misstatements which, in the opinion of the second consulting firm, had
resulted from E Inc.s representatives having spent too little time investigating the property for
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Page 19

hazardous substances. Acquisitions Inc. claimed in its lawsuit that E Inc. was aware that the
report might be shown to prospective purchasers and, accordingly, E Inc. should be responsible
for damages arising as a result of reliance by Acquisitions Inc. on the negligent misstatements in
E Inc.s report.
What potential liabilities in tort law arise in this case? In your answer, explain what principles of
tort law are relevant and how each applies to the case. Indicate a likely outcome to the matter.
In your answer indicate if your conclusion would differ if the reports by E Inc. had not contained
the qualifying statement identified above and, if your conclusion would differ, explain why.
(25) 3. An Ontario municipality (the Owner) decided to update and expand its water treatment
facilities. To do so, the Owner invited competitive tenders from contractors for the construction
of the new water treatment facility.
The Owners consultant on the project, a professional engineer, designed the facility and
prepared the Tender Documents to be given to contractors interested in bidding on the project.
Each of the bidders was required to be prequalified and approved by the Owner for participation
in the bidding. The Tender Documents included the Plans and Specifications, the Tendering
Instructions which described the tendering procedure and other requirements to be followed by
the bidders, the Tender Form to be completed by the bidders, the form of written Contract that
the successful contractor would be required to sign after being awarded the contract, and a
number of other documents.
According to the Tendering Instructions, each tender bid as submitted was to remain firm and
irrevocable and open for acceptance by the Owner for a period of 60 days following the last day
for submitting tenders. The Tendering Instructions also provided that all bids were to be
submitted in accordance with the instructions in the Owners Tender Documents and that the
Owner was not obligated to accept the lowest or any tender.
Tenders were submitted by five bidders. All bids were submitted in accordance with the
Owners Tender Documents. The lowest bid was well within the Owners budget.
Within the 60 days specified and before the Owners consultant had made a recommendation to
the Owner as to whom the contract should be awarded, the consultant was called to a meeting
with a prominent member of the Municipal Council who noted that the lowest bidder was not
one of the bidders who were local bidders from within the Municipality. The Councillor
expressed a very strong view that the contract should in fact be awarded to a local bidder. The
Councillor also noted that if one item that had been included in the specifications was deleted
from the bids the result would be that the bid of the lowest local contractor would become the
lowest bid overall and the Councillors preference for awarding the contract to a local
contractor could be satisfied.
There had been no reference in the Tendering Instructions to any preference being shown to local
contractors.
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How should the consultant deal with the political pressure being applied by the Council member?
If the contract is awarded to the lowest local bidder what potential liabilities in contract law may
arise? If the consultant engineer recommends to the Owner that the contract be awarded as the
Councillor suggests what liabilities may arise for the engineer? Please provide your reasons and
analysis.
(25) 4. An information technology firm submitted a bid to design software and hardware for an
electronic technology process to control the operation of a large scale baggage handling and
related security facility for a major airline.
The firms fixed guaranteed maximum price was the lowest bid and the contract was awarded to
it. The contract conditions entitled the information technology firm to terminate the contract if
the airline did not pay monthly progress payments within 15 days following certification that a
progress payment was due. Pursuant to the contract, an independent engineering firm engaged as
contract administrator carried out the certification. The work under the contract was to be
performed over an 8 month period. After commencing work on the project, the information
technology firm determined that it had made significant judgment errors in arriving at its bid
price and that it would face a major loss on the project. Its concern about the anticipated loss
increased further when it also learned that, in comparison with the other bidders, its bid price was
extremely low and that, in winning the bid, by comparison with the other bidders, it had left
more than two million dollars on the table.
Three monthly progress payments were certified as due by the independent engineering firm and
paid by the airline in accordance with the terms of the contract.
However, after the fourth monthly progress payment was certified as due by the independent
engineering firm, the airlines finance department asked the information technology firms
representative on the project for additional information relating to an invoice from a
subcontractor to the information technology firm. The subcontractors invoice comprised a
portion of the fourth progress payment amount. The airlines finance department requested that
the additional information be provided prior to payment of the fourth progress payment.
There was nothing in the signed contract between the information technology firm and the airline
that obligated the information technology firm to provide the additional information on the
invoice from its subcontractor. However, the information technology firms representative did
verbally indicate to the airlines finance department that the additional information would be
provided.
The information technology firm never provided the additional information relating to the
subcontractor's invoice.
Sixteen days after the fourth progress payment had been certified for payment, the information
technology firm notified the airline in writing that it was terminating the contract because the
airline was in default of its obligations to make payments within fifteen days pursuant to the
express wording of the contract.
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Was the information technology firm entitled to terminate the contract in these circumstances?
In giving reasons for your answer, identify and explain the relevant legal principle, its purpose,
how it arises, and how it would apply to the facts.
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Professional Practice Examination

Study Guide - Part "B"
August 10, 2013
The purpose of Part "B" is to examine a knowledge of elementary law as it may apply to an
engineers work experience. Question 1. is definitions with 8 options but requiring answers to
only 5 of the options.
Questions 2., 3. and 4. are case studies. Each answer should include the names of relevant
legal terms and principles, and how each term or principle applies to one or more elements of
the case.
This Study Guide may contain more material than could be given in an answer within 20
minutes.
Page numbers as given below are for the Marston text, 4th edition. Page references are for
study purposes only, and are not anticipated in an answer. Case precedent examples can
benefit an answer.
1.(i) Fraudulent misrepresentation - is a deceptive statement made by a party:

1) knowingly, or 2) without belief in its truth, or 3) careless of whether it is true or false.
The deceived party may rescind the contract, claim compensation for costs and sue for
deceit, page 109.
1.(ii) Dispute resolution - one way is mediation, to resolve a dispute through voluntary
negotiation. Another way is arbitration, where a dispute is resolved by one arbitrator, or board
or panel, and where the determination will bind both parties. The difference is arbitration will be
binding, pages 30 and 239.
1.(iii) Equal entitlement - means employment without discrimination because of (list only 5 of
15 here) race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual
orientation, age, marital status, family status, record of offences, handicap, and without sexual
harassment, page 322.
1.(iv) Discoverability concept - relating to a time limitation period within which any claims
against an engineer or contractor must be filed. The basic limitation period is 2 years from
when a defect is discovered or ought reasonably to have been discovered. The ultimate
limitation period is 15 years from when work was completed, e.g., when a building was built. If a
defect were discovered in the 14th year, filing for action is needed within 1 year. An action not
filed within these periods will be 'statute barred'. Parties to business agreements may specify
periods that are different from the above, pages 71 - 73.
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Study Guide - Part "B" - August 10, 2013
1.(v) New York Convention - an agreement signed by over 135 nations including Canada, that
in case of a dispute, a court of each nation would enforce an arbitration award made in another
signing nation. The agreement was made in 1958 in New York under the auspices of the United
Nations, to minimize the costs of foreign litigation. Foreign work contracts should only be with
signing nations, page 30.
1.(vi) Dispute resolution board (DRB) - a panel to recommend solutions to disputes as these
arise and thereby avoid the expense of litigation. A DRB is formed by the contracting parties
before work begins. A panel of 3 neutral individuals is selected, who have expertise in the
applicable industry, page 31.
1.(vii) Secret Commission - something of value, offered as a bribe or kickback, to a party to a
contract, to secretly defraud another party to the contract. The person offering the secret
commission, or a party accepting the commission, is in violation of the Criminal Code of
Canada, text pages 179 and 180.
1.(viii) Common law - law based on court decisions (precedents) which establish legal
principles. It is 'judge-made' law as opposed to laws passed by legislatures or parliament.
2. Tort, potential liabilities - a suit would be in tort because Acquisitions Inc. (Acq Inc) did not
have a contract with E Inc. The purpose of tort law is to compensate an aggrieved party as far
3. Principles of Tort as money may relieve a loss. All three principles of tort law can be proven relevant here, and
these are:
1. Action is in Tort
2. Purpose of Tort
1) a duty of care
2) a breach of that duty and
3) damage or loss as a result of the breach, text page 32.
4. Principles Relation Tort
principle 1) applies because Acq Inc expected a duty of care from E Inc, even without a
contract.
There had been contracts between XYZ Ltd and E Inc, and between XYZ Ltd and Acq Inc.
Tort principle 2) applies because hazardous substances were found by another environmental
consulting firm, who gave 'expert testimony' as confirmation, thus a duty of care was breached.
Tort principle 3) applies because there was damage and extra expense needed to cover the
losses.
5. Proposed
Compensation
Acq Inc may obtain damages from XYZ in contract, if the clauses cover this but if not
completely, then in tort. If this were the case, XYZ would be sued in tort and in contract.
XYZ and E Inc would be concurrent tortfeasors. As professionals in this technology, E Inc
should have taken more time to look for hazardous substances and to be aware of the potential
and
Recommendation for problems.
6. Concurrent
TortFeasers
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Page 24

8a. Liabilities of
1st (Vicarious
Liability)
A primary area of negligence was the limited amount of time the Vice-president could spend on
the audit. The recently licensed engineer could have asked more questions but in any case the
employer is 'vicariously liable' for the actions of the employee, which assumes the employer has
more ability to pay.
8b. Liabilities of
2nd
Because E Inc had a clear and valid qualifying statement in their reports, they have no liability.
This is a principle established in the case of Hedley Byrne, and in Wolverine Tube vs. Noranda
Metal, page 43.
A related tort case precedent is Unit Farm Concrete vs. Eckerlea Acres, page 46.
3. Contract tender changes, liabilities - the consultant PEng (CPE) should say 'sorry, no' to
the prominent Council member (PCM). The Owner's Tender Documents (OTD) represent an
agreement in the formation of a 'Contract A'. The Contract A concept is from the Ron
Engineering case, page 121.
Any change in treatment of the OTD instructions or specifications, would be a breach of the
Contract A.
Contract A is formed when each bidder submits a bid, and 5 Contract A's have been duly
formed. When the final contract is signed with a bidder, one 'Contract B' is formed.
If a signing were 'outside' the OTD with the lowest local bidder (LLB) then the other 4 bidders
could sue the owner municipality (OM) for breach of their Contract A's. The potential liabilities
could include bid expenses and lost profits. The total expenses to OM, could come in well over
OM's budget.
If CPE does go along with PCM and recommends the award to the LLB, then CPE is open in
turn to a suit by OM for breach of trust and damages. Furthermore, CPE is open to a charge of
misconduct by Professional Engineers Ontario (PEO), Regulation 941, section 72.(2)(j).
An alternative is to reject all bids and issue a revised tender package without the 'limiting item',
and also to clearly state that preference would be shown to local contractors. Then all previous
bidders would be on a level playing field and could decide whether or not to bid. This has the
possible exposure of reducing the number of bidders and the 'local contractor' could come in
with a higher bid than before, especially if confidential information happens to be given to the
local contractor through the PCM.
The PCM must have known well before the preparation of OTD, that water treatment facilities
were to be updated and expanded. Representation to Council, and an agreement on
preference to local bidders, should have been reached well before the preparation of the OTD.
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Page 25
4. Equitable estoppel - the information technology firm (ITF) was not entitled to terminate the
contract. ITF was exposed to significant loss, and was trying to use the default of a 4th payment
from the airline's finance department (AFD) within 15 days of certification, as an excuse to break
the contract.
If ITF insists on the express wording of the contract, AFD could invoke the relevant legal
principle or concept of "promissory" or "equitable estoppel", which is to ensure the result would
be equitable.
A 'gratuitous promise" had been made by the ITF representative to AFD. The promise to AFD
was, to be given additional information relating to an invoice from a subcontractor to ITF, before
AFD would make the 4th progress payment. The contract was not amended, the promise was
not in writing, and it was freely made. This makes the promise "gratuitous". AFD was clearly
depending on the promise.
The contract stays in force and ITF takes the loss. Strict contractual rights are not followed
because equitable estoppel is an 'exceptional remedy' to those rights. Any other result would
be inequitable.
A similar case precedent is Conwest Exploration vs. Letain, page 92.
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after completed.
question.
All four questions constitute a complete paper for Part B. Each of the four questions is worth
25 marks.
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Page 27
PROFESSIONAL PRACTICE EXAMINATION - April 13, 2013

(25)
1.
Briefly define, explain or answer any five of the following:

(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Equitable estoppel
New York Convention
The corporate directors standard of care
Vicarious liability
Secret commission
Dispute resolution board
Parol evidence rule
The discoverability concept as it relates to limitation periods
(25) 2. Live Rail Inc. (Live Rail), a company specializing in the manufacture and
installation of railway commuters systems was awarded a contract by a municipal

government to design and build a transit facility in British Columbia. The contract
specified electrically powered locomotives. As part of the design, Live Rail was
contractually obligated to design an overhead contact system in a tunnel. Live Rail
subcontracted the sub-design of the overhead contact system to a consulting design firm,
Ever Works Limited (Ever works).
Ever Works designed an overhead electrified wire contact system suspended from the
ceiling in the tunnel, however, in doing so it did not carry out any testing, nor did it
gather any data of its own relating to the conditions inside the tunnel. It did not even
request copies of underlying reports, which, had they been examined, would have
indicated that there was a large volume of water percolating through the tunnel rock, and
that the tunnel rock contained substantial amounts of sulphur compounds. The project
documentation that was turned over to Ever Works by Live Rail did not include the
underlying reports, but did identify the existence and availability of the underlying
reports.
The construction of the rail system through the tunnel was completed in accordance with
the Ever Works design. However, within eight months of completion, the overhead
contact system in the tunnel became severely corroded and damaged due to the water
seepage in the tunnel.
As a result of the corrosion damage, the municipality had to spend substantial additional
money on redesigning and rewiring the system.
What potential liabilities in tort law arise in this case? In your answer, explain what
principles of tort law are relevant and how each applies to the case. Indicate a likely
outcome to the matter.
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(25) 3. An Ontario municipality (the Owner) decided to construct a gas-fired power plant. To
do so, the Owner invited competitive tenders from contractors for the construction of the new
gas-fired power plant facility.
The Owners consultant on the project, a professional engineer, designed the facility and
prepared the Tender Documents to be given to contractors interested in bidding on the project.
Each of the bidders was required to be prequalified and approved by the Owner for participation
in the bidding. The Tender Documents included the Plans and Specifications, the Tendering
Instructions which described the tendering procedure and other requirements to be followed by
the bidders, the Tender Form to be completed by the bidders, the form of written Contract that
the successful contractor would be required to sign after being awarded the contract, and a
number of other documents.
According to the Tendering Instructions, each tender bid as submitted was to remain firm and
irrevocable and open for acceptance by the Owner for a period of 60 days following the last day
for submitting tenders. The Tendering Instructions also provided that all bids were to be
submitted in accordance with the instructions in the Owners Tender Documents and that the
Owner was not obligated to accept the lowest or any tender.
Tenders were submitted by five bidders. All bids were submitted in accordance with the
Owners Tender Documents. The lowest bid was well within the Owners budget.
Within the 60 days specified and before the Owners consultant had made a recommendation to
the Owner as to whom the contract should be awarded, the consultant was called to a meeting
with a prominent member of the Municipal Council who noted that the lowest bidder was not
one of the bidders who were local bidders from within the Municipality. The Councillor
expressed a very strong view that the contract should in fact be awarded to a local bidder. The
Councillor also noted that if one item that had been included in the specifications was deleted
from the bids the result would be that the bid of the lowest local contractor would become the
lowest bid overall and the Councillors preference for awarding the contract to a local
contractor could be satisfied.
There had been no reference in the Tendering Instructions to any preference being shown to local
contractors.
How should the consultant deal with the political pressure being applied by the Council member?
If the contract is awarded to the lowest local bidder what potential liabilities in contract law may
arise? If the consultant engineer recommends to the Owner that the contract be awarded as the
Councillor suggests what liabilities may arise for the engineer? Please provide your reasons and
analysis.
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(25) 4. A telecommunications development company leased an outdated and unused

underground pipe system from an Ontario municipality. The developers purpose in leasing the
pipe was to utilize it as an existing conduit system in which to install a fibre optic cable system
to be designed, constructed and operated in the municipality by the telecommunications
developer during the term of the lease. All necessary approvals from regulatory authorities were
obtained with respect to the proposed telecommunications network.
The telecommunications development company then entered into an installation contract with a
contractor. For the contract price of $4,000,000, the contractor undertook to complete the
installation of the cable by a specified completion date. The contract specified that time was of
the essence and that the contract was to be completed by the specified completion date, failing
which the contractor would be responsible for liquidated damages in the amount of $50,000 per
day for each day that elapsed between the specified completion date and the subsequent actual
completion date. The contract also contained a provision limiting the contractors maximum
liability for liquidated damages and for any other claim for damages under the contract to the
maximum amount of $1,000,000.
Due to its failure to properly staff and organize its workforce, the contractor failed to meet the
specified completion date. In addition, during the installation, the contractors inexperienced
workers damaged significant amounts of the fibre optic cable, with the result that the
telecommunications development company, on subsequently discovering the damage, incurred
substantial additional expense in engaging another contractor to replace the damaged cable.
Ultimately, the cost of supplying and installing the replacement cable plus the amount of
liquidated damages for which the original contractor was responsible because of its failure to
meet the specified completion date, totalled $1,800,000.
Explain and discuss what claim the telecommunications development company could make
against the contractor in the circumstances. Explain the approach taken by Canadian courts with
respect to contracts that limit liability and include a brief summary of the development of
relevant case precedents.
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Page 30
Professional Practice Examination

Study Guide - Part "B"
April 13, 2013
The purpose of Part "B" is to examine a knowledge of elementary law as it may apply to an
engineers work experience. Question 1. is definitions with 8 options but requiring answers to
only 5 of the options.
Questions 2., 3. and 4. are case studies. Each answer should include the names of relevant
legal terms and principles, and how each term or principle applies to one or more elements of
the case.
This Study Guide may contain more material than would be possible to answer within 20
minutes.
Page numbers as given below are for the Marston text, 4th edition. Page references are for
study purposes only, and are not anticipated in an answer. Case precedents however, can
benefit an answer.
1. (i) Equitable estoppel - after a contract is underway, if one party makes a 'gratuitous
promise' affecting the terms, e.g., a time limit, and the other party relies on that promise, the first
party cannot later try to renege. As written, the contract will not be enforced, ensuring an
equitable and fair result, page 92.
1. (ii) New York Convention - an agreement under United Nations auspices, signed in 1958 by
over 135 countries, including Canada. They agreed, in cases of contract disputes, that the
courts in each of their countries would enforce any arbitration awards, and thus minimize the
costs of foreign litigation. Parties to contracts should only be from nations that have signed the
New York Convention, page 30.
1. (iii) Director's standard of care - an obligation to act honestly and in good faith for the best
interests of the corporation, and not for personal benefit. Conflicts of interest must be disclosed,
pages 21 and 23.
1. (iv) Vicarious liability - an employer's liability when an employee's work has led to a
damages claim. The employer is presumed to be better able to pay than the employee, i.e., has
'deep pockets', page 52.
1. (v) Secret commission - a payment, bribe, promise or kickback, offered to a party to a
contract, to secretly defraud the interests of the other party. The person offering the secret
commission, or a party accepting the commission, is in violation of the Criminal Code of
Canada, pages 179 and 180.
KEYS TO SUCCESS
Page 31
Study Guide - Part "B" - April 13, 2013
1. (vi) Dispute resolution board (DRB) - a panel to determine solutions as disputes arise and
thereby avoid the expense of court actions. A DRB is formed by the contracting parties before
work starts. A panel of 3 neutral individuals is selected, who have expertise in the applicable
industry, page 31.
1. (vii) Parol evidence rule - verbal agreements are not acceptable to enforce the terms of a
contract. Verbal evidence of an omitted condition may be admitted, providing this condition can
clearly be established as a prerequisite and necessary for the formation of the contract, page
136.
1. (viii) Discoverability concept - any claims against an engineer or contractor must be filed
within a time limitation window. For the basic limitation it is 2 years from when the cause of
action is discovered or ought reasonably to have been discovered. For the ultimate limitation it
is 15 years from completion, e.g., when a building was built. An action not filed within these
periods will be 'statute barred'. Parties to business agreements are entitled to agree on periods
that may differ from the above, pages 71 - 73.
2. Tort, potential liabilities as these arise are; Ever Works (EW) would be liable for the
failure of the contact system, and Live Rail (LR) would be liable for failing to manage the project
to minimize problems.
The suit would be in tort because the municipal government (MG) did not have a contract with
EW.
The purpose of tort law is to compensate an aggrieved party, so far as money may relieve a
loss.
All three principles of tort law can be proven relevant here, and these are:
1) a duty of care
2) a breach of that duty and
3) damage or loss as a result of the breach, text 32.
Tort principle 1) applies because MG could expect a duty of care from EW, even though there
was no contract between them. There were contracts between MG and LR, and between LR
and EW.
Tort principle 2) applies because the contact system failed thus EW breached a duty of care.
Tort principle 3) applies because there was damage and extra expense needed to rectify the
damage.
MG may obtain damages from LR in contract, if the clauses cover this, but if not completely,
then in tort. If this were the case, LR would be sued in tort and in contract.
KEYS TO SUCCESS
Page 32
LR and EW would be concurrent tortfeasors. As professionals in this technology, EW should

have been aware of the potential for corrosion problems. As project manager, LR should have
passed to EW, all the information available. Use of 'expert testimony' may establish the
responsibilities of EW and LR.
A likely outcome is EW would be 80% responsible and LR would be 20% responsible.
A similar case precedent is Unit Farm Concrete vs. Eckerlea Acres, text page 40.
3. Contract tender changes, liabilities - the consultant P.Eng. (CPE) should say 'sorry, no' to
the prominent Council member (PCM). The Owner's Tender Documents (OTD) represent an
agreement in the formation of a 'Contract A'. The Contract A concept is from the Ron
Engineering case, page 121.
Any change in treatment of the OTD instructions or specifications, would be a breach of the
Contract A.
Contract A is formed when each bidder submits a bid, and 5 Contract A's have been duly
formed. When the final contract is signed with a bidder, one 'Contract B' is formed.
If a signing were 'outside' the OTD with the lowest local bidder (LLB), then the other 4 bidders
could sue the owner municipality (OM) for breach of their Contract A's. The potential liabilities
could include bid expenses and lost profits. The total expense, of legal defense by the OM and
damages, could come in well over OM's budget.
If CPE does go along with PCM and recommends the award to the LLB, then CPE is open in
turn to a suit by OM for breach of trust and damages. Furthermore, CPE is open to a charge of
misconduct by Professional Engineers Ontario (PEO), Regulation 941, section 72.(2)(j).
An alternative is to reject all bids and issue a revised tender package, without the 'limiting item'
and also to clearly state that preference would be shown to local contractors. Then all previous
bidders would be on a level playing field and could decide whether or not to bid. This has the
possible exposure of reducing the number of bidders and the 'local contractor' could come in
with a higher bid than before, especially if confidential information happens to be given to the
local contractor through the PCM.
The PCM must have known well before the preparation of OTD, that water treatment facilities
were to be updated and expanded. Representation to Council, and agreement on preference to
local bidders, should have been reached well before the preparation of the OTD.
KEYS TO SUCCESS
Page 33
4. Contract breach, claims enforceability - this case is one of fundamental breach going the
root of a contract and, historically, a clause to limit liability is not normally enforceable.
However, if the wording as expressed or constructed in the liability clause is clear and true, and
the liquidated damage provisions are supported in detail by a genuine pre-estimate of the costs
of a possible breach, then the legal principle of true construction approach is said to have
taken place and the clause is enforceable. This means therefore, that the law has changed in
this area.
The telecommunications development company (TDC) could make a claim of $1,800,000
against the original installation contractor for fundamental breach, to recover the excess costs,
and failure to meet the completion date. However, some Canadian courts have allowed the
enforceability of a liability clause if the wording is clear. Then the recovery would be
$1,000,000. TDC would sustain a loss of $800,000.
Relevant case precedents are Harbutts Plasticene vs. Wayne Tank and Pump where the
clause was not enforceable and Hunter Engineering vs. Syncrude where it was, text pages 155
and 159.
KEYS TO SUCCESS
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Professional Practice Exam

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PowerCo hired MechCo, a separate construction contractor, to construct the power

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Professional Practice Exam

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Study Guide - Part "A" - April 13, 2013

Study Guide - Part "A" - April 13, 2013

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EIT Seminar March 18 and 20, 2014

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Briefly define, explain or answer any five of the following:

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PROFESSIONAL PRACTICE EXAMINATION August 10, 2013

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