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Keys to Success – Webinar

Best Approaches to Writing the Professional Practice
Examination
Study Guides
Grant Boundy, P.Eng., FEC

November 2 and 4, 2015
Table of Contents
Part “A”
Professional Practice and Ethics
Basics to Know – Question 1 – Part “A” (Key Words) ............................................................................. 3

April 11, 2015 Professional Practice Exam - Part “A” ............................................................................. 4
Study Guide April 11, 1015 - Part “A” ...................................................................................................... 8
December 6, 2014 Professional Practice Exam - Part “A” .................................................................... 11
Study Guide December 6, 2014 - Part “A”............................................................................................. 15
Part “B”
Engineering Law and Professional Liability
Basics to Know - Question 1- Part “B” (Key Words) ...............................................................................19

April 11, 2015 Professional Practice Exam - Part “B” .............................................................................20
Study Guide April 11, 2015 – Part “B” .....................................................................................................25
December 6, 2014 Professional Practice Exam - Part “B” .......................................................................28
Study Guide December 6, 2014 – Part “B” ..............................................................................................33
Additional References ................................................................................................................... 36

Professional Practice Exam
Part "A" – Professional Practice and Ethics
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.
Definition: Practice of professional engineering - actions, principles, safeguards A 1. (13th item)
PEO: Principal object: regulate the practice, to serve and protect the public interest A 2.(3)
Additional objects: knowledge, practice standards, ethics, public awareness, other A 2.(4)
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. A 12.(1), A 12.(2)
Issue licences and C of A’s - a C of A is a permit to offer services A 14., A 15., A 18
Receive complaints re conduct or technical competency - discipline, if referred A 24., A 28
PEO organization and processes: Council, Committees - regulate the practice 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 A 15., A 17., R 47., R48., R49
Consulting Engineer – P.Eng. + 5 yrs, 2 yrs independent practice, 5 yrs valid R 56., R 57., R 59., R60.
Liability insurance, conditions for a C of A - insurance limits / conditions R 47.3., R 74.
Engineer’s Seal - sign, date and seal documents - charges for misconduct R 53., R 72.(2)(e)
Penalties for enforcement offences - when no licences or C of A’s. 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 R 72.(2)(h), R 77.1.v.
EIT Seminar – October 27 and 28, 2015 Page 3
ASSOCIATION OF PROFESSIONAL ENGINEERS OF ONTARIO
PROFESSIONAL PRACTICE EXAMINATION – April 11, 2015
PART “A” – Professional Practice and Ethics
You will be given a total of 90 minutes to complete this 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.

Question 1
(5) a) PEO issues both a Certificate of Authorization and a P.Eng. Licence. Briefly explain the
purpose of each.
(5) b) Is a mechanical engineer allowed to perform services that are normally within the scope
of civil engineering? Explain.
(5)
c) Describe the functions of the “Discipline Committee”?
d) PEO issues the following four licences: Professional Engineer, Temporary Licence,
(10)
Limited Licence and Provisional Licence. Which licence holders can take independent
responsibility for engineering work? What limitations are placed on each licence (if
any)?
(In your answer, DO NOT discuss the qualifications/requirements for obtaining this license.)
Question 2
Tau, P.Eng., employed by a large well-known automobile parts testing laboratory, represents
the firm on an international standards advisory committee. Eight members of the ten-person
committee are licensed professional engineers. After an extensive discussion on a standard
at a recent meeting, the committee voted in favour of the new standard. Although Tau was
the only dissenting vote, the committee carefully considered Tau’s reason for objection; and ,
after further discussions, the committee agreed they were unsubstantiated and passed a
motion to accept and publish the standard.
Subsequently, the laboratory where Tau is employed received a contract to test automobile
parts to this standard and Tau was assigned the job of supervising the tests, preparing the
final report indicating that the parts met the standard and signing it on behalf of the firm.
However, Tau is still vehemently opposed to the standard and therefore refuses the
assignment. Tau argues that signing a report attesting to the conformance of the parts to the
standard would suggest endorsement of the standard.
Using PEO's Code of Ethics and Code of Professional Misconduct as your guide.
(10) (a) Is Tau’s argument for refusing the assignment correct? Discuss your reasons.
(10) (b) What action should Tau have taken? Discuss.
(5) (c) Would Tau suffer any consequences from PEO? Discuss.

Question 3
Frey, P.Eng. (a recently licensed geological engineer) was hired by Boring Eng Inc. to act as
assistant project manager on the construction of a pipeline in southern Ontario for Oversight
Energy. She reported to Loki, a very experienced P. Eng, who was the project manager.
Loki was not experienced in geological testing. The pipeline was being constructed by
Trencher Inc. whose work was being directed by Thor who is not a P. Eng. Frey was thrilled
to have been hired for such an important position and to be working under such an
experienced project manager.
The design had been done by Boring who had also been hired to verify the construction on
behalf of Oversight. Part of Frey’s work involved checking the progress payments submitted
by Trencher, verifying them as being within the contract and submitting them to Loki for
approval. Loki’s signature on the payment approval certifies that the costs were in the
original agreement and that the interests of the pipeline were being served.
Almost immediately, Frey began to experience doubts about the project. The soil the
pipeline was going through was very unstable in areas and the design called for deep
trenches. Frey was concerned that not enough geological testing had been done to identify
potential problem areas. She reported her concerns to Loki who told her not to worry her
pretty little head over this since the work had been done by Boring's engineers according to
normal engineering procedures. Frey was still concerned but wondered if it was more from
Loki’s attitude than from a valid concern over the engineering. Shortly after, her fears were
confirmed when several segments of the trench collapsed causing extensive additional work
for Trencher. Fortunately, no workers were hurt.
Trencher submitted a progress payment for approval that included additional substantial
costs for re-digging the collapsed trenches. Frey found that the contract did not have any
mention of removal of this material and refused to sign the progress payment until changes
had been made to the contract. At first Frey’s position was supported by Loki; however, with
mounting pressure by Thor, Loki ordered Frey sign off on the costs and submit it to him for
approval. He told her that, although the costs were not in the original contact, there was
enough money in the budget to cover these costs. Loki said that there was no need to
involve the client and re-negotiate the contract. Frey refused to do so, insisting that it would
be a violation of Oversight's interests which Boring was charged to protect. Loki fired Frey
for not following his specific instructions and signed the progress payment himself.
Using PEO's Code of Ethics and Code of Professional Misconduct as your guide:
(20) (a) Discuss Frey's actions (10), as well as those of Loki (7) and Thor (3), identifying any
consequences each might face.
(5) (b) Is there a recommended recourse that Frey might pursue in view of these actions and her
dismissal?

Question 4
Local Environmental Studies (LESS) was hired by Regressive Properties to conduct a study
on the contamination on a former industrial site that they had purchased and wished to
redevelop into residential properties. LESS held a Certificate of Authorization and the
responsible professional engineer was Zeta P.Eng. who worked part time for LESS as an
employee, usually in the evenings and on weekends. Zeta was a well qualified engineer in
this field with over 15 years of experience. His principle employer, MORE, was not aware of
his employment with LESS and was not in competition with LESS. LESS employed 4
experienced technicians but no other P.Engs. The work of their technicians was normally
directed and reviewed by Zeta who signed all reports.
The report prepared for Regressive was not reviewed or signed by Zeta. LESS gave the
report to Regressive, who then submitted it to the Ministry of the Environment as part of
Regressive’s application for redevelopment. Zeta was not aware of this work or LESS's
action.
The Ministry found that the report contained some serious errors and did not accurately
identify the leaking of PCBs (a known cancer causing material) into a nearby watercourse.
These leakages had been identified in a previous study that had been submitted to the
Ministry by a qualified engineering firm on behalf of the previous owner.
After the report was submitted to Regressive, Zeta reviewed the report and found those
errors. He informed LESS of his findings but did not notify Regressive or the Ministry of
the Environment. LESS also did not notify Regressive or the Ministry of the errors. Neither
Zeta nor LESS attempted to remedy the report or take action to prevent the release of the
PCB’s.
Using PEO's Code of Ethics and Code of Professional Misconduct as your guide:
(10) (a) Discuss the conduct and responsibilities of LESS, giving any consequences.
(10) (b) Discuss the conduct and responsibilities of Zeta, giving any consequences.
(5) (c) What actions should Zeta have taken before entering into the working relationship
with LESS? Discuss.

Study Guide
Professional Practice Examination
Part "A" – April 11, 2015
The purpose of Part "A" is to examine an understanding of PEO functions (Question 1) and of the
Misconduct and Ethics Codes, which are in Regulation 941, sections 72. & 77. (Questions 2, 3 & 4).
Sections 72. & 77. will be supplied at the examination but they should be carefully studied before the
exam. Advance study will facilitate the matching of situations in the questions with situations in the
codes, and the inclusion of exact code numbers and their sub-sections within the written answers.
During study time, try to develop a process in writing and in timing, by practice writing, and review. Any
questions may be reused. Study aids may be used at first, but later writing should be with no aids and
under time pressure. This Study Guide may have more material than could be covered in 20 minutes of
writing.
The references given below are from the PE Act, or from Regulation 941 (R 941). These references are
here for study purposes only, and are not expected in an answer, except for sections 72. & 77.
1 (a) Certificate of Authorization (C of A) and P.Eng. licence - a C of A holder can provide services to the
public. A P.Eng. holder cannot offer services to the public but can engage in engineering work, PE Act 12.
1 (b) Services outside of training - if more training or experience adds new knowledge and ability, then
related services can be offered. To be competent is a professional responsibility, 72.(2)(h) and 77.1.v.
1 (c) Discipline committee (DC) - allegations of professional misconduct or incompetence are sent to DC.
They conduct hearings, evaluate the allegations, and set penalties as needed, PE Act 28.
1 (d) Four licences, independent responsibility and limitations, within the PE Act and Regulation 941 -
o Professional Engineer - can take independent responsibility but is limited by competence, 72.(2)(h.
o Temporary Licence (TL) - can take independent responsibility, within specific limits of TL, R 941 42.
( Note: P.Eng. collaborator is required, unless a TL holder is otherwise qualified, R 941 44.(1).
o Limited Licence - can take independent responsibility, within the limits of services specified, R 941 45.
o Provisional Licence - cannot be independent, is limited to working under a P.Eng., R 941 44.1(2)2.
2 (a) Tau's argument, is it correct? - No. Signing a report does not constitute endorsement of a standard.
Signing a report only attests the parts do comply with the standard as written, 72.(2)(d). Endorsement is
a declaration of approval that the standard is correct and comprehensive, and will serve its purpose,
77.7.v.

Study Guide Part "A" – April 11, 2015  Professional Practice and Ethics
The committee has endorsed and published the standard. Tau should accept the decision, to be fair to
associates, 77.1.i., to cooperate with other professionals, 77.6., and to act with courtesy and good faith,
77.7.i. There is nothing prejudicial, 72.(2)(i). The committee has no interest in the parts company, 77.4.
2 (b) Action Tau should have taken - Tau should accept the assignment to be fair to the employer, 77.1.i.,
and to act as a faithful agent and trustee, 77.3. Tau should cooperate with other professionals, 77.6., and
act towards others with courtesy and good faith, 77.7.i. These actions may enhance public regard for the
profession, 77.2.ii. Tau's opinions should be based on facts and adequate knowledge, 77.2.iii.
2 (c) Consequences - there are no consequences from PEO for a breach of the ethics code, 72.(2)(g).
However, if Tau should breach the misconduct code, this could lead to loss of licence, 72. (2)(j).
3 (a) Cover-up of extra costs for segments of trench collapse:
Frey, P.Eng. did the right thing by refusing to sign the progress payment. By not signing she was being
fair and loyal to the client, Oversight, and actually also to the employer, Boring, 77.1.i. Frey was acting
with devotion to high ideals of personal honour and integrity, 77.1.iii. She could be enhancing public
regard for the profession, 77.2.ii. She was acting with proper ethics and so does not face consequences,
72.(2)(g).
Frey might have acted earlier to prevent the accidents by reporting the situation, 72.(2)(c), by making
provision to comply with standards, 72.(2)(d), by encouraging safety for the workers, 72.(2)(b), by
warning of the consequences, 72.(2)(f), and by acting with regard to public welfare as paramount, 77.2.i.
Loki, P.Eng. did the wrong thing in giving in to pressure from Thor. Loki's action in signing the progress
payment, for re-digging costs which were not in the contract, is not fair to either the client, Oversight, or
to the employer, Boring, 77.1.i. It is not devotion to high ideals of personal honour and integrity, 77.1.iii.
Loki compromised his principles by ordering Frey to sign off on the extra costs without re-negotiating the
contract. This would not enhance public regard or the profession, 77.2.ii. He did not act with courtesy
towards Frey, 77.7.i. Without fear or favour, Frey should expose Loki's dishonest conduct before the
proper PEO tribunals, 77.8. As a consequence, Loki could face a charge of disgraceful conduct, 72.(2)(j).
Thor, not a P.Eng., does not face a consequence from PEO but Thatcher may be concerned if it is known.

Study Guide Part "A" – April 11, 2015  Professional Practice and Ethics
3 (b) Recommended recourse for Frey - she was fired, so she should sue for wrongful dismissal. The suit
could include a claim of harassment about 'pretty little head' and about Loki's cavalier attitude, 72.(2)(n).
Loki was not experienced in geological testing and Frey was overruled by Loki, 72.(2)(f). If Frey does
expose Loki's conduct before the proper tribunals, PEO may discipline Loki, and Frey may be rehired.
4 (a) Conduct of LESS, leaking PCB's - a person(s) at LESS gave the report to Regressive, without a review
or signature by Zeta, P.Eng.. This conduct violates the terms of LESS's Certificate of Authorization (C of
A), PE Act 17.(1), R 941 47.1. and 72.(2)(k). The responsibilities of LESS have been ignored for safety,
72.(2)(b), and for standards, 72.(2)(d). As a consequence, LESS could lose its C of A, 72.(2)(k).
4 (b) Conduct of Zeta - after the errors were found, Zeta failed in proper conduct to notify neither
Regressive nor the Ministry of the Environment (MOE), 72.(2)(c). Zeta did not take any responsibility to
remedy the report, 72.(2)(d), or to prevent the release of PCB's, 72.(2)(b). These failures do not maintain
standards and are negligence, 72.(2)(a). Zeta has failed to ensure P.Eng. supervision, PE Act 17.(1). As a
consequence, Zeta could be charged with professional misconduct and lose his P.Eng. licence, 72.(2)(j).
4 (c) Actions Zeta should have taken before working for LESS - this work is moonlighting. Zeta should be
satisfied there would be no conflict of interest in working for LESS. Zeta should have conferred with
MORE, even though there was no competition with LESS, in fairness to his principal employer, 77.1.i.
Zeta should have given LESS a written statement of his status at MORE and the limitations on services to
LESS. Having done these things Zeta would have been more correct in his actions with LESS, 77.5.

PROFESSIONAL PRACTICE EXAMINATION – December 6, 2014
You will be given a total of 90 minutes to complete this examination.
after completed.

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.

Question 1
(5) a) PEO has enforcement as one of its regulating functions. What does the term
enforcement mean?
(5) b) PEO issues a Limited Licence. In addition to paying the necessary fee, briefly state
three other requirements to obtain such a licence.
c) The practice of stamping an original drawing exposes a P. Eng. to liability. Why is it

(5)
not a good practice to release drawings which bear only a photocopy of the
practitioner’s stamp and signature?
(5) d) In order to be designated as a “Consulting Engineer” one must meet a number of

requirements. Briefly list three of them. What additional privileges or rights are granted
by this designation?
(5) e) A P.Eng. has publically criticized a fellow P.Eng. contrary to [77.7.iii]. What
consequences might he face? Explain.
Question 2
Delta, a professional engineer (P.Eng.) is hired in a contract capacity to provide expert

advice on the installation of a control system for a power plant being built by Upstart
Energy. Delta has all the necessary licenses (P.Eng, C of A, liability insurance) to provide
these services to Upstart Energy. The project manager Sigma, who is also a P.Eng., works
for the client Upstart Energy and is responsible for supervising all construction labour.
It soon became apparent to Delta that the facility has no safety procedures in place for its
work crew; i.e. no hard hats, safety shoes nor eye protection are worn by the workers. The
workers were engaging in very unsafe practices that Delta knew were against provincial
labour regulations.
(a) Does Delta, who is hired to only give technical advice about the construction of the
power plant, have any obligation in respect of the possible danger that the work crew
faces? If so, what action should Delta take? Discuss, giving reasons and consequences.
(b) What are the responsibilities of Sigma? Do they differ from Delta? Discuss, giving
reasons and consequences.
Use the Code of Ethics and Code of Professional Misconduct as your guide.

Question 3
RetailCo. operates a small chain of retail stores that specialize in selling home improvement
products. In order to improve its distribution efficiencies, RetailCo would like to build a
central warehouse that would serve all of its stores. RetailCo contacted DesignCo, a large
engineering firm, to inquire about hiring them to design the facility.
Eager is employed as a professional engineer by DesignCo. At the request of Honcho, the head
of Eager's division, Eager accompanied Honcho to a meeting at DesignCo's offices with some
representatives of RetailCo to discuss how DesignCo might be able to assist RetailCo with the
potential project. At the meeting, RetailCo 's representatives described to Honcho and Eager
the attributes that RetailCo was looking for in the proposed new warehouse. They also asked
about the fees that DesignCo proposed to charge for its services. Upon being advised of
DesignCo's standard rates, RetailCo's representatives stated that, unfortunately, they could not
afford to hire DesignCo for this project. Honcho was not prepared to discount DesignCo's
quoted rates, which Honcho described as being "extremely competitive". Although everyone
was disappointed, the meeting ended pleasantly.
The next day, Eager received a telephone call from Frugal, one of the representatives of
RetailCo. Frugal was wondering if Eager would be interested in preparing the design for the
warehouse "on the side", after work in the evenings and on weekends. RetailCo was prepared
to pay Eager at an hourly rate that was 50% of the hourly rate that DesignCo would have
charged for Eager's time. In a hushed voice, Eager undertook to give the proposal some
consideration and get back to Frugal.
Eager thought about Frugal's offer. It had been three years since Eager had last received a
salary increase from DesignCo. Even at rates discounted by 50% from those charged by
DesignCo, this would be a very profitable opportunity for Eager. The money Eager would earn
from RetailCo would be more, on an hourly basis, than the rate on which Eager's current salary
was based, and unlike DesignCo, Eager didn't have to worry about big overheads and other
expenses. Eager then thought about how DesignCo might react to the arrangement, but decided
that since DesignCo wouldn't be getting this work anyway, there shouldn't be a problem.
Besides, Eager thought, there was no reason why they even needed to know about it.
Even though Eager had not designed a project this large by himself, he called Frugal back the
next day to accept the engagement and enthusiastically began working on the project that
evening.
Using PEO’s Codes of Ethics and Professional Misconduct as your guide:
(10) a) Comment on and discuss the appropriateness of Eager's conduct
(10) b) Are there any further actions Eager should take? Discuss giving your reasons.
(5) c) Would eager face any consequences from PEO? Discuss giving your reasons.

Question 4
Omega, P.Eng. as a process engineer for Universal Chemical Corporation signed a secrecy
agreement with Universal that prohibits Omega from divulging information that the firm
considers proprietary. Universal Chemical developed an adaption of a standard piece of
equipment that makes it highly efficient for cooling viscous plastics slurry. The company
decided not to patent the idea but to keep it a trade secret.
Omega subsequently left the employment of Universal to work for a candy processing facility
that is not in any way competition to Universal. Omega soon realized that a modification
similar to Universal’s trade secret could be applied to a machine used for cooking fudge and at
once arranged for the change to be made.
(13) (a) Has Omega acted ethically? Discuss the situation in relation to PEO’s Code of Ethics and
Code of Professional Misconduct.
(7) (b) What steps, if any, should Omega take?
(5) (c) Would PEO take any steps to discipline Omega? Discuss.

Study Guide
Part "A" – December 6, 2014
The purpose of Part "A" is to examine a candidate's understanding of PEO functions (Question 1) and the
Misconduct and Ethics Codes in Regulation 941 sections 72. & 77. (Questions 2, 3 & 4).
Sections 72. & 77. will be supplied at the examination but they should be carefully studied before the
examination. Advance study will facilitate the matching of situations in the questions with situations in
the codes, and the inclusion of exact code numbers and their sub-sections within the written answers.
During study time, try to develop a writing process and timing skill by practice writing, review and re-
writing. Questions may be re-used. Writing at first may be with study aids but later should be without
aids and under time pressure. This Study Guide may contain more material than usual in a 20 minute
answer.
The references given below are from the PE Act, and from Regulation 941 (R 941). These references are
here for study purposes only, and are not expected in an answer, except for sections 72. & 77.
1 (a) Enforcement function - to prosecute people or companies who are offering professional
engineering services to the public, but who do not have a license or a Certificate of Authorization (C of A),
PE Act 12.
1 (b) Limited licence (LL) - needs fee and 1) technologist diploma or equivalent, 2) 13 years experience -
including academics, 1 year P.Eng. supervision, and the last 2 years in a narrow field to which the LL is to
apply, 3) pass the Professional Practice Examination (PPE), and 4) be of good character, R 941 46.
1 (c) Stamp and signature - a photocopy should not be used or accepted. Its authenticity cannot be
verified and control is lost. Documents for distribution should each have an original stamp and signature.
See www.peo.on.ca Forms and Publications - Practice Guideline - Use of Professional Engineer's Seal.
1 (d) Consulting Engineer (CE), requirements 3 of, and a right - 1) a P.Eng. member, 2) experience of 5
years as a P.Eng., 3) responsibility of 2 years in 'independent practice' (may be within 5 years as a P.Eng.)
and 4) passed exams unless exempt, R 941 56. A right is to use the title 'Consulting Engineer', R 941 59.
1 (e) Consequences of public criticism of a fellow P.Eng. - this falls within the Code of Ethics, 77.7.iii, and
there are no consequences since it is an exception to the definitions of professional misconduct,
72.(2)(g).
2 (a) Delta P.Eng., obligations beyond specific contract work - yes, Delta does have obligations in respect
to the possible dangers the work crew is facing. The workers are part of the public. Delta is obligated to

Study Guide Part "A" - December 6, 2014  Professional Practice and Ethics
regard public welfare as paramount, 77.2.i., and to act with fidelity to public needs including safety,
77.1.ii. Delta should first contact Sigma P.Eng., who is responsible for supervising the construction
labour, 77.1.i.
If Upstart has directed Sigma to ignore the regulations, Delta should try to meet with management and
present clearly the consequences of safety deviations, 72.(2)(f). If there is no action, Delta must report
the situation to the labour regulators, 72.(2)(c), and to safety standards regulators, 72.(2)(d).
Delta should make a complaint to the proper tribunals at PEO, and expose this misconduct by Sigma and
any other P.Engs at Upstart, without fear or favour, to maintain the honour of the profession, 77.8. If
Delta does not do these things then Delta is exposed to the consequences of misconduct, 72.(2)(j).
Upstart may try to break their contract with Delta and if so, Delta should sue for wrongful dismissal.
2 (b) Sigma P.Eng., responsibilities - these are the same as Delta's. Sigma should have ensured
compliance with safety regulations before the project start, 72.(2)(d). Sigma should act now to make a
reasonable provision for safeguarding of workers, 72.(2)(b), or Sigma could be subject to a charge of
misconduct, 72.(2)(j). As in 2 (a) above, Delta should send a complaint to PEO, 77.8. The Complaints
Committee (CC) should forward this to the Discipline Committee (DC) for their action. As a consequence,
Sigma's P.Eng. licence could be revoked, PE Act 28.
3 (a) Eager's conduct - is not appropriate because the 'evening and weekend work' (EWW) which is also
known as 'moonlighting', is being deliberately concealed from DesignCo. This EWW is contracting for
other than the employer and, unless prior disclosure is given, is in a conflict of interest, 72.(2)(i)4. Eager
P.Eng. is being unfair to DesignCo, 77.1.i., and not acting as a faithful agent or trustee, 77.3. Eager's
interest in RetailCo might be prejudicial to Eager's judgment at DesignCo, 77.4. Calling Frugal to accept
the engagement was furtive and not devotion to high ideals, 77.1.iii. This is disgraceful conduct, 72.(2)(j).
3 (b) Eager's further actions - DesignCo should be informed and then must be satisfied there is no
conflict. If there is a conflict, the EWW is against the Code of Ethics, 77.5. If not, Eager is clear to work
with RetailCo. Eager should ensure in writing to Frugal, and through to RetailCo, that they are aware of
the limitations on Eager's EWW services and the status as an employee at DesignCo. Eager has not
designed a project this large by himself and there could be a question of competence, 72.(2)(h) and
77.1.v. If not already, Eager must obtain a Certificate of Authorization (C of A) from PEO, PE Act 12.(2).
3 (c) Consequences to Eager from PEO - if Eager's work is incompetent, a complaint and charge could be
made, and Eager's P.Eng. licence could be revoked, 72.(2)(h). Breaches in ethics are exempt, 72.(2)(g).
4 (a) Omega P.Eng., actions - Omega has not acted ethically in making process changes at the new
employer, using a trade secret from a former employer, 77.1.i. Omega has failed to keep confidential, a
former employer's process, 77.3. Even though the new employer is not in competition with Universal in
any way, the action is still a breach of trust and is not acting with a devotion to high ideals, 77.1.iii.

Study Guide Part "A" - December 6, 2014  Professional Practice and Ethics
This action is negligent failure to maintain the standards of a prudent practitioner, 72.(2)(a). It is conduct
that would reasonably be regarded as dishonourable, 72.(2)(j). Even though the ethical violations would
normally be exempt from misconduct, 72.(2)(g), it is still clearly theft and cannot be condoned. Omega
could however, use non-proprietary information as learned about while at Universal.
4 (b) Omega's next steps - having made the error, there is exposure to potential legal action by Universal.
Omega should first contact a patent lawyer and seek advice. Possibly a licensing agreement can be
made. If the lawyer agrees, the next step would be to open negotiations with Universal, to see if there is
an interest and at what price, 77.1.i. If the result is unfavourable Omega must change the process at the
candy processing facility, back to what it was before, and make any needed restitution to Universal.
4 (c) Discipline by PEO - whatever the final results in 4 (b), Omega can be alleged to be a thief. PEO
should process a charge of disgraceful conduct, 72.(2)(j), and limit or revoke the P.Eng. licence,
PE Act 28.

PART “B”
Engineering Law and Professional Liability

Part "B" - Question 1
Basics to Know - 'Key Words' Format
For further information, please see Marston text, 4th Edition, page(s) referenced Page
Arbitration & Alternative Dispute Resolution (ADR) - without recourse to courts, usually binding 235
Arbitration and Mediation, difference between - arbitration is binding, mediation is not pgs 235 > 239
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 33
Common-law - or judge-made law, relies on precedents as a basis of predictability in decisions 2
Contra proferentem, rule of - for clause ambiguity, interpretation is against party that drafted clause 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
Fraudulent misrepresentation - a deceptive statement made by a party, deceived party may sue 109
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
Secret commission - bribe to one party, by a 3rd 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

PART “B” - Engineering Law and Professional Liability
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.
after completed.

All four questions constitute a complete paper for Part “B”. Each of the four questions is worth
25 marks.

(25) 1. Briefly define and explain any five of the following:
(i) Equitable estoppel

(ii) Vicarious liability
(iii) The discoverability concept
(iv) Statutory holdback
(v) Secret commission
(vi) The New York Convention
(vii) The difference between arbitration and mediation
(viii) Contra proferentem
(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
engineer’s 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 engineer’s involvement would decrease the Vice-President’s 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.”
Sometime 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 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 construct a major concrete bridge
structure as part of its road infrastructure servicing a new subdivision. To do so, the
Owner planned to invite competitive tenders from contractors for the construction of the
new bridge structure.
The Owner’s consultant on the project, a professional engineer, designed the bridge 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 Owner’s
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
Owner’s Tender Documents. The lowest bid was well within the Owner’s budget.

Within the 60 days specified and before the Owner’s 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.
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.
(25) 4. A $30,000,000 contract for the design, supply and installation of a cogeneration
facility was entered into between a pulp and paper company (“Pulpco”) and an industrial
contractor. The cogeneration facility, the major components of which included a gas turbine, a
heat recovery steam generator and a steam turbine, was to be designed and constructed to
simultaneously generate both electricity and steam for use by Pulpco in its operations.
The contract provided that the electrical power generated by the cogeneration facility was not to
be less than 25 megawatts. A liquidated damages provision was included in the contract
specifying a pre-estimated amount payable by the contractor to Pulpco for each megawatt of
electrical power generated less than the minimum 25 megawatts specified. Other provisions
specified additional liquidated damages at prescribed rates relating to other matters under the
contract, including any failure by the contractor to meet the required heat rates or to achieve
completion of the facility for commercial use by a stipulated date. However, the contract also
included a “maximum liability” provision that limited to $5,000,000 the contractor’s liability for
all liquidated damages due to failure to achieve (i) the specified electrical power output, (ii) the
guaranteed heat rate and (iii) the specified completion date. The contract clearly provided that
under no circumstances was the contractor to be liable for any other damages beyond the overall
total of $5,000,000 for liquidated damages. Pulpco’s sole and exclusive remedy for damages
under the contract was strictly limited to the total liquidated damages, up to the maximum of
$5,000,000. The contract specified that Pulpco was not entitled to make any other claim for
damages, whether on account of any direct, indirect, special or consequential damages, howsoever
caused.

Unfortunately the contractor’s installation fell far short of the electrical power generation
specifications (achieving less than 25% of the specified megawatts) and the heat rate
specifications provided in the contract. The contractor was paid $27,000,000 before the
problems were identified on startup and testing. Because of its very poor performance, the
contractor also failed to meet the completion date by a very substantial margin. Applying the
liquidated damages provisions, the contractor’s overall liability for all liquidated damages under
the contract totalled $4,000,000. Ultimately Pulpco had to make arrangements through another
contractor for new equipment items and parts to be ordered and installed in order to enable the
cogeneration facility to meet the technical specifications, with the result that the total cost of the
replacement equipment and parts reached an additional $15,000,000 beyond the original contract
price of $30,000,000.
Explain and discuss what claim Pulpco could make against the contractor in the circumstances.
In answering, 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.

Study Guide
Part "B" - April 11, 2015
The purpose of Part "B" is to examine an elementary knowledge of law as it may apply in an engineer’s
working experience. Question 1. is definitions, with 8 options. Answer only 5.
Questions 2., 3. & 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 included in a 20 minute answer.
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.
Repeat Note: For Question 1. answer only 5 of the 8 options given here.
1. (i) Equitable estoppel - a means of preventing an inequitable result, if an owner, having agreed
verbally to a 'gratuitous promise', then later insists on staying with the strict terms of a contract. The
promise is not in writing and has no consideration. However the performer does rely on the promise and
continues work.
1. (ii) Vicarious liability - should an employee's actions cause damage or loss to a client, the employer is
'vicariously liable' for the loss. This assumes the employer is more able to pay (has deep pockets).
1. (iii) Discoverability concept - relates to a time limit being placed on a claim for a loss. The basic
limitation is 2 years from when a defect is discovered or ought reasonably to have been discovered. The
ultimate limitation is 15 years from when work was completed, e.g., when a building was built. If an
action is not filed within these periods it will be 'statute barred'. Parties to a contract may specify
different limits.
1. (iv) Statutory holdback - a percentage of the value of work done as construction proceeds. In case the
prime contractor is not making payments to sub-contractor(s) as scheduled in a contract, the holdback is
money the owner is obligated to set aside to pay sub-contractors. If lien claims are made these amounts
are held back in addition to the holdback. In Ontario the holdback is 10% for 45 days, pages 249 - 260.
1. (v) Secret commission - a bribe offered to a party to a contract to deceive the other party. The person
offering the bribe and also the recipient, can both be charged with an indictable offence, pages 179 - 180.
1. (vi) New York Convention - an agreement signed in 1958 by over 135 countries including Canada. The
courts in any of the countries will enforce an arbitration decision from another country. The purpose is
to minimize the costs of foreign litigation. A foreign work contract should be with a signing country, page
30.

Study Guide - Part "B" April 11, 2015  Engineering Law and Professional Liability
1. (vii) Arbitration and mediation, difference between - arbitration is resolution of a dispute by an

arbitrator or panel. Their decision will be final and binding. Mediation is resolution by negotiation, with
guidance by a mediator. Mediation will require compromise and a sincere interest by both parties in a
settlement. It is not legally binding. The main difference is, arbitration is binding but mediation is not,
pages 30, 235 - 239.
1. (viii) Contra proferentem - where a clause in a contract is ambiguous, the determination of liability for
damages will be against the party that drafted the contract, page 136.
2. Tort, potential liabilities - a legal 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 as money may
relieve a loss. All three principles of tort law can be proven relevant here, and these are :
o a duty of care
o a breach of that duty, and
o damage or loss as a result of the breach, page 32.
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 the duty of care was breached.
Tort principle 3) applies because there was damage and extra expense needed to cover the losses.
If there were no qualifying statement, a likely outcome is a liability to XYZ of 30% and to E Inc of 70%.
They would be 'concurrent tortfeasors'. The employer is 'vicariously liable' for the actions of the
employee.
E Inc should have taken more time to look for hazardous substances and to be aware of the potential for
problems. An area of negligence was the limited time the Vice-president could spend on the audit.
Because E Inc did have a clear and valid qualifying statement in their reports, they have no liability. This
was 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 A, potential liabilities - in receiving the submitted bids, 5 'Contract A's' were formed with the
Ontario municipality owner (OMO). The owner's consultant engineer (OCE) should deal with the political
pressure being applied by the prominent Council member (PCM) by pointing out that a change to tender
conditions would breach the Contract A's and be breaking the precedent law. The Ron Engineering case
determined the submission of a bid is a contract, deemed Contract A, pages 118 - 134.

Study Guide - Part "B" April 11, 2015  Engineering Law and Professional Liability
The strong view of the PCM, is that the final contract, deemed 'Contract B' should be awarded to a local
bidder. If this took place, the original low bidder could sue the OMO for breach of Contract A and for lost
profits. The other 4 bidders could sue the OMO for breach of their Contract A's. Potential liabilities
include the expenses and legal costs of all the suits. The OCE would be liable for all the OMO costs.
An alternative is to reject all bidders and re-issue the documents indicating preference would be shown
to a local bidder, placing all bidders on a level playing field. However it would likely reduce the number
of bids and the local bidder would be higher than before, depending on 'connections' with the PCM.
The PCM must have known about the proposed concrete bridge structure well in advance of document
release, and should have given early notice of preference for local contractors. Council members are
people who make laws they expect to be followed, yet here is a PCM who is intending to break the law.
4. Contract, breach of and liability - Pulpco can make a claim for damages against the industrial
contractor (IndCon) because of 'fundamental breach' of the contract. Based on a history of these cases, a
clause to limit liability is not normally enforceable. The electrical power system was only 25% effective.
Pulpco had expected their costs to be $30,000,000 and had paid $27,000,000 so should still expect to pay
a net balance of $3,000,000. Pulpco can make a claim against IndCon for the costs from another
equipment supplier of $15,000,000 less the net to pay of $3,000,000 for a total claim of $12,000,000.
They could also include costs in their claim for delay, lost production, etc.
Some Canadian courts have allowed the enforceability of limited liability clauses. If the construction of
the wording, about the amount of money in a limited liability clause, is clear and true, and the liquidated
damages 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. Therefore the law has changed in this area from just 'fundamental breach'.
Applying the liquidated damages provisions, IndCon's overall liability totalled $4,000,000. This means
Pulpco would sustain a loss of $8,000,000 and IndCon would not be liable for any other costs.
Similar case precedents are Harbutt's Plasticene vs. Wayne Tank and Pump where the clause was not
enforceable, and Hunter Engineering vs. Syncrude where it was, pages 155 and 159.

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.
after completed.

All four questions constitute a complete paper for Part “B”. Each of the four questions is worth
25 marks.

(25) 1.Briefly define and explain any five of the following:
(i) Contract A in tendering

(ii) Fraudulent misrepresentation
(iii) Fiduciary duty of a director
(iv) Statutory holdback
(v) Secret commission
(vi) The New York Convention
(vii) The difference between arbitration and mediation
(viii) Contra proferentem
(25) 2. National Stores Inc. (“NATIONAL”) , the owner of a grocery store chain in Ontario,
contracted with an architect to design and prepare the construction documentation for a new store in
a town in northern Ontario.
The architect produced some general construction specifications that included a requirement that an
automatic sprinkler system, conforming to the National Fire Protection Association (“NFPA”)
standards, be installed.
The architect retained an engineering firm pursuant to a separate agreement to which NATIONAL
was not a party. Under the contract the engineering firm was to prepare the detailed engineering
design for the project, including the sprinkler system. The engineering design was to conform to the
architect’s general specifications.
A recent engineering graduate employed by the engineering firm prepared the design of the sprinkler
system. Not being familiar with the NFPA requirements, the employee read certain sections of the
standards but did not have enough time, given other project responsibilities, to pay close attention to
all the details. A professional engineer reviewed the employee's completed sprinkler system design.
Although the professional engineer did not perform a detailed check, the professional engineer
considered the design satisfactory. Six months after the store opened for business, a fire occurred
early one morning. The fire caused substantial damage to the store and to its inventory and
NATIONAL had to close the store for repair.

NATIONAL retained a consulting engineer to conduct an independent investigation. The

consulting engineer determined that the sprinkler system was inadequately designed. Specifically,
the design did not conform to the NFPA standards, which required, among other things, that the
coverage per sprinkler head was not to exceed 10 square metres. The engineer determined that 10
percent of the sprinkler heads were designed to cover an area as high as 25 square metres. The
report indicated that, in the engineer’s expert opinion, had the sprinkler head spacing conformed to
the NFPA standards, the fire should have been quickly extinguished and would not have spread to
any great extent.
What liabilities in tort law may arise in this case? In your answer, explain the purpose of tort law
and identify what essential principles of tort law are relevant. Apply each principle to the facts.
Indicate a likely outcome of the matter.
3. (25) 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 firm’s 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 was 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 airline’s finance
department asked the information technology firm’s representative on the project for additional
information relating to an invoice from a subcontractor to the information technology firm. The
subcontractor’s invoice comprised a portion of the fourth progress payment amount.

The airline’s 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 firm’s representative did verbally indicate to
the airline’s 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.
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.
4. (25) A telecommunications development company leased an outdated and unused underground

pipe system from an Ontario municipality. The developer’s 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 contractor’s 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 contractor’s 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.

Study Guide
Part "B" - December 6, 2014
The purpose of Part "B" is to examine an elementary knowledge of law as it may apply in an engineer’s
working experience. Question 1. is definitions, with 8 options. Answer only 5.
Questions 2., 3. & 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 included in a 20 minute answer, or less for a sub-part.
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.
Repeat Note: For Question 1., answer only 5 of the 8 options given here.
1. (i) Contract A in tendering - an Owner's bid documents establish the conditions for a bid. When a bid is
submitted a Contract A is formed. There are as many Contract A's as bids. A breach of the conditions is a
breach of Contract A. On award of the work, a Contract B is formed with one bidder, page 121.
1. (ii) Fraudulent misrepresentation - a statement made 1) knowingly, or 2) without belief in its truth, or
3) recklessly, careless of whether it be true or false. The misled party may apply to the court to rescind the
contract and to claim for costs. The party can also sue for damages for deceit, page 109.
1. (iii) Fiduciary duty of a director - this duty is always to act with the benefit of the corporation in mind and
not to use any company information for the personal advantage of the director, pages 20 - 24.
1. (iv) Statutory holdback - a percentage of the value of work done as construction proceeds. If the prime
contractor is not making scheduled payments to the sub-contractor(s), the holdback is money the owner is
obligated to set aside to pay sub-contractors, until all lien periods expire. In Ontario the holdback is 10% for
45 days, and there are 2 holdbacks, basic and finishing, page 249 - 260.
1. (v) Secret commission - is a bribe offered to a party, to deceive another party to a contract. The person
offering the bribe and also the recipient, can both be charged with an indictable offence, pages 179 - 180.
1. (vi) New York Convention - an agreement signed in 1958 by over 135 countries including Canada. The
signatories agreed their courts will enforce arbitration decisions from other countries. The purpose is to
minimize the costs of foreign litigation. A foreign work contract should be with a signing country, page 30.
1. (vii) Arbitration and mediation, difference between - arbitration is resolution of a dispute by an arbitrator
or panel. Their decision will be final and binding. Mediation is resolution by negotiation, with guidance by a
mediator. Mediation will require compromise and a sincere interest by both parties in settlement. It is not
legally binding. The main difference is, arbitration is binding but mediation is not, pages 30, 235 - 239.

Study Guide - Part "B" December 6, 2014  Engineering Law and Professional Liability
1. (viii) Contra proferentem - where a clause in a contract is ambiguous, the determination of liability for
damages will be against the party that drafted the contract, page 136.
2. Tort, potential liabilities - the purpose of tort law is to compensate a party who has sustained injury or
property damage, so far as money will permit. The essential principles are 1) a duty of care 2) a breach of
that duty and 3) resulting damage or loss. There is no contract between the parties, pages 37 - 70.
A legal action would be brought by the grocery store chain (GSC) against the engineering firm (TEF). The
contracted architect (TCA), depending on provisions in the contract, could be liable in contract and in tort.
TEF had a duty of care 1) to ensure the sprinkler system would be designed to NFPA standards. This duty
was breached 2) because the sprinkler system did not perform as expected. This breach was confirmed by
an independent consulting engineer, giving 'expert testimony' the sprinkler design did not conform to NFPA
standards. There was substantial damage and loss to the store and inventory 3) because of a fire which
should have been quickly extinguished and its spread limited.
When it was discovered 'there was not enough time' more resources should have been allocated by TEF
management. A recent graduate may even be a P.Eng. but it is important to ensure sufficient work time is
allowed. The reviewing P.Eng. at TEF could be sued for not giving close attention to the time and details.
Although having a contract with GSC, even with limited liability clauses, TCA could also be found partly
responsible. Simply relying on a design from TEF, does not relieve TCA from a duty of care to make at least a
cursory review at TCA's expense. A likely outcome is the liabilities will be 80% to TEF and 20% to TCA. TEF
and TCA would be 'concurrent tortfeasors'. TEF is 'vicariously liable' for the actions of its junior engineer. A
similar case precedent is Unit Farm Concrete vs. Eckerlea Acres, page 46.
3. Equitable estoppel - the information technology firm (ITF) was not entitled to terminate the contract. ITF
made a 'gratuitous promise' to the airline finance department (AFD) to provide additional information on an
invoice. This promise was not in writing, there was no 'consideration' and the promise was freely made,
making it gratuitous. The AFD was clearly relying on the promise before making a fourth payment.
The ITF was faced with a serious loss and was trying to get out of the contract. If ITF insists on the express
wording of the contract, AFD could invoke the legal principle of 'promissory' or 'equitable estoppel' which is
to ensure the result would be equitable. Strict contractual rights are not followed in this case because
equitable estoppel is an 'exception remedy' to those rights. The promise is therefore, being enforced, even
though not in writing. A similar case precedent is Conwest Exploration vs. Letain, page 92
4. Contract, breach of and liability - the telecommunications development company (TDC) could make a
claim against the installation contractor (TIC) for at least $1,800,000. This is a case is of 'fundamental
breach' of the contract and the breach goes to the 'root' of the contract. The completion date was not met
and significant amounts of the fibre optic cable were damaged. Another contractor was engaged to replace
the cable. Based on a history of these cases, a clause to limit liability is not normally enforceable.

Study Guide - Part "B" December 6, 2014  Engineering Law and Professional Liability
Some Canadian courts have allowed the enforceability of limited liability clauses. If the construction of the
clause wording about the amounts of money, is clear and true and the liquidated damages 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' has taken place and the clause is enforceable. This principle is based on the
acceptance that parties of relatively equal bargaining power should have freedom to contract, without the
constriction of fixed rules. Therefore the law has changed in this area from just 'fundamental breach'.
The contract as signed by TDC, provided that TIC's maximum liability would be $1,000,000. TDC could
recover up to $1,000,000 and would sustain a loss of $800,000. TIC would not be liable for costs over
$1,000,000. Similar case precedents are Harbutt's Plasticene vs. Wayne Tank and Pump where the clause
was not enforceable, and Hunter Engineering vs. Syncrude where it was, pages 155 and 159.

Additional References:
 Professional Engineers Ontario (PEO) - regulating body - www.peo.on.ca
 Information - Professional Practice Exam http://www.peo.on.ca/index.php?ci_id=2060&la_id=1
 PE Act and Regulations: http://www.peo.on.ca/index.php?ci_id=1812&la_id=1
 Code of Ethics: http://www.peo.on.ca/index.php?ci_id=1815&la_id=1
 Professional Misconduct http://www.peo.on.ca/index.php/ci_id/2167/la_id/1.htm
 G. Gordon M. Sterling Engineering Intern Award: http://www.peo.on.ca/index.php?ci_id=2128&la_id=1
 Equity and Diversity at PEO - http://peo.scholarlab.ca/)
 Ontario Society of Professional Engineers (OSPE) - advocacy body - www.ospe.on.ca

Keys To Success - Webinar: THE Eit Program

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Keys to Success – Webinar

Grant Boundy, P.Eng., FEC

Basics to Know – Question 1 – Part “A” (Key Words) ............................................................................. 3

Basics to Know - Question 1- Part “B” (Key Words) ...............................................................................19

Additional References ................................................................................................................... 36

Definition: Practice of professional engineering - actions, principles, safeguards A 1. (13th item)

Requirements / conditions for:

PROFESSIONAL PRACTICE EXAMINATION – April 11, 2015

PART “A” – Professional Practice and Ethics

You will be given a total of 90 minutes to complete this examination.

White Answer Book for Part A white question paper.

WHERE A QUESTION ASKS IF A CERTAIN ACTION BY AN ENGINEER WAS

EIT Seminar – October 27 and 28, 2015 Page 4

(10) (b) What action should Tau have taken? Discuss.

EIT Seminar – October 27 and 28, 2015 Page 5

EIT Seminar – October 27 and 28, 2015 Page 6

EIT Seminar – October 27 and 28, 2015 Page 7

EIT Seminar – October 27 and 28, 2015 Page 8

3 (a) Cover-up of extra costs for segments of trench collapse:

EIT Seminar – October 27 and 28, 2015 Page 9

EIT Seminar – October 27 and 28, 2015 Page 10

PROFESSIONAL PRACTICE EXAMINATION – December 6, 2014

PART “A” – Professional Practice and Ethics

You will be given a total of 90 minutes to complete this examination.

White Answer Book for Part A white question paper.

WHERE A QUESTION ASKS IF A CERTAIN ACTION BY AN ENGINEER WAS

EIT Seminar – October 27 and 28, 2015 Page 11

c) The practice of stamping an original drawing exposes a P. Eng. to liability. Why is it

(5) d) In order to be designated as a “Consulting Engineer” one must meet a number of

Delta, a professional engineer (P.Eng.) is hired in a contract capacity to provide expert

EIT Seminar – October 27 and 28, 2015 Page 12

EIT Seminar – October 27 and 28, 2015 Page 13

(7) (b) What steps, if any, should Omega take?

EIT Seminar – October 27 and 28, 2015 Page 14

EIT Seminar – October 27 and 28, 2015 Page 15

EIT Seminar – October 27 and 28, 2015 Page 16

EIT Seminar – October 27 and 28, 2015 Page 17

EIT Seminar – October 27 and 28, 2015 Page 18

EIT Seminar – October 27 and 28, 2015 Page 19

PROFESSIONAL PRACTICE EXAMINATION – April 11, 2015

PART “B” - Engineering Law and Professional Liability

White Answer Book for Part A white question paper.

EIT Seminar – October 27 and 28, 2015 Page 20

(25) 1. Briefly define and explain any five of the following:

(i) Equitable estoppel

The Vice-President of E Inc., a professional engineer, responsible for the performance of

EIT Seminar – October 27 and 28, 2015 Page 21

EIT Seminar – October 27 and 28, 2015 Page 22

EIT Seminar – October 27 and 28, 2015 Page 23

EIT Seminar – October 27 and 28, 2015 Page 24

EIT Seminar – October 27 and 28, 2015 Page 25

1. (vii) Arbitration and mediation, difference between - arbitration is resolution of a dispute by an

EIT Seminar – October 27 and 28, 2015 Page 26

EIT Seminar – October 27 and 28, 2015 Page 27

PROFESSIONAL PRACTICE EXAMINATION – December 6, 2014

PART “B” - Engineering Law and Professional Liability

White Answer Book for Part A white question paper.

EIT Seminar – October 27 and 28, 2015 Page 28

(25) 1.Briefly define and explain any five of the following:

(i) Contract A in tendering

EIT Seminar – October 27 and 28, 2015 Page 29

NATIONAL retained a consulting engineer to conduct an independent investigation. The