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Lecture 1

LAW 122 Lecture 1: LAW 122 - Chapter 1 Notes

Law and Business
Course Code
LAW 122
Stan Benda

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LAW 122 Chapter 1: Risk Management and Sources of Law
Why Study Law?
Risk Management
Risk Management: Is the process of identifying, evaluating, and responding to the possibility of
harmful events
You need to identify, evaluate, and respond to the legal risks involved:
o Identification: In an event, you need to be concerned about liability, about actually
being held legally responsible. But you also need to be concerned about the possibility
of being sued
o Evaluation: Having identified the risks, you may decide the way to make it legally
acceptable. You may believe that the arguments in your favour are strong enough to
discourage your former employee from suing you
o Response: Having identified the risks, you must formulate the response. You have
options; refuse to write a letter, write a letter that does not mention your suspicions, or
write a letter accusing your former employee. The choice is yours
Managing risks:
o Risk Avoidance: Some risks are so serious that they should be avoided altogether.
Usually this means the risk is morally wrong, costly or both
o Risk Reduction: Some risks can be reduced to an acceptable level through precautions.
o Risk Shifting: Even if a risk cannot be avoided or reduced, it may be shifted onto another
o Risk Acceptance: It is sometimes appropriate to simply accept a risk.
Three Important Concepts:
o Insurance: A contract in which one party agrees, in exchange for a price, to pay a certain
amount of money if another party suffers a loss. Liability insurance provides a benefit if
the purchaser is held liable for doing something wrong. Property insurance provides a
eefit if the purhaser’s property is daaged, lost, or destroyed
o Exclusion and Limitation Clauses: A contractual term that changes the usual rules of
liability. The clause may attempt to exclude all risk of liability or may exclude liability for
certain types of acts or certain types of losses, or it may limit the amount of
compensation that is available.
o Incorporation: Set up liabilities as corporations to avoid being personably liable. The
most significant benefit of incorporation is limited liability. That means that it is usually
only the company itself, and not the directors or shareholders, that may be held liable
for debts. The company may be lost, but the people behind it will be safe.
An Introduction to the Legal System
Various Areas of law, including tort, contract, and property
The Nature of Law
Law: is a rule that can be enforced by the courts
A Map of the Law
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LAW 122 Chapter 1: Risk Management and Sources of Law
o Civil Law: Systems trace their history to ancient Rome
o Jurisdiction: A geographical area that uses the same set of laws
o Common Law: Systems trace their history to England
Public Law: Is concerned with governments and the ways in which they deal with their citizens
o Constitutional Law: Provides the basic rules of our political and legal systems. It
determines who is entitled to create and enforce laws, and it establishes the
fundamental rights and freedoms that Canadians enjoy
o Administrative Law: Is concerned with the creation and operation of administrative
agencies, boards, commissions, and tribunals
o Criminal Law: Deals with offences against the state. It is concerned with people who
break rules that are designed to protect society as a whole
White-collar crimes: Are committed by workers in suits
Corporate Crime: is committed by the company itself
o Tax Law: Is concerned with the rules that are used to collect money for public spending
Private Law: Is concerned with the rules that apply in private matters. Both parties in a private
dispute are usually private persons, either individuals or organizations such as corporations
o Tort: A private wrong, and offence against a particular person
Intentional Torts: Such as assault and false imprisonment
Business Torts: Such as deceit and conspiracy
Negligence: Which covers most situations in which one person carelessly hurts
o Law of Contracts: Is concerned with the creation and enforcement of agreements.
Contracts are involved in:
The sale of goods
The use of negotiable instruments
Real estate transactions
The operation of coporations
The employment relationship between a business and its workers
o Law of Property: is concerned with the acquisition, use, and disposition of property.
Three main parts:
Real Property: Involves land and things that are attached to land
Personal Property: Involves things that can be moved from one place to another
Intellectual Property: Involves things that consist of original ideas, such as
patents and copyrights
Overlap: There are two possibilities of overlap
o A single event can trigger more than one set of rules
o Some situations involve various types of laws
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