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LAW 122 Notes for ENTIRE COURSE.docx

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Law and Business
LAW 122
Theresa Miedema

LAW 122 Notes Chapter 1: Risk Management and Sources of Law  Why study law?  risk management (know the rights/rules)  Factors affect success and failure in business  decision-making: eg location choice, product, marketing  Business decisions have legal consequences  Negative: eg dumping pollutants into environment  Positive: eg binding contractual party to promise  Legal consequences affect profits and losses  Some decisions impose liability, others create opportunities  An introduction to the legal system  the nature of law  a map of the law  sources of law  Risk Management Process  Businesses must manage legal risks  Three steps:  identification: recognize legal risks  “Can we be held liable for this?”  evaluation: assessment of legal risks  “What are the chances of something going wrong?”  response: reaction to legal risks  “What are we going to do about it?”  Forms of Risk Management  nearly every business decision creates some risk  different risks must be treated differently   Reduction (bank collateral)  Shifting (insurance/waiver)  Acceptance (ford pinto car)  Examples  Insurance  liability insurance or property insurance  Exclusion and limitation clauses  contractual terms that exclude liability for some acts/losses, or limit compensation available  Incorporation  “limited liability”: shareholders not usually liable for company debts  The Nature of Law  Rules and laws  all laws are rules but not all rules are laws  Morality and law  moral wrongs are informally sanctioned  eg damaged friendships or reputation  legal wrongs are formally sanctioned  eg fines or imprisonment  Laws are rules that can be enforced by courts  Set of principles, mode of reasoning – thinking about problems and finding solution  Applying legal principles  Journey as well as destination  Morals is not equal ethics (letting the fisherman drown)  Identify the issue  State the law  Transition to the facts  Application (law and facts) is conclusion  sharks and ladders  virtue  rights + duties  fairness  consequences  Legal Jurisdictions  “Jurisdiction” means a geographical area that uses the same set of laws  Two main types of jurisdictions or legal systems  civil law jurisdictions  common law jurisdictions  Civil Law and Common Law  Civil law jurisdictions:  Originated in ancient Rome  eg France and most of Europe, Louisiana, and Quebec  Common law jurisdictions:  Originated in England  eg England, Australia, New Zealand, most of Canada  Some laws are the same across Canada  eg criminal laws and constitutional laws  Categories of Law   Public Law  Matters of public concern, such as:  constitutional law: rules governing basic operation of law and politics  administrative law: rules governing creation and operation of agencies, boards, tribunals, and commissions that exercise delegated authority  tax law: rules regarding collection of money for public spending  Criminal law  rules governing wrongs against society  eg punching a person  crimes in the business world:  white collar crimes (committed by “people in suits”)  corporate crimes (committed by a company itself)  A company can be convicted under the Criminal Code for acts of directors, officers, employees and others  Private Law  Matters of private concern, such as:  tort law: rules governing wrongs against persons (involuntary)  contract law: rules governing creation and enforcement of agreements (voluntary)  property law: rules governing acquisition, use, and disposition of property  Sources of Law  Hierarchy of sources of law  Constitution  legislation  courts  The Constitution  Provides basic rules for society, including our legal and political systems  Highest source of law  law inconsistent with Constitution: no force or effect  section 52 of Constitution  Difficult to amend  requires consent of both Parliament and two-thirds of all provinces with at least 50% of population  Federalism  Two constitutionally recognized levels of government  Federal government: represents entire country  Parliament, made up of Senate (appointed) and House of Commons (elected)  lead by Prime Minister  Provincial (territorial) government: represents province (territory), called the Legislature (elected)  lead by Premier  Division of Powers  Constitution divides legislative authority  federal government: eg crime, bankruptcy, copyright (section 91)  provincial government: eg property, civil rights (section 92)  federal government holds residual power  doctrine of federal paramountcy determines which law trumps when federal and provincial statutes conflict  when a government legislates outside its authority, law is ultra vires and has no force or effect (s. 52)  Charter of Rights and Freedoms   Part of Constitution since 1982  Rights and freedoms commonly affecting business:  freedom of religion  freedom of expression  freedom of mobility  right to equality: prohibited grounds of discrimination include race, sex and religion, but not poverty  Some interests not protected: economic and property  Limitation on Charter Rights  Charter only applies to government action  not (directly) applicable against private businesses  Charter may apply in favour of private business  some provisions limited to “individuals”  Charter rights subject to “reasonable limitations”  balance individual rights and community interest  Charter subject to “notwithstanding clause”  government can override some rights and freedoms  Charter Remedies  section 52: Constitution as supreme law  law inconsistent with Charter “of no force or effect”  section 24: enforcement of rights and freedoms  judge may award any appropriate remedy, including a declaration, injunction, striking down legislation, severance, reading down, or reading in, and damages  Charter Dialogue  Parliamentary supremacy: democracy  ultimate authority rests with governments (elected and accountable), not judges (appointed in Canada)  Charter dialogue  Government creates laws through legislation  Courts identify Charter violations  Government may respond by amending or enacting laws to conform with Charter  Legislation  Laws created by Parliament or Legislature  Two categories: statutes and subordinate legislation  Statutes: legislative process  introduced as “bill”  majority support through series of “readings”  sometimes public consultation follows  finalized by “royal assent”  Subordinate Legislation  Subordinate legislation (eg regulations, by-laws)  created under Parliament’s or legislature’s authority  example of municipality  province creates municipality  province gives municipality power to pass by-laws  Courts  Function of courts  interpret and apply Constitution  interpret and apply legislation  create and apply “common law” (judge-made law)  Definitions of “Common Law”  The term “common law” has different meanings depending on context:   Definitions of “Civil Law”  The term “civil law” has different meanings depending on context:  Legal system: Civil law (eg Quebec/France) vs. common law (eg England) jurisdictions  Private vs. Public Law (eg civil law vs. criminal law)  Common Law and Equity  Historical developments  phase I: courts of law  only one set of courts in England  rules often rigid and harsh  People sought other relief from the King  Historical developments (cont’d)  phase II: law and equity  Courts of law supplemented by courts of equity (or chancery)  separate courts, judges, and rules  phase III: fusion  law and equity combined into single court  ongoing rationalization of legal and equitable rules  in the event of an inconsistency, the equitable rules apply  Equity  Nature of equity  traditional equity: disputes resolved by conscience of king or chancellor  modern equity: disputes resolved by rules (essentially same as law)  occasional differences remain between law and equity (eg damages at law — specific performance at equity)  Trusts  Property held for benefit of another person  trustee holds legal title to property  beneficiary enjoys equitable title to property  Express trust: settlor transfers property to trustee to hold for beneficiary Lec 2: Ch 2: Litigation and Alternative Dispute Resolution • The litigation process o Resolving disputes using the court system o Business people can deal with lawsuits themselves, but experts are recommended for serious matters o Who can sue?  Adult people, even non-Canadians  Some organizations (corporations) but not others (eg usually not unincorporated associations)  Special rules apply when suing governments • Class actions o Most Canadian provinces allow class actions o Allows a single person or small group to sue on behalf of a larger group of claimants o Benefits  Allows small individuals to take on large organizations  Cost effective way to sue for small but wide-spread claims  Threat of class action may curtail big business behavior • Class action criteria o Common issues among all class members o Representative plaintiff who demonstrates workable plan for fairly representing all class members’ interests o Notification to all potential members of class o Preferable procedure to traditional litigation o Certification by court to allow class action to proceed • Legal representation o Self-representation o Lawyer o Paralegal • Self-representation o You have the right to represent yourself in court o Usually advisable only in simple matters  Remember the saying: a self-represented person has “a fool for a lawyer and a fool for a client.” • Representation by lawyers o Must complete training and be “called to the bar” after passing examinations o Governed by provincial bodies (Law Societies)  Imposes codes of conduct  Investigates and punishes misconduct  Victim assurance funds to compensate for misconduct o Must carry professional liability insurance o Communications are confidential and privileged • Representation by paralegals o A non-lawyer providing legal advice and services o Are regulated in some provinces (eg Ontario) o Regulated Paralegals:  Require some training and examinations  Have Codes of Conduct  Can be punished for wrongdoing  Must carry liability insurance  Are limited to certain types of work • Lawyers and paralegals compared o Paralegals may be less expensive than lawyers o Paralegals may be more specialized in their areas o Lawyers require more rigorous training o Lawyers can assist on a wide variety of matters, while Paralegals are restricted in their practice options o Not all provinces yet require Paralegals to be licensed o Paralegals may not work on contingency fee basis • Pleadings o Documents used to identify issues and clarify dispute  Drafted by a Party  Issued by Court  Served on opposing party o Parties:  Plaintiff or Claimant: person starting lawsuit  Defendant: person defending lawsuit • Types of pleadings o Statement of Claim  Used by plaintiff to start lawsuit • Some provinces use “writ” before a statement of claim  Outlines the dispute and states facts and desired remedies o Statement of Defence  Defendant should file within time-limit  Sets out defendant’s version of facts and denies liability o Counterclaim  Claim the defendant makes against the plaintiff  Defendant may combine defence and counterclaim in a “Statement of Defence and Counterclaim” o Statement of Defence and Counterclaim  Prepared by plaintiff to defend against counterclaim o Third Party Claim o Reply  Filed by plaintiff to dispute anything in the Statement of Defence o Demand for Particulars  Either party may require opposing side to provide additional information or clarify pleadings • Limitation periods o Period within which action must be started o General limitation period:  2 years from date plaintiff discovered (or ought to have discovered) the cause of action o Several exceptions to general rule depending on claim:  eg 20 years to recover land  eg 7 days to sue city for damages from poor road repair o Late claim generally unenforceable • Pre-trial activity o Documentary discovery o Examinations for discovery  Information gathered under oath outside court o Pre-trial conference  meeting between lawyers and judge to encourage settlement o Mandatory mediation (in Ontario and Alberta) o Settlement: resolving dispute before trial • Trial o Decision makers: judge and jury, or judge alone  Jury is very rare in civil litigation, more common in criminal  If jury, judge determines law, jury determines facts and applies law o Evidence: information provided by witnesses  Ordinary witnesses  Expert witnesses  Judge determines admissibility of evidence o Burden of Proof  Criminal: beyond a reasonable doubt  Civil: balance of probabilities o Criminal litigation outcomes: guilty or not guilty  Fine or imprisonment for conviction o • Enforcement in litigation o Winning a judgment does not guarantee judgment debtor will pay o Winning party must “enforce” their judgment o Enforcement techniques include:  Garnishee income  Seize and sell judgment debtor’s assets  Court officials and others such as sheriff can help • Appeals o A party may appeal a decision to a higher court  Appellant: party disputing lower court decision  Respondent: party supporting lower court decision o No new witnesses or evidence o Focus on law rather than fact  Overrule any errors of law, but only palpable and overriding errors of fact o Normally a panel of three or more judges  Majority decision prevails  Disagreement expressed through judge’s dissent o Effect of appeal judgements  Affirm decision below  Reverse decision below  Vary decision below  Send back to lower court for retrial • Costs o Expenses incurred during litigation (fees and disbursements) o If client believes excessive, can have costs “taxed” o General rule: loser pays winner’s costs (exceptions)  Usually party-and-party costs (partial)  Exceptionally solicitor-and client costs (substantial)  May be awarded if frivolous or vexations action  May be awarded if reasonable offer to settle rejected • Contingency fees o Client pays lawyer only if lawsuit is successful o Not allowed for certain types of lawsuits o Often covers legal fees but not disbursements o Not unusual for fee to be 25 – 40% of winnings o Effect of contingency fees  Benefit: poor parties able to afford litigation  Detriment: legal fees often higher than normal • Canada’s court system o • Supreme court of canada o Highest court in Canada o Nine justices: Chief Justice and eight puisne justices  Appointed by Government of Canada o No right to proceed to Supreme Court of Canada  Court may normally choose which appeals it will hear  You must apply for leave to appeal  Only hears cases of national importance • Appeal and trial courts o Courts of Appeal  Highest court in province or territory  Judges appointed by Government of Canada o Superior Courts  Hears civil law trials, and serious criminal matters  Judges appointed by Government of Canada  Occasionally hears appeals from lower courts • Federal courts o Three specialized courts:  Tax Court: disputes regarding payment of taxes  Federal Court, Trial Division • Trials concerning federal division of powers areas  Federal Court, Appeal Division • Appeals arising from Trial Division and Tax Court o Judges are appointed by Government of Canada • Provincial courts o Judges are appointed by provincial government  Family Court (eg support payments)  Youth Court (eg young offenders, neglected children)  Criminal Court: less serious crimes  Small Claims Courts • Usually division of Provincial Courts (except Ontario) • Small claims court disadvantages o Geographical limits  Normally must sue where event occurred or defendant lives o Types of claims: money or goods  No federal issues o Types of remedies: cannot award equitable relief o Monetary limits:  $6000 - $135,000 depending on jurisdiction • Court hierarchy and precedent o Hierarchy determines appeal route o All hierarchies end with Supreme Court of Canada o Also determines what decisions are binding on courts  Doctrine of Precedent  Judge must follow similar decisions from courts higher in same hierarchy  Other court decisions may be persuasive but not binding o Rule of Law: solve disputes based on law, not opinion • Administrative tribunals o Body that resolves issue and disputes o Somewhere between the government and a court  e.g., Human Rights Tribunals, Labour Relations Board, Competition Tribunal o Exercise a “quasi-judicial” function o Some are informal, some operate like courts o Decision makers generally experts in field, seldom judges • Judicial review o Administrative tribunal decisions are highly respected and not easily overturned o Can sometimes seek judicial review by a court on substantive or procedural questions  Standards of judicial review for substantive decisions: • Reasonableness standard: court defers to tribunal’s expertise, only overturns unreasonable decisions • Correctness standard: court may overturn any error • Judicial review: substantive decisions o To chose between two standards of review, court looks to doctrine of precedent o If standard not set by doctrine of precedent, court asks:  Is decision protected by a privative clause?  What is tribunal’s expertise compared to court’s?  What purpose did government intend tribunal to serve?  What is nature of the issue under review? • Judicial Review: Procedural Decisions o Normally on basis that rules of natural justice (or procedural fairness) were not followed o A tribunal is bound by rules of natural justice:  If the governing legislation indicates it is  If court determines it is after considering: • Nature of decision (was a specific dispute resolved?) • Relationship between decision maker and affected party • How the decision affected the party’s rights and interests • Remedies on Judicial Review o Court can issue:  Writ of certiorari: quash an administrative decision  Writ of prohibition: orders tribunal not to proceed with matter  Writ of mandamus: directs tribunal to perform duties correctly  Declaration: provides enforceable statement of parties’ rights and obligations • Alternative dispute resolution (ADR) o ADR is dispute resolution outside of court o Litigation:  slow, expensive, unpredictable, adversarial, public  Limited remedies, sometimes plaintiff just wants apology or explanation (but see some provinces Apology Acts) o ADR  quicker, cheaper, controlled, cooperative, private  sometimes ADR is mandatory, usually voluntary • alternative dispute resolution (ADR) o ADR is dispute resolution outside of court o Litigation:  slow, expensive, unpredictable, adversarial, public  Limited remedies, sometimes plaintiff just wants apology or explanation (but see some provinces Apology Acts) o ADR  quicker, cheaper, controlled, cooperative, private  sometimes ADR is mandatory, usually voluntary • types of ADR o Negotiation: discussion aimed at settling a dispute o Mediation: mediator assists with discussions aimed at settling dispute  Mediator’s decisions are non-binding o Arbitration: dispute resolved by an arbitrator  Arbitrator’s decision is binding on parties  Process may be informal or court-like o Also Online Dispute Resolution (ODR) in Chapter 19 • Litigation and ADR Compared o • Law suit = “action” • Cause of action (legal reason you are suing) o Breach of contract o Tort of battery/trespass • Plaintiff (complaint) the one that is suing, complaining about something (pi sign) • Defendant (the one being sued) (delta sign) Chapter 1: Case 1 • No obligation to deliver the machine to inga o She cant pay for the service o They don’t have to fufill the side to deliver o Principles of contract • What sort of considerations might come up o Ethics (Consequences, Fairness, Rights/Duties, virtue) o If she goes bankrupt she fails her creditors, the economy falls, less supply to the market (her crop) o If the company has shareholders, must look at rights and duties Week 3: Chapter 3: Introduction to Torts • Tort o A tort is a failure to fulfill a private obligation imposed by law o Tortfeasor is a person who commits a tort o Tort law includes almost every sort of private law wrong outside of breach of contract o Tort law discourages people from committing private wrongs by requiring them to compensate victims • o Same event may be both a tort and a crime o eg beating is both tort of battery and crime of assault • Torts and Contracts o Both involve primary and secondary obligations  Breach of primary obligation creates secondary duty • Tort • Primary duty: do not harm another • Secondary duty: compensatory damages o Contract  Primary duty: fulfill your promises  Secondary duty: compensatory damages • • Types of Torts o Torts law tries to balance competing interests o o Tort law therefore focuses on mental culpability, on basis of strict liability, intention, or carelessness o • Intentional Torts o Occur when a person intentionally acts in certain ways o Meaning of “intention” differs depending on tort:  Some require intention to harm plaintiff (See Chap. 5) • Protects financial interests from purposeful harm o eg inducing breach of contract, intimidation o Some require only intention to act a certain way (Chap. 4)  Protects valuable interests such as physical safety and freedom • eg battery, false imprisonment • Negligence Torts (Ch 5, 6) o Occurs when a person acts carelessly  eg negligence, product liability, professional negligence, occupier’s liability, nuisance o Activity is permitted if reasonable in circumstances o Will be dealt with in detail in Chapter 6 • Strict Liability Torts o Liability regardless of intention or carelessness o Create special problems for risk management  Liability imposed simply because defendant responsible for situation that cased harm o Strict liability torts are rare, limited to extraordinarily dangerous activity  activity permitted, but liability imposed for any harm o Examples: livestock, ownership of wild animals • Liability Insurance o Unexpected tort liability imposes challenges for risk management o Liability insurance can be used to manage tort liability  Contract in which insured pays insurance company to • Defend claims against insured • Indemnify insured for loss if held liable  Does not normally cover all torts of insured • Vicarious liability o Being held liable for torts committed by another o Common business risk  employer often vicariously liable for employees’ torts o Justifications for vicarious liability  Enhances compensatory function  Enhances deterrence function  Requires businesses to bear costs of operation • Scope of vicarious liability o Vicarious liability only for employee torts committed in course of employment:  Employee performing employer authorized actions, or acts closely connected thereto o Businesses not liable for torts committed by independent contractors:  Vicarious liability risk can be shifted by hiring independent contractors instead of employees • Effects of vicarious liability o Victim can sue both employer and employee  Employees are directly liable for their own tort  Employers maybe vicariously liable for employee’s tort • Employer normally entitled to indemnity from employee, however rarely enforced o Employer may also be directly liable if it committed a separate and independent tort  eg careless training of careless employee o • Remedies in Tort o General remedies for torts  Damages (order for monetary payment) • Compensatory damages • Punitive damages • Nominal damages  Equitable remedy: Injunction • Compensatory Damages o Backward-looking  Plaintiff monetarily placed as if tort never occurred • Compare to forward-looking contractual damages  Limitations • Remoteness: unless an intentional tort, no liability imposed if loss not reasonably foreseeable • Mitigation: no liability for losses a plaintiff unreasonably failed to minimize or avoid • Other Remedies o Punitive Damages: punish outrageous, harsh, vindictive, malicious, or reprehensible behavior  In Canada, available only in exceptional circumstances o Nominal Damages: symbolically recognize commission of tort, even though plaintiff suffered no damages o Injunction: order to act or refrain from acting • Alternative Compensation Schemes o Compensation schemes outside of tort law o Compensation based on injury rather than wrong o Paid by central fund rather than tortfeasor o Examples include:  Workers’ compensation schemes (all provinces)  No-fault insurance schemes (some provinces) • Torts vs Alternative Compensation o • Worker’s Compensation o Created because job related injuries are common o Involves a series of trade-offs  Workers normally lose right to sue in tort for workplace injuries, but may claim compensation from a fund  Employers must contribute to liability fund, but escape risk of tort liability for workers’ injuries  Employers may pass liability fund costs to consumers through product and service pricing • No-Fault Automobile Insurance o Compensation normally available regardless of fault  Manitoba and Quebec: No right to sue in tort, but can claim compensation from fund  British Columbia: Right to no-fault exists alongside right to sue in tort  Saskatchewan: Victim chooses tort or no-fault coverage  Ontario: No-fault system prevents tort action unless harm especially serious Week 4: Ch 4: Intentional Torts • Intentional torts o Occur when a person intentionally acts in certain ways, rather than merely acting careless o Meaning of “intention” differs depending on tort:  Some require intention to harm plaintiff (see Chapter 5)  Others require only intention to act a certain way • eg intent to build a fence, whether or not you knew it was on my land (tort of trespass to land) • These torts are examined here in Chapter 4 • Assault o Definition  To intentionally create reasonable belief that offensive bodily contact is imminent o Purpose of tort  Discourages threats and maintains peace • Elements of assault o Reasonable belief of imminent offensive bodily contact:  Reasonable: even if defendant lacked ability (eg unloaded gun)  Belief: Actual bodily contact irrelevant (eg missed punch)  Imminent: distant threat insufficient (eg kick you next week)  Offensive: even if not harmful or frightening (eg threat to punch even if too small to hurt victim) • Battery o Definition  To intentionally create offensive bodily contact o Purpose of tort  Discourage violence and maintain peace • Elements of battery o “Bodily contact” broadly defined o “Offensive” generally excludes normal social interactions  includes actions not harmful (eg unwanted life-saving blood transfusion) o Risk management  To avoid vicarious liability, employers should train employed security personnel to use reasonable force • Assault and battery o Frequently committed together o Occasionally committed apart  Threat of contact without actual contact (assault only)  Actual contact without warning (battery only) • Invasion of privacy o Currently no general tort of “invasion of privacy”  Wish to support freedom of expression and information  Desire to strike fair balance • eg courts reluctant to award damages to celebrities for bad publicity when they seek out good publicity o Losses are often intangible and difficult to quantify  eg embarrassment • indirect protection of privacy o • Developments in privacy law o Some jurisdictions appear to be developing a tort of invasion of privacy o Canadian courts have imposed liability for:  Surveillance camera to monitor neighbour’s backyard  Unauthorized use of photograph in magazine  Unauthorized disclosure of HIV-positive status • Statutory protection of privacy o Crime of voyeurism: s. 162, Canada’s Criminal Code  Secretly observing or recording a person who has reasonable expectation of privacy if nude or in place reasonably expected to be nude, or engaged in sexual activity o Privacy Legislation (eg Privacy Act of BC, Manitoba, and Saskatchewan) • False imprisonment o Definition  Unjustified confinement within a fixed area o Purpose of tort  protects individuals’ freedom of movement • elements of false imprisonment o Unjustified confinement within a fixed area o Unjustified: no consent  eg bus passenger cannot demand unscheduled stop o Confinement: includes physical and psychological o Complete confinement in fixed area: not applicable if alternate path, or plaintiff can easily escape o Without authority to confine, or “make an arrest” • Powers of arrest and detention o Imprisonment may be justified by Criminal Code o o Risk management:  Call police instead of personally arresting suspect  Be cautious of directing police officer to make arrest • Malicious prosecution o Definition  Improperly causing the plaintiff to be prosecuted o Elements of tort  Plaintiff must prove defendant started proceedings • Out of malice or for some improper purpose • Without honest belief in guilt on reasonable grounds, and • Plaintiff was eventually found not guilty of crime • Trespass to land o Definition  Intentional interference with land o Elements of trespass to land  Lack of consent  Lack of legal authority (some public officials have authority) • Trespass to land by customers o Consent and customers  Customers normally have consent to access business during business hours  Businesses may revoke consent for certain customers  Businesses cannot violate human rights when revoking consent • Remedies for trespass to land o Damages: compensatory, nominal, or punitive o Injunction:  Preventing ongoing trespass  Requirement to remove trespassing structure o Removal of Trespassers  Arrest of trespassers  Use of reasonable force in arrest • Interference with chattels o Chattels are moveable forms of property o Category includes several torts o • Trespass to chattles o Definition  Interference with plaintiff’s chattels o Elements of tort  Interference includes taking, destroying, using, and sometimes touching o Remedy  Usually compensatory damages • eg replacing destroyed chattel or repairing damaged chattel • conversion o definition  Interference serious enough to justify forced sale o Remedy  Defendant required to buy chattel at market value at time tort committed • Test for seriousness in conversion o Court considers  Degree of ownership or control exercised by defendant over chattel  Degree of defendant’s intention to assert right inconsistent with plaintiff’s right to chattel  Duration of defendant’s interference  Expense and inconvenience caused to plaintiff • Conversion: risk management o Innocent purchaser of stolen goods may be liable for conversion o Risk management  Use every reasonable effort to ensure vendors have authority to sell to you o Exception to conversion  Does not apply to stolen money • Detinue o Definition  Failure to return chattel plaintiff is entitled to possess o Elements of tort  Normally requires demand by plaintiff for return o Remedy  Usually compensatory damages  Sometimes return of chattel to plaintiff • not available for trespass or conversion • reception o Remedy available for trespass to chattels, conversion, and detinue o Definition:  Re-acquisition of chattel by owner • eg grab item from shoplifter o Risk management  Owner cannot use unreasonable force  Owner risks liability for battery • Defences to intentional torts o Complete defence: Tortfeasor released from all liability o Partial defence: Damages reduced due to plaintiff’s own responsibility for harm o • Defence of consent o Definition  Plaintiff voluntarily agrees to interference with their body, land, or chattels o Consent must be free and informed  eg not valid of plaintiff tricked or threatened o Consent usually revocable, and can be either:  Express (eg surgeon detailed consent for procedure) or  Implied (eg normal hits in hockey game) • Defence of legal authority o Definition  Provides a person a lawful right to act in a certain way o Legal authority may  Arise through common law or  Be provided by statute o Examples  Power of arrest by police officer  Meter readers entering land to perform job duties • Self-defence & third party defence o Definition  Right to protect oneself from actual and threatened violence o Elements  Defence to torts of assault and battery  Available only if person at immediate risk  Cannot use more force than necessary in circumstances o Also allowed to defend third party  eg parent protecting child • limits to defence of property o Self-defence and defence of third party are broadly defined because they protect human life and well-being o Defence of property less generous o Must use only reasonable measures to protect property o If only threat is to land and chattels, may never be reasonable to deliberately cause death or serious injury • Defence of necessity o Definition  Defendant’s actions are justified by an emergency o Elements  Immediate action must be required to avoid calamity  Benefits flowing from conduct weighed against harm • eg doctor giving urgent medical care to unconscious patient • eg tearing down house to prevent spread of fire o Usually a complete defence but sometimes only partial defence o Consider American case:  Emergency caused by storm caused ship to moor to dock  Damage caused to dock during storm  Trespass was justified, however compensation required for damages • Partial defences to intentional tort o Allows court to reduce damages on basis of plaintiff’s own responsibility for injury o Applies even though defendant committed an intentional tort o Includes (among others)  Provocation  Contributory negligence • Provocation o Definition  Words or actions that would cause a reasonable person to lose self- control o Typically, defendant “snaps” after being taunted or insulted o Tied to torts of assault and battery o Defendant liable for attack, but plaintiff’s damages are reduced • Contributory neglicence o Definition  Occurs when plaintiff partially responsible for injury defendant tortiously caused o Damages reduced to reflect plaintiff’s contribution to harm o Elements of the defence differs through Canadian jurisdictions  some divide responsibility on basis of parties’ fault • allows defence to apply to any tort, including intentional o some divide responsibility on basis of parties’ negligence  courts have found the defence difficult to apply to intentional torts as concept of negligence does not naturally fit intentional torts lec 5: ch 5: Miscellaneous Torts Affecting Business • overview o conspiracy o intimidation o interference with contractual relations o unlawful interference with economic relations o deceit o occupiers’ liability o nuisance o the rule in Rylands vs Fletcher o defamation o injurious falsehood • intentional torts o Occur when a person intentionally acts in certain ways, rather than merely acting careless o Meaning of “intention” differs depending on tort:  Chapter 4 torts require mere intention to act a certain way  Some torts require intention to harm plaintiff • Includes knowledge by tortfeasor that injury was reasonably foreseeable • These torts are examined here in Chapter 5 • Conspiracy o Definition  Two or more persons agree to act together with primary purpose of causing plaintiff to suffer financial loss o Aggressive competition by an individual generally fine o Plaintiff must prove  If actions lawful, primary purpose was to hurt plaintiff  If actions unlawful, merely that defendants should have known their actions may hurt plaintiff • Intimidation o Definition  Loss results from threat to commit unlawful act o Plaintiff must prove  threat to break duty in tort, contract, or crime  intimidated party submitted to threat o Plaintiff need not prove defendant intended to cause loss or damage o May involve two or three parties  • Interference with contractual relations o Definition  disruption of contract between plaintiff and another o Risk management  danger in luring away competitor’s customers  danger in luring away competitor’s workers o Forms of interference with contractual relations  direct inducement to breach of contract  indirect inducement to breach of contract • direct inducement to breach contract o Directly cause breach with plaintiff  e.g., convince customer to break agreement, or employee to quit job o Plaintiff must prove  defendant knew about contract  defendant intended to cause breach of contract  defendant actually caused breach of contract  plaintiff suffered loss • indirect inducement to breach contract o Indirectly cause breach with plaintiff  eg prevent employees from going to work, or steal worker’s tools to prevent performance o Plaintiff must prove  same factors as direct inducement  plus defendant’s actions were themselves unlawful • unlawful interference with economic relations o Definition  act intended to cause economic loss to plaintiff o Newly emerging tort: Reach MD vs PMAC o Plaintiff must prove  intent to injure plaintiff (act directed toward plaintiff)  unlawful or illegal act (unauthorized action sufficient)  plaintiff suffered economic loss • deceit o Definition  intentional known misleading statement made with intent to mislead plaintiff which causes loss o Plaintiff must prove  defendant made false statement • includes half-truths, failure to update information, and silence when defendant has duty to disclose  defendant knew statement was false or was reckless in determining truth • elements of deceit o Plaintiff must prove (cont’d)  defendant intended to mislead plaintiff  plaintiff reasonably relied on statement • generally unreasonable to rely on puff, prediction, or opinion  plaintiff suffered loss o Risk management  To avoid liability, business people should not only avoid lying, but also creating the wrong perception • Occupier’s liability o Definition  Requires an occupier of premises to protect visitors from harm • Occupier: person with substantial control of premises • Premises: includes land, ships, trains, planes, elevators, etc • Visitor: any person who enters onto premises o Occupiers’ liability differs across jurisdictions • Occupiers’ liability: traditional common law o Traditionally, occupiers’ obligation varied with type of visitor o • Challenges with traditional rules o Categories are too broad  eg burglar and curious child both trespassers o Difficult to distinguish categories  eg uncertain economic gain: licensee or invitee? o Visitor’s status may change over time  eg unruly customer: from invitee to trespasser • Occupiers’ Liability: Modified common law o Variations between categories eliminated  duty of common humanity to all trespassers  specific duty formulated to reflect facts of case  licensee and invitee generally treated same  Some jurisdictions (Newfoundland and Labrador) require occupiers to use reasonable care toward all lawful visitors • Occupiers’ liability: Statutory law o Six provinces enacted Occupier Liability legislation  Alberta, BC, Manitoba, Nova Scotia, Ontario and PEI o Another (New Brunswick) removed the tort of Occupiers’ Liability, using tort of negligence instead • Statutory changes to occupiers’ liability o Duty applies to condition of premises and activities  Common law applied to condition only o Standard of care no longer related to type of visitor  General requirement to use reasonable care  Some exceptions for adult and other trespassers o Liability can be avoided by issuing warnings o Landlord now liable for failure to repair under lease  no duty at common law because not “occupier” • nuisance o Definition  interference with use and enjoyment of plaintiff’s land o Involves tensions between competing uses of land • forms of nuisance o Physical damage: vibrations cause foundations to crack o Impaired enjoyment: nauseating stench from pig farm o Non-intrusive: brothel attracts traffic and criminals to neighbourhood o Activities not likely to be held a nuisance  Blocking view or sunshine  Ugly building reducing property value • Determining if unreasonable interference o Courts consider a number of factors  nature of neighbourhood  time and day of interference  intensity and duration of interference  social utility of interference  defendant’s motivation • defences to nuisance o Generally interpreted very narrowly  consent to activity  statutory authority • defendant acted pursuant to legislation • nuisance inevitable result of statutory action o Moving to nuisance is not a defence  irrelevant who was in neighbourhood first • remedies for nuisance o Compensatory damages to repair losses o Injunction to prevent future losses  Injunction unlikely if  Damages sufficient to compensate, or  Will create intolerable hardship to defendant or community • eg huge loss due to town’s single factory being closed down o Sometimes injunction and compensatory damages awarded together • Rule in Rylands v Fletcher o Definition o strictly liable for non-natural use of land if something escapes their property and injures plaintiff o Plaintiff must prove  non-natural land use created special and unusual danger  escape from defendant’s land  loss or injury to plaintiff o No need to prove fault or carelessness • Defences to Rule in Rylands v Fletcher o Plaintiff consented to non-natural land use o Unavoidable act of God or third party caused escape o Injury inevitable result of defendant’s exercise of statutory authority o Risk management:  Businesses should take special precautions when engaging in non-natural land use • Defamation o Definition  Making a false statement that could lead a reasonable person to have lower opinion of plaintiff o Purpose: to protect reputations • Elements of defamation o Plaintiff must prove  statement reasonably refers to plaintiff • irrelevant that defendant did not intend reference • plaintiff must be living person • group statement must refer to plaintiff personally  statement could hurt plaintiff’s reputation  statement was published to third party • defamation o Includes any communication (eg spoken, written, gestures, documents, and puppet shows) o Risk management:  Business faces special risk when trying to enhance own reputation by disparaging competitors  Social media presents risks to employers • Vicarious liability for employees’ defamation, and • Directly as potential publisher of defamatory material • Defences to defamation o Include:  Justification  Privilege: encourages free speech • Absolute privilege • Qualified privilege  Fair comment: encourages useful debate on significant issues o Justification: statement is actually true  honest and reasonable belief in truth insufficient • defence: absolute privilege o Complete immunity from liability o No liability even if statement made in bad faith o Limited to statements made:  during parliamentary proceedings  between high government officials dealing with government business  by a judge, lawyer, litigant, or witness in legal proceedings  between spouses • defence: qualified priviledge o Applies when legal, moral or social obligation to make a statement to someone with a similar duty or interest in receiving it o Liability if statement made in bad faith or motivated by malicious purpose o Important application of this defence arises under the label of “public interest responsible journalism” • Defence: Fair Comment o Expression of an opinion on a matter of public importance:  Opinion must be informed  Opinion must relate to issue of public interest  Defence applies as long as the opinion in question could honestly be held by some person – even if the defendant is prejudiced or opinionated • Remedies for defamation o Usually compensatory damages to repair losses and sometimes for personal distress o Sometimes punitive damages for outrageous conduct o Injunction to prevent defamation  rarely awarded due to concern for free speech  requires clear evidence that defamation is likely • injurious falsehood o Definition  false statement about a business causes loss to business o Tort may take variety of forms  Slander of Title: false statements that plaintiff does not own land, making sale difficult  Slander of Quality: false disparagement of plaintiff’s products  Other false statements: eg that property haunted • Elements of injurious falsehood o Plaintiff must prove  defendant made false statement to third party  defendant acted out of malice  persuasive evidence that false statement caused loss Chapter 6: Negligence • overview o Duty of care o Breach of the Standard of Care  Professional negligence  Product liability o Causation of Harm o Defences  Contributory negligence  Voluntary assumption of risk  Illegality • tort of negligence o Definition  Careless causing of injury to the plaintiff o Most important tort of all o Negligence requires a balancing of social values, else individuals would not engage in useful but risky activity  compensation for carelessly caused harm  encouragement of socially useful activities  flexibility arises at each stage of analysis • elements of negligence o To succeed with negligence claim, plaintiff must prove  Duty of care was owed to plaintiff  Tortfeasor breached of standard of care  Breach of standard caused harm to plaintiff o Defendant may then avoid liability by proving  Contributory negligence  Voluntary assumption of risk or  Plaintiff injured during illegal behaviour • Negligence Element 1: Duty of Care o A duty of care exists if defendant is required to use reasonable care to avoid injuring plaintiff  duty of care exists: defendant may be liable  no duty of care: defendant not liable for negligence • determining existence of duty of care o First, look to the Common Law for precedent o If no precedent, apply following test:  Was it reasonably forseeable that plaintiff could be injured by defendant’s action?  Was there sufficient proximity between parties? • Special rules apply to careless statements  If yes to first two questions, should duty be denied for policy reason? • Reasonable foreseeability o Objective test  “would reasonable person have foreseen risk of loss?” • sufficient if not far-fetched (even if not probable) o Purpose of requirement: fairness  unfair to hold defendant liable for every loss • impossible to prevent unforeseeable event  unfair to deny liability for subjective deficiencies • plaintiff entitled to expect reasonable conduct • proximity o Proximity means close and direct connection, including  Physical: eg hit by swung baseball bat  Social: eg bond between parent and child  Commercial: eg alcohol sold to driver  Direct causal connection: eg loss occurred directly related to careless activity  Reliance: eg continuing an initial voluntary activity that people have come to rely on • Proximity and careless statements o Negligent statement: common business risk  increasingly based on information o Careless statements differ from careless actions:  need for precaution less clear with words • “words are more volatile than deeds” • words more likely to cause pure economic loss o Courts apply special rules when determining existence of duty of care related to statements o Liability more likely if  defendant claimed special knowledge  statement communicated on serious occasion  statement made in response to inquiry  defendant received financial benefit  statement of fact rather than pure opinion o Liability less likely if  statement accompanied by disclaimer o Test for duty of care existing for statements  Defendant knew that plaintiff, either individually or as member of defined group, might rely on statement, and  Plaintiff relied on the statement for its intended purpose o Risk management  Be careful about providing information and advice  Use disclaimers  Be careful relying on statements made by others • Duty of care and policy  Sometimes hard to distinguish proximity from policy  proximity: focus on parties’ relationship  policy: focus on effect existence of duty would have on society and legal system.  Courts ask if recognition of duty would: • open the floodgates • Interfere with political decisions • Hurt a valuable type of relationship • Examples of policy’s effect on duty o No duty of care on mother to unborn child  fear of intolerable burden on pregnant women o No duty on employer for carelessly causing employee mental distress on the job  Would be a considerable intrusion into the workplace o No duty on regulatory bodies for careless professionals  Floodgates would open, and political and judicial interference • Negligence Element 2: Breach of Standard of Care o Standard of care: how defendant with duty must act  liability possible only if standard of care breached o Standard of care based on reasonable person test  “how would a reasonable person act in this situation?”  objective test • defendant cannot hide behind own deficiencies • plaintiff entitled to expect reasonable conduct • standard applied at time of alleged breach (no hindsight) • Formulation of Standard of Care o Reasonable person adjusts conduct to situation  reasonable foreseeability of risk: • any realistic risk may require precaution • • Standard of Care for Professionals o Standard is higher than mere reasonable person  must act as reasonable professional  no allowance for inexperience  no allowance for exaggerated credentials o Standard may be higher still for specialist or expert  eg must act as a reasonable expert would act • Limits to professional standard o Unfair to judge reasonableness using hindsight o Errors of judgment are different than carelessness o Compliance with approved practice may remove liability (unless approved practice itself is careless) o Compliance with a statutory standard may also protect a defendant • Standard of care: product liability o Injury caused by manufactured products  American courts, product liability uses strict liability • manufacturer liable for any defects  Canadian courts use negligence • manufacturer liable only for careless defects o In product liability actions, easy to prove duty is owed, so case usually turn on whether standard was breached • Standard: product liability o Types of product liability  careless manufacture of specific item • liability is likely to be imposed  careless design of product line • widespread issue: narrower scope of liability based on balancing  careless failure to warn of risk of harm • specific requirement reflects circumstances • manufacturer, seller, or installer may be liable • “learned intermediary rule” in appropriate situations • Negligence element 3: causation of harm o Liability only if breach of standard caused loss o Causation involved a two-step inquiry  step 1: factual causation, primarily question of fact • the but-for test  step 2: legal causation, primarily question of fairness • the remoteness principle o no liability – even if factual causation – if unfair • causation: step 1 o General approach: but-for test  If the defendant had not acted carelessly, would the plaintiff still have suffered the same loss? • if yes: defendant did not cause loss, so not liable • if no: defendant did cause loss, so may be liable • causation: step 1 rules o Proof on balance of probabilities (at least 51%) o All-or-nothing approach: full compensation if probable causal connection, none if not o Breach was a cause – not necessarily only cause o Several defendants may cause single injury  joint and several liability to plaintiff  proportionate contribution between defendants o Alternative test if but-for test creates injustice • Causation: Step 2 Remoteness o Even if defendant caused harm, no liability if loss was too remote  reasonable foreseeability of harm • sufficient if not far-fetched (even if not probable)  reasonable foreseeability to type of harm is relevant • not whether the manner in which harm occurred was not reasonably foreseeable • thin skull principle o Thin skull refers to those unusually vulnerable to loss o The rule: if some harm reasonably foreseeable to normal person, thin skull person entitled to full recovery  some harm reasonably foreseeable • plaintiff can recover for entire injury  if no harm reasonably foreseeable • plaintiff cannot recover for any part of injury • remoteness and intervening acts o Intervening act is an event occurring after defendant’s carelessness that causes subsequent harm o The rule: liable if foreseeable chain of events  eg patient infected while in hospital for surgery • defendant liable for injury requiring surgery • defendant also liable for foreseeable infection  eg patient struck by lightning in hospital parking lot • defendant liable for injury requiring hospitalization • defendant not liable for unforeseeable accident • defences o Duty + breach of standard + causation of loss = presume liability o Defendant may limit or avoid liability through defence o Most important negligence defences  contributory negligence  voluntary assumption of risk  illegality • contributory negligence o Basis: loss is caused partly by defendant and partly by plaintiff’s own carelessness  forms of contributory negligence include unreasonably entering into dangerous situation, contributing to creation of accident, or contributing to extent of injury o Effect of defence  apportionment of responsibility  damages reduced to reflect plaintiff’s contribution • voluntary assumption of risk o Basis: plaintiff freely accepted both physical and legal risk of injury (gave up right to sue for injury) o Effect of defence  complete defence (not merely apportionment)  courts interpret this narrowly because of harsh result o Risk management  consider proper use of effective exclusion clauses (see Chapter 9) • illegality o Basis: plaintiff injured while engaged in illegal activity o Defence applies only when plaintiff’s claim undermines integrity of legal system, which occurs when  plaintiff tries to profit from wrongdoing  plaintiff tries to escape criminal penalty o Effect of defence  Complete defence (not merely apportionment)  Courts interpret narrowly because of harsh result Chapter 7: • Overview o Comparing torts and contracts o Intention to create legal relations o Offer o Acceptance • Intro to contracts o Contract is a legally enforceable agreement o Promises and contracts  simple promise is not legally enforceable  contractual promise is legally enforceable o Essential elements of a contract  intention to create legal relations  meeting of the minds (offer and acceptance)  exchange of value (consideration)  capacity and legality • torts and contracts o Both involve primary and secondary obligations  Breach of primary obligation creates secondary duty • Tort: o Primary duty: do not harm another o Secondary duty: compensatory damages • Contract o Primary duty: fulfill your promises o Secondary duty: compensatory damages o • Intention to create legal relations o Parties must intend to create legal relations o Objective test of intention  what would a re
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