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ADMS 2610 (409)


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York University
Administrative Studies
ADMS 2610
Robert Levine

ADMS2610 Session 2 Chapter 9 (pg. 162-170) Requirement of Legality Two Types of Corporations - Regular Corporations o Same powers as a natural person o Limitations through internal bylaws (articles of incorporation) are not public knowledge but may in certain cases bind the public - Special Act Corporations o Powers controlled by Special Act o Limitations are public knowledge because they are contained in a statute Ultra Vires (an act that is beyond the legal authority or power of a legislature or corporate body) - Special Act Corporations o Not bound by contracts that are ultra vires - Regular Corporations o Bound by contracts that are ultra vires—Internal Management Rule Labour Unions - Ability to enter into contracts (collective bargaining agreements) allowed under labour legislation o Normally would be unenforceable (restraint of trade) Bankrupt Persons - Declared bankrupts have limited capacity to contract - Until receipt of a discharge, the person may not enter into any contract except for necessaries Requirement of Legality - Contracts that offend public good are unenforceable - Contracts whose purpose is illegal, may be illegal are enforceable - Some contracts are only rendered voidable by public policy or by specific statutes o Voidable if the parties do not comply with statute or the policy Legality under Statute Law - Generally o Illegal contracts is an agreement to commit a crime (rob, assault, abduct, murder, steal goods)  If two parties agreed to rob a bank, it would be an illegal contract and subject to criminal penalties as a conspiracy to commit a crime, even if the robbery did not take place o Embezzlement is when a crime is discovered by an employee, promises the employer not to report the crime for restitution (money) - Competitions Act o Statue law renders illegal any contract or agreement between business firms that represents a restraint on competition  It is unenforceable  Act covers a number of business practices contrary to public policy - Administrative Acts o Statue law and other criminal law may render illegal contracts and can be unenforceable o Agreements to void Workers Compensation, land use planning or wagering laws (made in violation of the Act void and unenforceable) - Insurance Policies o Wager (bets) are unenforceable contacts as a general rule o Exception is insurance contracts such as life insurance o Requires an insurable interest  Distinguishes insurance contracts from normal wagers - Unlicensed Persons o Contracts with unlicensed trades or professions are illegal o Purpose is to protect the public o Must still pay for goods supplied but not for services rendered o Only voidable at option of party who is not the tradesperson or professio
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