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Department
Law and Business
Course
LAW 122
Professor
anon
Semester
Winter

Description
Business Law - Law 122 Chapter 1 Why Study Law? • For Business Students  Goal of a business = maximize gains and minimize losses  Business must make choices, and every choice has legal consequences  Difference between winning & loosing depends on business’s ability to make the right decisions from a legal perspective  Law can hurt and help any business Risk Management • The process of identifying, evaluating and responding to the possibility of harmful events  Identification • Recognizing the legal risks • Ask yourself: “Can we be held liable for doing something wrong?”  Evaluation • Assessment Of Legal Risk • Ask yourself: “What are the chances of something going wrong?”  Response • Reaction to legal risk • Ask yourself: “What are we going to do about it?” Forms of Risk Management • Risk Avoidance  Elimination of risk  Withdraw dangerous products from the market • Risk Reduction  Minimizing risk  Modify products to reduce the danger • Risk Shifting  Making the risk another person or business’s problem  Buy liability insurance for losses caused by danger • Risk Acceptance  Choosing to live with the risk  do nothing about it Management of Legal Risks Low Costs High Costs Low Risk Risk Shifting Probability Acceptance High Risk Reduction Risk Probability Avoidance Concepts • 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 (e.g. ability Insurance  provides benefit if the purchaser is held liable for doing something wrong) • Exclusion Clauses  Changes the usual rules of liability (e.g. A courier company may provide notice that it will not be held liable for fore than $100 if a package is lost, damaged, or destroyed.) • Incorporation  A company that sets up as a corporation = incorporation  Limited Liability - if something goes wrong, it is usually only the company itself, and not the people who run it, that may be held liable  the company may be lost, but the people behind it are safe The Nature of Law • Laws – rules that can be enforced by courts  All laws are rules but not all rules are laws Interpreting the Law • Textual Approach:  Wording of the law  each word is given its plain meaning & there’s no need to look outside the document. • Purposive Approach:  Legislature’s intention  first determine the statute’s purpose; then read the law in a way that best 1 of 37 achieves that purpose. A Map of the Law • Division between public law and private law  Public law: matters of public concern  Private law: matters of private concern • Public Law  Constitutional Law • Provides basic rules for legal and political systems • Difficult to amend o Amending formula requires the consent of both the parliament and 2/3 of all provinces and territories with at least 50% of the population • Highest source of law o Law is inconsistent with the Constitution  no force or effect • Section 52 of the Constitution  Administrative Law • Concerned with the creation and operation of administrative agencies and tribunals • Profound impact on business  Criminal Law • Deals with offences against the state  Tax Law • Concerned with the rules that are used to collect money for public spending • Private Law  Tort law • Rules governing wrongs against persons  Contract law • Rules governing creation and enforcement of agreements  Property law • Rules governing acquisition, use, and disposition of property A Map of the Law Overlap  1 event can trigger more than one set of results  Some situations involve various types of laws Morality and Law 2 of 37 • Moral wrongs may be informally sanctioned  E.g. loss of friendships or damaged reputation • Legal wrongs are formally sanctioned  E.g. imprisonment or payment of damages Sources of Law • Constitution  Provides basic rules for legal and political systems  Difficult to amend • Amending formula requires the consent of both the parliament and 2/3 of all provinces and territories with at least 50% of the population  Highest source of law • Law that is inconsistent with the Constitution has no force or effect  Section 52 of the Constitution  Division of Power • Federal o Composed of 2 parts  House of Commons (elected MPs) and the Senate (appointed) • Provincial and Territorial o Legislative Assembly – elected body • Legislation  Laws created by Parliament or legislature • Statutes, regulations, by-laws, etc  Legislative process • Introduced as “bill” • Majority support through series of “readings” • Finalized by “royal assent”  Subordinate legislation • Created under Parliament’s or legislature’s authority • Example of municipality o Province creates municipality o 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) Common Law • Meanings of “common law”  System: legal system inherited from England  Compare: civil law inherited from ancient Rome • Sources: rules made by judges  Compare: rules made by legislators  Compare: rules made by constitutional drafters  Systems trace their history to England • All of Canada, except Quebec, have a Common Law jurisdiction  Quebec has a Civil Law jurisdiction  Civil Law • Systems trace their history to ancient Rome Common Law and Equity  Historical developments o Phase I: Law  Only one set of courts in England  Rules often rigid and harsh o Phase II: law and equity  Law supplemented by equity  Separate courts, judges, and rules o Phase III: fusion  Law and equity combined into single court  Ongoing rationalization of legal and equitable rules  Equity o Nature of equity  Traditional equity 3 of 37 • 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 Chapter 2 – Litigation and Alternative Dispute Resolution . Court System  The Supreme Court of Canada  Court of Appeal (for each province)  Provincial Court  Federal Courts o Tax Court o Trial Division o Appeal Division The Doctrine of Precedent  Court hierarchy  courts are arranged according to importance.  The doctrine of precedent requires a court to follow any other court that is above it in a hierarchy.  Supports the rule of law: it guarantees that disputes will be settled on the basis of laws, not personal opinions The Legislation Process  Litigation  dispute resolution in court  it is rare  Very few cases are decided by judges in court  Risks of litigation o Unpredictable o Expensive o Time consuming o Frequently fatal to business relationships Alternative Dispute Resolution  Types of ADR o Negotiation  Negotiation  discussions between parties 4 of 37  Negotiation process • No intervention by third party • No guarantee of binding resolution o Mediation  Mediation = discussions through mediator  Mediation process • Mediation usually voluntary • Parties choose the mediator • Mediator suggests resolution o Either party may reject mediator’s suggestion o Mediator’s decision non-binding o Arbitration  Arbitration = dispute resolved by arbitrator  Arbitration process • Arbitration often required by prior contract • Arbitrator imposes decision on parties o Process similar to trial court o Decision usually binding and enforceable o Decision often cannot be appealed Who Can Sue and Be Sued  Human beings o General rule  Any person can sue or be sued o Variation  Person who lacks legal capacity can sue or be sued but must act through a representative  Child  Adult with mental disability  Organizations o Corporation  A type of legal person: generally can sue or be sued o Unincorporated association  Not a type of legal person • Generally cannot sue or be sued • Exception: trade unions generally can sue and be sued  Governments o General rule: “The King can do no wrong” o Statutory authority required to sue government  Statutes are broad but often complicated Pleadings  Documents identify and clarify dispute o Drafted by party o Issued by court o Served on opposing party  Parties o Plaintiff = person making complaint o Defendant = person being complained about  Statement of claim o Used by plaintiff to start claim  Some provinces use writ before statement of claim o Outlines dispute and states desired remedies  Statement of defence o Used by defendant to deny facts or liability  Counterclaim o Used if defendant wants to claim against plaintiff in same proceedings  Statement of defence to counterclaim o Denial of facts or liability in counterclaim  Reply o Used by plaintiff to dispute contents of statement of defence  Demand for particulars o Used by either party to demand additional information Trial  Judge and jury o Jury is common in criminal cases 5 of 37 o Jury is rare in civil litigation  Evidence o Information provided by witnesses  Ordinary and/or expert witnesses o Hearsay evidence usually inadmissible Remedies in Litigation  Compensatory damages  Specific performance  Punitive damages  Injunction  Nominal damages  Rescission Appeals  Parties  Appellant = party disputing decision below  Respondent = party supporting decision below  Appeal process  No new witnesses or evidence  Focus on law rather than fact, unless there is a palpable and overriding error in decision below Chapter 3 – Introduction to Torts Introduction to Torts  Tort  wrongdoing in private law o French tort  wrong o Latin tortus  twisted or crooked  Tortfeasor  person who commits a tort  Tort  private wrong o breach of obligation to a person o claim by individual plaintiff o usual remedy of compensatory damages  Crime  public wrong o breach of obligation to society o prosecution by Crown o usual remedy of punishment  Tort and crime: overlap o Same event may be both tort and crime o E.g. beating = battery (tort) + assault (crime) Tort and Breach of Contract  Structural similarity o Breach of primary duty creates secondary duty o Tort  Primary duty = do not harm another  Secondary duty = compensatory damages o Contract  primary duty = fulfill promise  secondary duty = compensatory damages  Source of primary obligations o Tort  Imposed by law based on circumstances o Contract  Voluntarily created by parties  Typical compensation o Tort  Backward-looking damages  Place plaintiff as if tort never occurred o Contract  Forward-looking damages  Place plaintiff as if promise fulfilled  Example o Pippa agreed to buy a pizzeria from David. During the negotiations that up to that contract, David said a 6 of 37 number of things about the restaurant’s profitability. If those statements were true, Pippa would have received a net profit of $80,000 on her investment. In fact, as David knew, the business was actually far less profitable than he had said. o As a result of relying on David’s statement, Pippa lost $65,000 on the purchase. David admits that he is liable for both breach of contract (because his promises were untrue) & the tort of deceit (because he lied to Pippa).  Risk management o Tort  Imposed obligations tougher to manage o Contract  Voluntary obligations easier to manage Types of Torts  Torts require balance of competing interests o Protecting free choice vs. deterring harmful behaviour o Encouraging innovation vs. compensating for losses o Physical harm vs. economic loss  Torts differ on basis of mental culpability o Intentional o Negligence o Strict liability  Intentional torts o Intention = liability for deliberate act  Deliberate performance of prohibited act • Protect valuable interests (e.g. battery, false imprisonment)  Deliberate infliction of harm • Protect financial interests from purposeful harm (e.g. inducing breach of contract, intimidation)  Negligence torts o Negligence = liability for careless behaviour  Balance freedom of action and freedom from harm • Activity permitted if reasonable in circumstances (e.g. negligence, nuisance, occupiers’ liability)  Strict liability o Liability without intention or negligence  Liability based on responsibility for prohibited event • But subject to defence of voluntary assumption of risk o Restricted to unusually dangerous activities  Activity permitted but liability for any harm • E.g. ownership of wild animals, Rylands vs. Fletcher Liability Insurance  Risk management issue o Tort duty (unexpectedly) imposed by law  Liability insurance contract o Insured pays price (premium) for protection o Insurer protects insured against harm  Duty to defend claims against insured  Duty to indemnify insured for loss if liable  Example o The plaintiff, a young teenager, worked in a corner store that was located at at the end of a city bus line. The defendant, a bus driver, sexually abused her on a number of occasions. She later sued him for battery. He claimed coverage under his liability insurance policy. His insurance company rejected the claim by pointing to a clause in that contract that excluded coverage for injuries inflicted through “intentional or criminal acts.”  The Supreme Court of Canada held that the defendant was not protected by his insurance policy because he had committed the tort of battery with the intention of injuring the plaintiff.  Does not cover “intentional and criminal acts.”  Effects of liability insurance on tort law o Enhances compensatory function 7 of 37  Tort victim more likely to receive money o Undermines deterrence function  Insured less concerned about wrongdoing Vicarious Liability  Vicarious liability = being liable for another’s torts  Common business risk o Employer often vicariously liable for employee  Scope of vicarious liability in employment o Vicarious liability for some employee torts  No vicarious liability for independent contractor • Employee vs. independent contractor: difficult distinction o Vicarious liability for some employee torts  Employer-authorized acts  Acts closely connected to employer-authorized acts  Effects of vicarious liability o Victim can sue employee and employer  Employee directly liable for own tort  Employer vicariously liable for employee’s tort o Employee generally liable to employer  But employer’s right seldom enforced  Justifications for vicarious liability o Enhances compensatory function o May enhance deterrence function o Fairness: business bears cost of operation  Example o The defendant was a charitable organization that operated a residential care facility for troubled children. It employed a number of people, including a man called Curry, to act as substitute parents (for example, by bathing children and putting them to bed at night). Although the defendant conducted a reasonably thorough investigation before hiring Curry, it failed to discover that he was a pedophile. Sadly, Curry sexually assaulted a number of children, including the plaintiff, within the defendant’s facilities. The plaintiff sued the defendant organization on the basis that it was vicariously liable for Curry’s actions.  The Supreme Court of Canada held that an employer is vicariously liable for both (i) acts that it authorized an employee to do and (ii) other closely related acts. The court held that Curry’s actions fell within the second category. While recognizing the employer certainly did not want its employees to sexually abuse the children, the court held that the nature of the employer’s operation increased the risk of wrongdoing. Remedies in Tort  General remedies for torts o Compensatory damages o Punitive damages o Nominal damages o Injunction  Damages = order for monetary payment o Compensatory damages  Backward-looking • Plaintiff monetarily placed as if tort never occurred o Compare contract (forward-looking damages) o Mitigation  Limited liability if some of the loss could have been reasonably avoidable by plaintiff o Punitive damages  Punish outrageous or reprehensible behaviour o Nominal damages  Symbolically recognize commission of tort • Awarded for some torts if plaintiff suffered no loss o Injunction (non-monetary award)  Order to do or refrain from doing something Tort Law and Alternative Compensation Schemes  Alternative compensation schemes o Sources of compensation outside of tort law 8 of 37  Compensation based on injury rather than wrong  Paid by central fund rather than Tortfeasor  Examples o Workers’ compensation schemes (all provinces) o Automobile accident schemes (some provinces) Chapter 4 – Intentional Torts Introduction  Intentional torts involve intentional, rather than merely careless, conduct --> some intentional torts are o Assault o Battery o Invasion of privacy o False imprisonment o Trespass to land o Interference with chattels Assault and Battery • Assault – occurs when defendant intentionally causes the plaintiff to reasonably believe that offensive bodily contact is imminent  Not based on physical contact  based on reasonable belief that such contact will occur  It is enough if the plaintiff reasonably believed that bodily contact would occur  Plaintiff must have believed that bodily contact was imminent  An assault can occur even if the plaintiff was not frightened  offensive contact is enough • Battery – consists of offensive bodily contact  “Bodily contact” is not strictly applied – it is enough if the defendant causes something (knife or bullet) to touch the plaintiff  it is also enough if the defendant makes contact with the plaintiff’s clothing or something they are holding  Not every form of contact is offensive  normal society interaction is allowed  Contact may be offensive even if it isn’t harmful 9 of 37 Invasion of Privacy • There is no general tort of invasion of privacy (IOP) • Several reason why courts are reluctant to recognize a tort of IOP  They want to support freedom of expression and freedom of information  Concerned about defining the concept of privacy in a way that strikes a fair balance between parties  Reluctant in awarding damages to celebrities who seek out publicity but complain when they’re shown in bad light  Difficult to calculate compensatory damages for things, such as embarrassment, that IOP causes • Privacy is indirectly protected by several torts  Trespass to Land  Breach of Confidence  Abuse of Private Information  Misappropriation of personality  Negligence False Imprisonment • Occurs when a person is confined within a fixed area without justification  An actual prison is not necessary  confinement must be practically complete  Physical force is not necessary – the detention may be psychological  Because a police officer has a wider power of arrest than a private citizen, a business person may reduce the risk of liability by calling a police officer, instead of directly arresting a suspect. That tactic will not, however, eliminate the risk. The business may be held liable if it directed the officer to make the arrest, rather than merely state the facts and allow the officer to draw a conclusion  Malicious Prosecution – occurs when the defendant improperly causes the plaintiff to be prosecuted • Difficult to prove – court has to be satisfied that: o The defendant started the proceedings o Out of malice, or for some improper purpose o Without honestly believing on reasonable grounds that a crime had been committed, and o The plaintiff was eventually acquitted of the alleged crime • The defendant will not be held liable if the plaintiff agreed to be confined  Consent is a complete defence to all intentional torts • An imprisonment is false only if it is done without authority  basic rules found in the Criminal Code Trespass to Land • Trespass to Land (TTL) – when the defendant improperly interferes with the plaintiffs land  interference can take several forms • TTL is not committed by a person who has legal authority to be on a property ( e.g. search warrant) • TTL does not occur merely because a customer walks into a place of business during regular hours  A business can revoke consent to invite a certain customer into its place of business as long as it doesn’t violate the human rights legislation • The owner of a racetrack may exclude a highly successful gambler • Remedy  Compensation of the harm caused  Nominal damages – if there was loss  Punitive damages – of the defendants conduct was shockingly bad  If the defendants wrong is ongoing, the plaintiff may be entitled to an injunction to stop the trespass Interference with Chattels • Chattels – moveable forms of property (horses, books, cars etc.) • Trespass to Chattels  Occurs when the defendant interferes with chattels in the plaintiff’s possession  Interference is satisfied if the defendant damages, destroys, takes or uses the plaintiff’s goods  Remedy  compensation for loss • Conversion  Occurs when the defendant interferes with the plaintiffs chattels in way that is serious enough to justify a forced sale  Difficulty with the tort of conversion is that it is often too difficult to know whether the defendant’s actions are serious enough to justify a forced sale  courts include all of the facts, including (listed on page 87) 10 of 37  Remedy  forced sale of chattel from plaintiff to defendant • Detinue  Occurs when the defendant fails to return a chattel that the plaintiff is entitled to possess  Detinue – derived from French word “detenue” meaning detention  The tort is based on wrongful detention  It is the only tort that allows a court to order the defendant to return a chattel to the plaintiff  Recaption - allows a person to take their own property back Chapter 5 – Miscellaneous Torts Affecting Business Intimidation • Concerned with unethical business practices • Intimidation – occurs when the plaintiff suffers a loss as a result of the defendant’s threat to commit an unlawful act against either the plaintiff or a third part  2 branches  Two-part intimidation – occurs when the defendant directly coerces the plaintiff into suffering a lose  Three-party intimidation – occurs when the defendant coerces a third part into acting in a way that hurts the plaintiff • The basic rules are the same for either branch:  The plaintiff must prove that the defendant threatened to commit an unlawful act  The tort does not occur unless the threatened party gave into the intimidation  As long as the other elements of the tort are established, there is no need to prove that the defendant intended to hurt the plaintiff Interference with Contractual Relations • Occurs when the defendant disrupts a contract that exists between the plaintiff and a third party • Basic process that underlies both forms of the tort:  Direct Inducement of Breach of Contract • Occurs when the defendant directly persuades a third party to break its contract with the plaintiff • Liability requires 4 factors 11 of 37 o The defendant must know about the contract existing between the plaintiff and 3 party rd o The defendant must intend to cause the 3 party to breach that contract o Defendant must actually cause the 3 party to break the contract with the plaintiff rd  If defendant informs 3 party about advantages and disadvantages of working for the plaintiff, the judge will be forced to analyze the situation further & ask whether the defendant actually encouraged the 3 party to commit a breach of contract o The plaintiff must suffer a loss as a result of the defendant’s conduct  Indirect Inducement of Breach of Contract • Occurs when the defendant indirectly persuades a 3 party to break its contract with the plaintiff • Liability depends on the same above 4 factors Unlawful Interference with Economic Relations • Unlawful interference with economic relations occurs if the defendant commits an unlawful act for the purpose of causing the plaintiff to suffer an economic loss Name of Tort Unlawfulness Intent to harm Conspiracy Defendant’s act may be lawful or Lawful act – hurting plaintiff must be unlawful defendant’s primary purpose Unlawful act – hurting plaintiff must be foreseeable Intimidation Defendant must threaten unlawful Defendant’s act must be directed at act plaintiff but hurting plaintiff doesn’t need to be the defendant’s primary purpose Interference with Contractual Relations Indirect inducement of breach of Defendants act must be direct at the contract – defendant’s act must be plaintiff but hurting the plaintiff unlawful doesn’t need to be the defendant’s Direct inducement of breach of primary purpose contract – defendant’s act may be lawful or unlawful Interference with Economic Relations Defendant’s act must be unlawful Defendant’s act must be directed at or unauthorized plaintiff but hurting the plaintiff doesn’t need to be the defendant’s primary purpose Deceit • Occurs if the defendant makes a false statement, which it knows to be untrue, with which it intends to mislead the plaintiff, and which causes the plaintiff to suffer a loss  4 parts to this definition  The defendant must make a false statement • Defendant may be held liable for half-truth  if I am selling my business to you, I may present figures representing gross profits, as if they reflect net profits • Defendant may be held liable for failing to update information • General rule – commercial world is caveat emptor (let the buyer beware) o Seller is usually not obliged to volunteer information  The defendant must know, at the time of making a statement, that it is false  The defendant must make the statement with the intention of misleading the plaintiff  The plaintiff must suffer a loss as a result of reasonably relying upon the defendant’s statement • Remedies  The plaintiff is entitled to be put into the position that it would have enjoyed if the defendant had not lied, not into the position that it would have enjoyed if the defendant’s statement had been true Occupier’s Liability • Requires an occupier of premises to protect visitors from harm  Occupier – any person who has substantial control over premises  Visitor – any person who enters onto premises  Premises – include more than land • Scope of occupier’s is wide and potentially dangerous for business people • Law of occupier’s liability is complicated  considered separately  The common law rules (made by judges)  The statutory rules )made my legislators) Common Law Rules • Problems with traditional system of occupiers’ liability  It can lump together different types of people 12 of 37  Difficult to distinguish between the different categories  Visitor’s status may change from one moment to the next  Difficult to decide whether a danger is hidden or unusual • Because of those problems, jurisdiction moved away from categorizing visitors and toward increasing the occupiers’ obligations  An occupier must do more than simply refrain from intentionally of recklessly hurting a trespasser  Licenses and invites are now generally treated the same  occupier must protect them both from unusual and hidden dangers  The courts in Newfoundland have gone even further, an occupier in that province is required to use the reasonable care toward all lawful visitors Statutory Rules • Because of the problems with common law, 6 provinces enacted legislation to govern occupier’s liability • Statutes vary somewhat between jurisdictions, but the basic rules are the same • Differences between statutory rules and common law are:  Common law generally applies only to dangers that are created by the condition of the premises where as the legislation also applies to activities that occur on the premises  General rule – the standard of care no longer depends upon a visitor’s classification • An occupier must use reasonable care, which depends upon a number of factors, including: o Potential dangers o Removing the danger o Purpose of the visit o Nature of the premises  All the above are exceptions to the general rule  The statutes generally allow an occupier to avoid liability by issuing a warning  Common law – a landlord generally cannot be held liable for injuries that a person suffers while visiting a tenant  primary reason is that a landlord has ownership, but not control over the premises = not an occupier • Legislation – a landlord may be held liable to a visitor if it fails to make repairs under its lease with the tenant Nuisance • Tort of nuisance involves land (page 105)  Occurs when the defendant unreasonably interferes with the plaintiff’s use and enjoyment of its own land  Occurs if the defendant interferes with the plaintiff’s use of its land  Occurs if the defendant creates a smell or sound that impairs the enjoyment of the plaintiff’s property  Non-intrusive nuisance – without causing anything to travel onto the plaintiffs property  Certain types of activities generally will not support a claim in nuisance • Nuisance occurs only if the defendant’s interference is unreasonable  courts will look at a number of factors  The most important – nature of the interference  Nature of the neighbourhood  Time and day of the interference  Intensity and duration of the interference  Social utility of the defendant’s conduct  Defendant’s motivation • Defence to Nuisance  There are several defences but are interpreted very narrowly  Defence of statutory authority  the defendant caused a nuisance while acting under legislation • Applies only if the defendant’s nuisance was an inevitable result of the statutorily authorized activity • Remedies for Nuisance  Compensatory damages and injunctions • Compensation – general rules apply • Injunctions – more complicated o A judge will usually grant one to stop a nuisance o At times, courts may refuse an injunction  True if the nuisances causes relatively little damage to the plaintiff & if damages can provide an adequate remedy o Courts sometimes award both compensatory damages and an injunction  Damages take care pf past losses and the injunction prevents harm in the future 13 of 37 The rule in Raylands vs. Fletcher • R vs. F – defendant can be held strictly liable for its non-natural use of land if something escapes from its property and injures the plaintiff  The defendant must have made a non-natural use of its land • Use of land that creates a special danger; or the defendant must create special/unusual damages  Something associated with a non-natural use must escape from the defendant’s land & cause the plaintiff to suffer a loss  Most torts are based on some form of fault • The rule in R vs. F is strict  defendant may be held liable even if it acted as carefully as possible • Defences  Plaintiff may have consented to the defendant’s non-natural use of land  The escape may have been caused by a 3 party or a natural force that the defendant had no control over  Plaintiff’s injury may have been the inevitable result of an activity that the defendant was statutorily authorized to do Defamation • Occurs when the defendant makes a false statement that could lead a reasonable person to have a lower opinion of the plaintiff • The defendant’s statement is defamatory only if a reasonable person would have thought that it referred to the plaintiff  requirements are quite broad  Can be satisfied even if the defendant didn’t intend to refer to plaintiff  purpose is to protect reputations  Claim can be made by any sort of living person (humans and corporations)  Difficult to prove if the defendant made a statement about a group of individuals  e.g. I cannot sue you for saying “all lawyers are crooks” • Slander – defamatory statement that is spoken • Libel – defamatory statement that is written • Defamation can occur through any sort of communication • Almost any uncomplimentary statement can be defamatory, as long as it could hurt the person’s reputation • There cannot be defamation without publication  Publication – occurs when a statement is communicated to a third party • Defences  Justification • Occurs if the defendant’s statement is true  Privilege (page 110) • Privilege – An immunity from liability  takes 2 forms: o Absolute privilege – provides complete immunity  Applies even if defendant knowingly made a false statement for malicious purpose o Qualified privilege – applies whenever the defendant has a legal, moral or social obligation to make a statement and the statement made to someone who had a similar duty or interest  Both elements must be satisfied  Fair comment • Intended to encourage useful debate on significant social issues • It is an honest expression of an opinion regarding a matter of public importance  requirements: o Intended to protect informed opinions o The defendant’s opinion must concern an issue of public interest  defence doesn’t allow personal attacks on their private lives o A comment is not fair unless it was honestly held o The defence of fair comment is not available if the defendant would be defamatory • Remedies  Usual remedy  compensation  Punitive damages  if defendant was particularly outrageous  Injunctions in truly exceptional cases to prevent a person from even making a statement  but only if it is clear that the statement would be defamatory Injurious Falsehood • Occurs when the defendant makes a false statement about the plaintiff’s business that causes the plaintiff to suffer a loss  variety of forms  Slander of Title  the defendant may falsely say that the plaintiff does not own a particular piece of land, 14 of 37 therefore making it difficult for the plaintiff to sell that property for its full value  Slander of Quality – defendant may falsely disparage the plaintiff’s products in a way that causes potential customers to take their business elsewhere  Other Situations – even if there is not slander of title or quality, defendant may be held liable for making some other type of false statement abo9ut the plaintiff’s business (page 112) • The plaintiff must prove 3 elements:  False statement • Defendant must make a false statement about the plaintiff’s business or property o That statement must be made to a third party  Malice • Defendant must have acted out of malice o Purpose of hurting someone o Or if the defendant knew the statement was false or reckless as to the truth of the assertion and if the defendant either intended to hurt the plaintiff knew that the plaintiff was likely to be injured  Loss • Defendant’s false statement must have cause the plaintiff to suffer a loss • Unless the defendant’s conduct is specifically caught by one those torts, the plaintiff will not be entitled to compensation even if it suffers a significant lost Chapter 6 – Negligence Introduction • Tort of Negligence – determines whether the defendant cane be held liable for carelessly causing the plaintiff to suffer a loss or injury 15 of 37 • Tort of Negligence requires the plaintiff to prove that the defendant:  Owed a duty of care  Breached the standard of care  Caused harm to the plaintiff • Defendant must show at least one of these defences existed:  Contributory negligence  Voluntarily assumed  Illegal behaviour from the plaintiff Breached Liability Duty of standard of Causation unless Care care of loss defence • 2 preliminary matters  Professional negligence 1. Negligence that is committed by a professional person  The law of negligence contains a tension between 2 important values 1. The courts will want a wide scope of liability in order to compensate people who suffer injuries 2. The courts recognize that the imposition of liability sometimes actually hurts society Duty of Care • Duty of Care – occurs when the defendant is required to use reasonable care to avoid injuring the plaintiff • Test for Determining the Existence of Duty of Care  A duty of care can be recognized any time that certain conditions are met: 1. Where or not the duty of care in question has already been answered for the particular type of case that she is hearing o If it has been answered, you follow that decision o If hasn’t been answered, then”  Was it reasonably foreseeable  Did the parties share a relationship of sufficient proximity  If both the above are met, then a duty of care has did exist  the judge may still deny a duty of care on the basis of policy reasons • Reasonable Foreseeability  Test is objective  Whether a reasonable person in the defendant’s position would have recognized that the activity could potentially be dangerous or hurt the plaintiff  It is difficult to arrange liability insurance for an unpredictable event • Proximity (page 123)  Hard to define  Basic idea is that there must somehow be a close and direct connection between the parties 1. Physical proximity 2. Social relationship 3. Commercial relationship 4. Direct casual relationship 5. Whether the plaintiff relied on the fact that the defendant represented that it would act in a certain way  Concept of proximity is very broad and open minded which makes it difficult to define Duty of Care for Professional Statements  Concerns negligent statements  Special rules are needed because careless statements are different from careless actions: 1. Risks associated with physical conduct are usually obvious; risks with statements are often hidden and the need for care is usually less apparent 2. If the duty of care exists for a careless statement, there is a possibility of “liability in an indeterminate amount for an indeterminate time to an indeterminate class” 3. Careless statements in pure economic losses (financial losses that are not tied to any property damage or personal injuries) o Law is more reluctant to provide compensation for pure economic losses than for property damage or personal injuries  As a business person: 1. You should be very careful about providing information and advice 2. You do not wish to be held liable for your statements, you should clearly disclaim responsibility 3. You should be careful about relying on statements made by others • Policy 16 of 37  The court will ask whether liability should be precluded on policy grounds  Proximity deals with the relationship that exists between the parties, whereas policy is concerned with the effect that a duty of care would have on the legal system and on society generally Breach of the Standard of Care • First element of the cause of action in negligence requires the plaintiff to prove the defendant owed a duty of care • Second element requires the plaintiff to prove that the defendant breached the standard of care  Standard of care tells the defendant how it should act  breached when the defendant acts less carefully It is based on the reasonable person test (the defendant must act in the same way a reasonable person would act in a similar situation) o The test is objective  judges lower the standard of care somewhat for children o Take precautions against reasonably foreseeable risks o Influenced by the likelihood of harm and the potential severity of harm o Adopt affordable precautions o Act in a way that has great social utility o Requires the defendant to act as the reasonable person would act in similar  less care is required during emergencies  Sudden Peril Doctrine – even a reasonable person may make mistake under some circumstances • Standard of care for professionals: Professional Negligence  Four factors the courts consider when they are dealing with professionals 1. It is not enough for a professional person, while engaged in a professional activity, to meet the standard that would be applied if a layperson performed the same task. A professional must act as the reasonable professional would act in a similar situation. 2. By the time a case gets to trial, it is often easy to say what the defendant could have done to avoid injuring the plaintiff o It is significant in scientific or technical fields o The standard of care is based on information that was reasonably available to defendant at the time of the accident 3. A professional who follows an approved practice generally cannot be held liable 4. Carelessness is different from errors of judgment  a professional does not have to be perfect o As long as the defendant’s mistake is one that a reasonable professional might make, the standard of care is not breached • Standard of Care for manufactured Products: Product Liability  Product liability – may occur if a person is injured by a product  In Canada, tortuous liability for defective products is not strict  in the US it is strict o If Canada were to adopt a similar rule, it would: (page 130, there are 3 points)) o Concerns if the rules are adopted (page 130, there are 4 points)  Liability usually turns on the standard of care  3 parts: 1. Manufacture o Courts usually imposed liability if the defendant carelessly manufactured a product that injured the plaintiff 2. Design o A design defect affects every item that is produced o Courts are more concerned about imposing a tremendous burden on the defendant 3. Failure to Warn o Even if a product is carefully design and manufactured, liability may arise if consumers are not reasonably warned about its dangers  Nature and extend of warning depends on circumstances • The greater the danger, the greater care required  A warning is usually needed for a products intended use  A warning may be required not only by a manufacturer, but also by someone who sells, distributes or installs a product Causation of harm • The third element of the claim in negligence is causation of harm  The defendant will not be held liable unless its carelessness caused the plaintiff to suffer a loss • The but-for-test  Requires the plaintiff to prove that it would not have suffered a lost but for the defendants carelessness • Things to note about the Causation of Harm 1. The plaintiff has to prove all elements of the tort of negligence 17 of 37 2. The law generally adopts an all-or-nothing approach - if there’s at least 51% chance the defendant caused the plaintiff for any of the damages, the defendant will be required to cover all damages 3. The plaintiff has to prove only that the defendant’s carelessness was a cause – not necessarily the only cause – of a loss 4. If different defendants cause the plaintiff to suffer different injuries then each one is responsible 5. If different defendants create a single injury  jointly and severally liable  plaintiff can recover all damages from either party or divide the damages between the parties  the plaintiff makes the decision on who pays for what damages 6. a court may reject the but-for test if it would lead to an unfair result  Remoteness o A loss is remote if it would be unfair to hold the defendant responsible for it o The remoteness principle is used to resolve thin skull cases (a thin skull case occurs if the plaintiff was unusually vulnerable to injury) o Courts refuse to apply thin skull principle (defendant was not responsible for the fact that the plaintiff suffered to an unusual extent because the victim was poor) o The remoteness principle also deals with intervening acts (an event that occurs after the defendant’s carelessness and that causes the plaintiff to suffer an additional injury) Defenses • The plaintiff is usually entitled to compensatory damages once the court is satisfied that there was:  Duty of care  A breach of standard of care; and  A causation of harm • The defendant can avoid liability by providing a defence  there are 3 important defences 1. Contributory negligence 2. Voluntary assumption of risk 3. Illegality • Contributory Negligence  Occurs when a loss is partly caused by the defendant’s carelessness and partly by the plaints carelessness  Contributory negligence can arise if the plaintiff: 1. Unreasonably steps into a dangerous situation 2. Unreasonably contributes to the creation of an accident 3. Unreasonably contributes not to the creation of the accident, but to the damage that it cause  A court can assign responsibility for the plaintiff’s loss between the parties & award damages accordingly • Voluntary Assumption of Risk  Applies if the plaintiff freely agreed to be exposed to a risk of injury  Unlike contributory negligence, volenti, as it is sometimes called, remains a complete defence  If it applies, the plaintiff cannot recover any damages  The defendant has to prove that the plaintiff expressly or implicitly agreed to be exposed to both physical and the legal risk of injury • Illegality  A court may refuse to award damages if the plaintiff suffered a loss while participating in an illegal act. 18 of 37 Chapter 7 – The Nature and Creation of Contracts Introduction • Contract – an agreement that creates rights an obligations that can be enforced in law • Meeting of the Minds – a mutual agreement to enter into a legal transaction on a particular basis • Exchange of Value – occurs when the parties each give up something • The creation of contracts requires a number of distinct steps or elements  3 are essential: 1. Intention to create legal relations 2. Process of offer and acceptance 3. Consideration • Tort vs. Contract  page 61 chapter 3 Intention to Create Legal Relations • The parties must have intended to create a legally enforceable agreement • A court asks whether a reasonable person would have believed that the parties intended to enter into a contract  This test is objective, rather than subjective  2 reasons: 1. A test of subjective intentions would be difficult to apply because a person could easily lie at trial 2. An important goal of the law of contract is to protect reasonable expectations  if you and I enter into an apparent contract for the sale of certain components, I will reasonably expect to receive
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