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LAW 122 Study Guide - Constitution Act, 1982, National Energy Board, Liability Insurance

Law and Business
Course Code
LAW 122
Jane Monro

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Chapter 1: Risk Management
Risk management = the process of identifying, evaluating and responding to the possibility of harmful
events which could lead to legal liability
- Business (?) = risk protection
- In-house counsel
- Legal departments
- Get legal advice time to time
Risk Management Strategies
- Risk Avoidance = avoiding the rick all together on account of its serious nature
o Removing a dangerous product from the market
o Ex. Exploding car in the market? AVOID IT
- Risk Reduction = reducing ricks to an acceptable level thru the use of precautions
o Modifying a dangerous product to reduce the likelihood of damages
o Ex. Poor economy but lending money? Reduce risk grant mortgage over a factory (can
get the factory if they don’t pay back)
- Risk Shifting = enabling a 3rd party to assume risk
o Insurance = works by spreading the cost of liability over the entire group
Liability insurance
Property insurance = damage property? Insurance will cover the costs
o Exclusion and limitation clauses
Contractual terms that exclude liability for certain types of acts/losses, or that
limit the amount of compensation available
Ex. Works hurts someone w/ equipment → Company liable but if INDEPENDENT
CONTRACTOR hurts someone w/ equipment → company not liable
- Risk Acceptance = identifying and accepting the risk → just accept it
o Do nothing
o Ex. Golf course, wild shot breaks nearby factory’s window, just accept it → it costs less
to fix the damages than making a huge safety net or have an insurance policy
- Incorporation = some businesses are incorporated
o Major benefit = limited liability → only the company itself is liable, not the shareholders
or the directors for debt
Limited liability not protected from all risks → ppl may be held liable for the
torts they committed
Introduction to the legal system
- Jurisdiction = a geographical area that uses the same set of laws
- Law = a rule that is enforced in by the courts
- Civil law = a legal system that traces its roots to acienct Rome (the legal system used in Quebec)

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- Common law = a legal system that traces its history to England (the legal system used in the
remainder of Canada)
Overlaps → Crime and torts
- Contract b/w employee and administrative law (if company discriminates against ethnic
- Contract b/w employee and boss sexually harasses employee is criminal law
Public Law = concerned with governments and the ways in which they deal with their citizens
- Areas of Public Law
o Constitutional Law = Provides basic rules for our political and legal systems
Determines who is entitled to create and enforce laws
o Administrative Law = Concerned with the creation and operation of administrative
agencies, boards, commissions and tribunals
Ex. Human rights tribunal decide that a corporation is discriminating against
women based on their salaries
Administrative bodies that affect business:
Federal: Canadian Radio-Television and Telecommunications
Commission, National Energy Board, Competition Board
Provincial/Territorial: Workers’ Compensation Board, Labour Relations
Board, Environmental Appeal Board, Professional Society (Law Society
of Upper Canada)
Municipal: Zoning and Planning Board, Building and Inspections
Department, Licence Division
o Criminal Law
Governing offenses against the state
Break rules that are designed to protect society as a whole
White-collar crime = Crime committed by business persons
Ex. Manager stealing cash from cash register
Corporate Crime = Crimes committed by a company itself
Ex. Car company rolling back the odometer
o Tax Law = Concerns laws that are used to collect money for public spending
Great interest in the business community
Private Law = concerned with the rules that apply in private matters
- Areas of Private Law
o Usually persons (individuals or an corporation) also apply to government
o The law of torts = Governs private wrongs committed against individuals and
Intentional Torts: assault and battery, trespass to land, etc.

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Business Torts: conspiracy, intimidation, deceit, etc.
Negligence: a person carelessly hurts another
o The law of contracts = Governs the creation and enforcement of private agreements
1. Sales of goods
2. Negotiable instruments like cheques
3. Real estate transactions
4. The operation of corporations
5. Employment relationships
o The law of property = Governs the acquisition, use, and disposal of property
1. Real property like lands
2. Personal property like things that can be moved one place to another
3. Intellectual property like original ideas: patents and copyrights
Sources of law = broadly speaking there are three sources:
- The Constitution
- Legislation
- The Courts
The Constitution = this document creates the basic rules for Canadian society, including its political and
legal systems.
- Difficult to change, can change thru special amending formula = consent of Parliament +
Legislatures of at least 2/3 of the provinces, when consenting provinces represent at least 50%
of the country’s population
- Section 52 = “The Constitution of Canada is the supreme law of Canada, and any law that is
inconsistent with the provisions of the Constitution is, to the extent of the inconsistency, of no
force or effect.”
Federalism = Canada is a Federal country
- There are two main levels of government
o Federal = Deals with the authority and represents the interests of all of Canada
Parliament consists of:
Senate Appointed
House of Commons Elected officials
o The Prime Minister is the leader of the party with the majority
of seats in the House of Commons
o Provincial/Territorial = Deals with the authority and represents the interests of each
province or territory
Provincial Legislative Assemblies consist of
Members of the legislative Assembly Elected officials
o Premiere is the leader of the party with the majority of seats in
the Legislative Assembly
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