Midterm 1 Chapter Summary.docx

39 Pages
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Department
Marketing and Consumer Studies
Course Code
MCS 3040
Professor
Joseph Radocchia

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Description
Business and Consumer Law Midterm 1 Chapter Summary Chapters 1 2 3 4 10 11 12 5 6 7 8 9 23 24Chapter 1 Knowledge of the Law as a Business Asset Law in The Business Environmento The law impacts virtually every aspect of society including the business environmento The law affects most business decisions from development of the basic business idea through to its implementation and all the attendant matters in between including financing hiring production marketing and saleso By understanding the role of law in the multitude of business decisions that people must make an entrepreneur can maximize the protection that the law extends while avoiding its pitfallso Knowledge of the law is a business asset that can assist owners and managers in reaching their goals and objectiveso Of course a businessperson can function with little or no understanding of the law This lack of knowledge however may result in failure to maximize opportunities or in losing out on them altogethero Business law a set of established rules governing commercial relationships including the enforcement of rights It also Defines general rules of commerceProtects business ideas and more tangible forms of propertyProvides mechanisms that permit businesspeople to select their desire degree of participation and exposure to risk in business ventures Seeks to ensure that losses are borne by those who are responsible for them Facilitates planning by ensuring compliance with commitments Rules and Principleso Law the set of rules and principle guiding conduct in society primarily by protecting persons and their property facilitating personal and commercial interaction and providing mechanisms for dispute resolution Protecting Persons and Their Propertyo The most familiar purpose of the law is to provide protection Those who violate the Criminal Code of Canada are subject to criminal sanctionso The law protects members of society in two ways 1 it sets rules with penalties in order to encourage compliance 2 It seeks to make those who break the law accountable for their misconducto The law also protects businesses by setting penalties and ensuring accountability as wells as ensuring that losses are paid for by the parties responsible for creating them o Breach of Contract failure to comply with a contractual promiseo The laws guards business interests such as a breach of contract or defamation and the law protects those who deal with these businesses such as discriminatory practices health and safety paying creditors not selling knockoffs and laws in other countrieso Government may also neglect to or decide against regulating in a given area This can have adverse consequences Facilitating Interactionso The law facilitates personal interactions by providing rules concerning marriage adoption and the disposal of property upon owners death The law also facilitates commercial activity by providing rules governing the marketplace ex contract law Page 1 of 39 o Contact Law rules that make agreements binding and therefore facilitate planning and the enforcement of expectations o Although the law addresses failed relations it is not primarily about conflict Rather the law functions to prevent disputes and to facilitate relationships Nor is the law primarily about rules that constrain commerce Through the law does forbid certain activities its more significant role is facilitates o Legal rules provide definition and context to doing business The creation of certainty in business relationships is on of the most important contributions that law can make to the commercial arena While the necessity of creating certainty means that some anticipated contracts founder when it comes to formalizing their contract the law has not necessarily failed It is more likely means that businesspeople involved were not as close to being in agreement as they had initially assumed Further discussions perhaps through lawyers have simply identified problems that Although hidden were always thereo No contract can recite and provide for all contingencies there will be some issues left unstated but often the parities themselves find ways of overcoming these omissions Generally they will be guided by the need to achieve the original intent behind the contractual relationship with the objective of dealing fairly with the unexpected or unaddressed event that has just occurred In this way the business relationship fill in the blanks in the contractual arrangements If one or both the parities involve the legal systema judge will apply established rules governing contracts that lack the necessary specificityo The influence of the law on the business environment does not have to be exacting and literal In fact parties to a business contract do not always observe their agreement to the letter preferring to maintain their relationship rather than sue for breach of contract There needs to be a good reason to risk a relationship and devote resources to litigation The business relationship determines whether strict legal rights will be insisted upon This is an important reality that affects how the law actually operates in the business environmento Litigation the process involved when one person sues another Providing Mechanisms for Dispute Resolutiono Whether a conflict can or even should be resolved outside the formal legal system depends on the circumstanceso Maintaining a good business relationship with the party in breach or at least minimizing the financial costs of the dispute is often much more important than proving yourself to be right in the court of law Questions to ask include Are legal proceedings absolutely necessary at least right nowIs there a way to resolve the problem from a larger relationshippreserving perspective rather than from a strictly legal viewpointo Solutions to a legal dispute exist at various levels of formality1 Parties try to come to a resolution between themselves and produce if necessary a formalized settlement agreement2 Meditation a process through which the parties to a dispute endeavor to reach a resolution with the assistance of a neutral person3 Arbitration a process through which a neutral party makes a decision usually binding that resolves a dispute4 Sometimes however one business will commence legal action against another and take the matter to court IT is essential to a workable business environment that the last resort solution provided by the litigation process be available to the disputants In this way the liability the legal responsibility for the event or loss that has occurred of one business to another can be established Page 2 of 39 How and Why the Law Workso There are any number of ways to resolve a dispute including trial by ordeals pistol duel and even modernday drive by shootings What these methods lack however is accordance with modern ideas of what is just fair and reasonableo Canadas legal system stands in opposition to such inequitable arbitrary and violent alternatives Whole our legal system is far from perfect it possesses essential improvements over its predecessors because it determines liability in accordance with certain principles and processes that are regarded as justo The goals of the Canadian justice system are ambitious and often difficult to achieve There are also obvious limitations to what the law can actually accomplish even when it is most successful The law can however offer itself as a mechanism for achieving the goals of protection facilitations and dispute resolution Knowledge of the law as a Business Asseto Entrepreneurs can use the law to protect and advance their business interests Conversely they can cause themselves much anxiety grief and financial loss by ignoring the lawo An effective way to avoid negative business experience and enhance returns is to implement a risk management plano Legal Risk Management Plan a comprehensive action plan for dealing with the legal risks involved in operating a business by identifyingthe legal risk associated with a business and implement concrete measure for managing those risks The objective is to identify and plan for risks before they occur rather than adopting the reactive modeLaw and Business Ethics o From the perspective of reputation and profitability it is not enough for a commercial enterprise simply to comply with the law Business ethics also provide an increasingly important overlayo Business ethics moral principle and values that seek to determine right and wrong in the business world Business ethics require entrepreneurs to conform to principles of commercial morality fairness and honesty from labor practices and advertising to spamming and environmental protectiono Sometimes ethical standards are even stricter than legal ones Skirting ethical norms can lead to lost revenue bad publicity public demonstrations and condemnation for contributing to social injustice ex Nike and Shell Page 3 of 39
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