Midterm I Class Notes

13 Pages
Unlock Document

Western University
Management and Organizational Studies
Management and Organizational Studies 2275A/B
Philip King

2275 CLASS NOTES th January 15 , 2013 News discussion:  Aaron Swartz died (committed suicide) at 26 years old on Jan. 11 . Programmer and activist. What is the law?  A set of rules that governs how we are supposed to act  With punishment if they’re broken  That come from GOVERNMENT Natural lawyers say the law as we know it is just a human-made approximation of ‘the law.’ There are moral laws just like there is a law of gravity. Utilitarian notion: A law is a law if it’s good for society. Dr. Henry Morgentaler  Abortion doctor (did it when is was illegal, could be imprisoned) o Jury found him not guilty, even though he admitted to it o Then changed their mind, went to prison where he appealed to Supreme Court  Protest when he was honored to give a commencement address as Western  People threatened to pull their donations and children from the school  Controversy over his occupation, say he had killed thousands of unborn children  The idea that someone could be barred from speaking at a university because their opinions are too controversial is abhorrent  We have to air opinions at a place like this if, for no other reasons, we can discard the bad ones Constitution, Statutes, and Common Law (see textbook) Constitution: the most important. A mixture of stuff that’s written down and stuff that’s not written down.  The Constitution Act is written o Includes Division of Powers  Two sections, 91 & 92, delineate jurisdiction of provincial and federal governments  When areas overlap, the federal gov. gets them by default  What about areas that aren’t mentioned? Federal  The Charter of Rights and Freedoms is written o Essentially a bill of rights, guaranteed to every person IN Canada (not necessarily Canadian) o Freedom of religion, belief, assembly, opinion, association… o It sets us apart from most of the world  Treaties  Not written: that 3/9 judges on Supreme Court are from Quebec, that the Governor General will alternate between a francophone and Anglophone. In most of the world, governments do whatever they want. Most people live in fear of their governments because their governments are not bound by the law. Most people would give up their lives to be able to vote. That is why we can’t take it for granted. 98% of lawsuits are settled before court. nd January 22 , 2013 News discussion:  Lance Armstrong doping case. Lance Armstrong admits to drug use. Also made it a rule that everyone on his team also took performance-enhancing drugs, and the doctors were in on it as well.  Spanish athlete Ivan Fernandez Anaya impressed the world by giving up victory to do the right thing. The Kenyan runner in first place mistakenly thought he had crossed the finish line and won, so Fernandez helped show him the finish line and allowed him to take first, even though he could have surged ahead.  Point: so much corruption that is in news, need more people like Fernandez. o Imagine what the U.S. government (democrats and republicans) could accomplish if they worked together? They are some of the most creative, smart people in the world yet they spend so much time squabbling. o What we need in the world today is for our law and business leaders to start thinking more like Fernandez and less like Armstrong: to start playing by the rules and apply the same rules to everything. o QC bribing example: did you feel like accepting a bribe was wrong? No. Why? Because everyone was doing it. That does not make it right! In-class example - cell phone contracts:  How many people read them? Almost none. And did you have a chance to negotiate it with the salesperson? No.  Did you have a lawyer when you read it? No? Did they have a lawyer when they prepared it? Definitely. They have vastly more resources than the customer.  If you had read it, you’d realize it was completely unfair and against you.  One question: is it binding? Is it legally enforced? o YES. But why would courts uphold it, if it’s so unfair?  Because we didn’t have to agree to it. We voluntarily agree to be bound.  So if we don’t use fairness to determine whether contracts are legally binding, then we must use something else. Why do we spend so much time discussing contracts? Because they’re everywhere. Why do we spend taxpayer money to enforce agreements between private people?  Because if we didn’t enforce contracts, people wouldn’t enter them.  If people didn’t enter them, there would be no business.  We enforce contracts to promote trade and commerce, it greases the wheels and flow of capital. Enforcing contract law is the corner stone of capitalist society. So, what is a contract?  It is a binding exchange, a bargain, a transaction. Assumptions of a contract: 1. People will not enter into contracts without benefit 2. Contracts voluntarily entered into are fair In order to have a contract, you must have five factors (slightly different than book): 1. Consensus o Determined by offer and acceptance o Offer: When accepted, results in a legally binding contract. 2. Consideration o Seal: A little red seal next to your signature is binding o Promissory estoppel: Tricky 3. Capacity 4. Legality 5. Intent Offers Now that the offer’s out, what could make it go away?  It could lapse/expire  Rejection  Counter-offer (legally and logically, this is a rejection and a new offer)  Revocation  Death or incompetence (we are talking about offers, NOT contracts) o Contracts are usually still binding after death. You die physically, but legally you continue. Offer rec. Revoc. rec. Acceptance rec. Offer mailed Revoc. mailed Acceptance mailed Acceptance mailed = when offer is official  Rational: this is the point when both parties have indicated that they are willing to be bound  Doesn’t apply to email What about an auction? An auction is the search for the best offer.  Where is the offer and acceptance?  ‘Do I have a bid for $100?’  invitation to treat  When first person holds up their paddle  offer  ‘Going, going, gone’  contract Typically, silence does not constitute acceptance. But, it can be in some cases. Promissory Estoppel An exception to the general rule that promises are not enforceable unless there is consideration. A set of circumstances where a promise is enforceable even though there is no consideration. o Ex: Landlord and tenant o Can only be used in the defense. Only as a shield, not as a sword. Capacity Age - Minors do not have the capacity to enter into contracts. The exceptions are food, shelter and clothing. We don’t want teenagers to be homeless because landlords are afraid to rent to them on the basis that the contracts are unenforceable. Incompetence – Ex: being drunk. th January 29 , 2013 News discussion:  RIM has chosen to go after its competition head to head (didn’t have to, could have kept the key board market). o Most people say the company’s future rests on the success of this new product. o King thinks that RIM’s decline can be directly attributed to poor management choices, specifically with law. o RIM was sued by NTP in the U.S. (2004/2005) and could have settled for $7 million, but didn’t take it seriously. As a result, they had to pay over $600 million to get rid of this case. o Immediately after, decided to bid on Pittsburg Penguins (unsuccessful), then unsuccessful bids on Nashville Predators and Phoenix Coyotes. Each time, it was obvious he was trying to pull a team to Hamilton. o Point: Jim Balsillie (co-CEO) was so completely off-chart and had a ridiculous strategy. His idea was to bully NHL into allowing to put a team in Hamilton against the wishes of Toronto and Buffalo.  When it didn’t work, he went to court and sued NHL and owners for not being allowed to buy the team. In other words, the guy running the largest technology company in Canada is completely distracted and spends 2.5 years trying to bring an NHL team to Hamilton. He was not able to achieve his goal or even understand why his strategy was doomed. He lost his passion for RIM  sell your stock. Nail in the coffin. o Also involved in back dealing of options. One scandal/failed strategy after another. All the time the share price and market share are dropping. o Point: All started with a failure to recognize basic legal issues like corporate governance.  Is Apple next? They’ve taken their eye of the ball too. They’re busy fighting lawsuits with Samsung, but it’s about SELLING PHONES!  iPhones are cool for another 5 years, maybe. Contract: An exchange that the law will enforce. We do not enquire about the fairness of contracts, we assume it: that’s capitalism. Remember - to have a contract, you must have five factors (slightly different than book): 1. Consensus 2. Consideration 3. Capacity 4. Legality 5. Intent Capacity Continued Age – no contracts with minors, except for necessities. We don’t want to deny these to minors. Incompetence involves a two-part test (must have both!): 1. Were you so incompetent that you didn’t appreciate the nature of what you were doing 2. Did the other party know this or should they have been reasonably aware. General principal: freedom of contract, because we want to promote the free market. Legality To be enforceable…  Contracts obviously must be legal to be enforceable.  Contracts also must NOT be contrary to public policy o When an agreement violates public policy, it will not be enforceable for reason of legality (ex: non-competition covenants) Intent You have to do what you say you are going to do. __________ Arguments People Make so to Make a Contract Unenforceable To get around a contract, can argue that it was…  Void (never existed, missing consensus/consideration/legality…)  Voidable (exists, but one of the parties can avoid/escape/cancel it, ex: contracts with minors) o Results in potential rescission  Unenforceable (valid, but courts will not enforce) o Ex: statue of frauds requires certain contracts to be in writing Duress: A contract is voidable when someone threatens physical harm. o If you’re going to show economic duress, you have to show that you had no practical alternative other than entering into the contract. Undue influence: Influence by which a person is induced to act otherwise than by their own free will or without adequate attention to the consequences. o Ex: King says that if we enter into a contract to buy his car, he’ll give us a better mark. o This makes it avoidable, because it’s not really voluntary. Unconscionability: A vulnerable person is taken advantage of. o Ex: see a homeless person, offer to sell a loaf of bread for $50 and they agree. o Appears we have a contract, but it’s unconscionable: inequality of bargaining power, person who is extremely vulnerable. Misrepresentation: A statement of fact that is false. Only care about material misrepresentations (which would change whether someone would enter into a contract). o Ex: once you install your new machine, it doesn’t make as much as was promised. o Could it ever be a statement of opinions that is wrong? Yes, if it’s made by an expert. o In this case, rescission is available to you. o What can you do now? o Determine whether it was a term of the contract or not:  If yes, then you have rescission or sue for damages for breach of contract.  If no, then you only have rescission o What else should you have done to protect yourself? o Due diligence! Hire an engineer to test the machine. This is preventative. o Tort law analysis: was the misrepresentation… o Innocent? o Negligent/fraudulent?  damages o Tort law is backward looking, putting the party where they were before incident. __________ Privity of contract: Only the parties to a contract can have rights or obligations under the contract. Exemption clauses: Courts will enforce them provided they are… 1. Perfectly clear 2. Known to parties at time of contract signing  Example 1: guy signs up for tubing race in the morning, but later shows up drunk. He says they can’t stop him for going, so they make him sign a waiver saying they aren’t responsible for any injuries that occur. He gets injured and then sues. They hold up the waiver he signed but it isn’t enforced because of CAPACITY (he was drunk and they knew it).  Example 2: huge waiver sign saying mountain biking is dangerous, not responsible for injury etc. This is visible before you enter contract (buy ticket). Can’t sue.  Example 3: huge waiver sign saying mountain biking is dangerous, not responsible for injury etc. You buy your ticket and this sign is only visible AFTER. You then break your leg and you can sue, because you entered into the contract BEFORE the sign was posted. Law:  Damages Equity:  Injunction  Specific performance  Quantum merit  Resciss
More Less

Related notes for Management and Organizational Studies 2275A/B

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.