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Management and Organizational Studies 2275A/B Study Guide - Midterm Guide: Punitive Damages, Eggshell Skull, Declaratory Judgment

Management and Organizational Studies
Course Code
MOS 2275A/B
Study Guide

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Business Law 2275 Textbook Notes
Chapter 1
Sophisticated Client
A sophisticated client understands the role of the lawyer and the client. A sophisticated client also
has an understanding of when to represent him/herself, when to hire a lawyer, and how to hire the
lawyer. Also the client understands what actions can be taken with the dissatisfied conduct of their
lawyer. Three major components are:
The law will protect you from people who try to take advantage of you.
The law is sophisticated
So, too, must you be.
The Role of the
The Role of the Lawyer is to present the client with legal advice relevant to the clients situation. While
lawyers are typically experts in there area of practice, and may be able to provide invaluable assistance
to their clients, lawyers are simply providers of advice. They are hired by the client who provides them
with instructions and the lawyer is bound to follow these instructions, provided they are lawful. An
emphasis on one aspect of the client-lawyer relationship is that no advice is appropriate unless the
lawyer has received all information.
Refers to the duty of the lawyer to keep all information provided by the client confidential. It is thus
fundamental to our legal system, as without it, the access to justice would be significantly reduced.
Most lawyers will advise their clients about solicitor-client privilege and encourage their clients to
disclose all relevant information.
Relationship (small
When to hire a lawyer:
The first thing the owner should do is consider how he will organize his business. i.e. Sole
proprietor; will he have a partner? Will the business be operated as a franchise? A lawyer can
provide information and advice that will help the owner make decisions appropriate for
achieving his objectives.
If the owner is purchasing an existing business, the lawyer can provide advice and information
that will enable the owner to minimize his potential risk and liability.
The lawyer can, of course, determine the relevant municipal, provincial and federal laws that
are relevant to the business and provide advice required to ensure compliance with them.
This could cover everything from obtaining a business license to complying with municipal
noise bylaws, to satisfying provincial and federal environmental standards.
When to represent yourself:
If you need to make a business decision, and you do not retain a lawyer, then you will either
not be considering relevant legal information when you are making your decision or you will
be obtaining it yourself. For small insignificant decisions it may be appropriate to avoid taking
the time to find relevant legal information. However, in most cases it would be beneficial to
proceeding only after completing some research of the relevant law. Anyone with computer
access and access to the Internet can find legal information online. A sophisticated client will
capitalize on this, she will use the sources provided to answer her current legal questions only
hiring a lawyer if absolutely necessary.
Important to note not all-online information is true.
Other distinguishing factors that determine when to or not hire a lawyer are the time and costs
incurred if a lawyer is consulted for assistance or representation in making a particular business
decision. Small claims court (limited to 25,000 in winnings). Anything greater than this is taken to a
superior court and that’s when a lawyer should be retained. In a small claims court, a lawyer may be
retained due to the complexity of the caste, but a sophisticated client will understand if the cost of one
is worth it. If you break the law and harm someone else, there will likely be two different legal
proceedings. First there will be a criminal prosecution in which you will be charged by the
government (state) with committing a crime. If you are convicted, you will be punished and have a
criminal record. The civil litigations may take place if a small claims court, where you will most likely
represent yourself. If the litigation involves an amount of money greater than the monetary
jurisdiction of small claims court you should then hire a lawyer to represent you, as the trial will take
place in a superior court.

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Business Law 2275 Textbook Notes
Legal aid
You are eligible for legal aid if you have legal problems and you can’t afford a lawyer. Legal
Services Society (LSS) may pay for legal problems involving criminal charges, mental health and
prison issues, serious family problems, child protection matters, or immigration problems. To
receive legal aid, a client must meet certain financial guidelines involving household income and
assets. Furthermore, if you collect money as a result of the settlement or judgment, you will
probably have to repay some or all of the benefits you received from legal aid. Duty council is
court lawyers who assist individuals who are not represented by a lawyer. Duty council may be
available in criminal courts, family and immigration courts. The assistance of a duty council is
considered legal advice, not legal representation. In a duty court, duty council may provide
advice to an accused about the charges he faces, the relevant court procedures, and his legal rights.
How Lawyers bill
their Clients
There are three main ways lawyers will calculate there fee’s:
First, the lawyer may charge a fixed fee for the work required, regardless of the time
involved. This is often used in specific tasks like creating a will, purchasing a house, or
incorporating a business.
Secondly, the lawyer may bill the client for all of the time she spends on the activity; with
the hourly rate depending on numbers of years the lawyer has been to practice.
Third, the lawyer may receive a percentage of the amount the client collects, either
through a settlement or a court judgment. This contingency fee agreement usually
happens when a client does not have enough funds to pay the lawyer at the beginning of
the case.
In addition to paying for the lawyer’s time, the client is also responsible for disbursements that
are the out of pocket costs incurred by the lawyer on the clients behalf (filing documents, long
distance phone charges, courier charges, fee charged by an expert for testifying, and photocopying
costs). In most cases the lawyer will ask for a retainer (initial deposit into trust account) from the
client before she commences work.
How to Complain
about your Lawyer
Fee Mediation Service a neutral mediator who tries to facilitate a mutually acceptable
resolution of dispute.
Court Officials taxation officers and assessment officers have the power to decide that the
lawyer’s bill is fair and does not need to be changed.
Complaint Resolution Process Complains are investigated and may need to be sought deeper
in hearing.
Ethics of Lawyer
Ethical behavior implies integrity, honesty and professionalism
Failure to observe ethical behavior may result in a fine
Ethics of Clients
No code of conduct for business people
Operate under the supervision of a lawyer
Authorized to represent clients in small claims court
Chapter 2
What is Law
Law has been defined in moral terms, where only good rules are considered law (natural law
theorists). Others have defined law by looking at its source, stipulating that only the rules enacted
by those with authority to do so qualify as law (legal positivists). And some have defined law in
practical terms, suggesting that only those rules that the courts are willing to enforce are
considered law (legal realists). A simplified definition of law is “Law is the body of rules made
by government that can be enforced by the courts or by other government agencies”. While
this definition as enforceable rules has practical value, it does not suggest what is moral. Just
because someone is obeying the law doesn’t mean that they are acting ethically.
Categories of Law
Substantive Law established not only the rights an individual has in society but on the limits of
his or her conduct. Substantive law guarantees all the right to travel, to vote, and the right to own
property. Procedural Law determines how the substantive laws will be enforced. The rules
governing arrest, investigation and pre-trial and court processes in both criminal and civil cases

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Business Law 2275 Textbook Notes
are examples.
Law can also be distinguished by its private or public function. Public Law includes constitutional
law that determines how the country is governed and the laws that affect an individual’s
relationship with the government, including criminal law and regulations created by government
agencies. Private Law involves the rules that govern our personal, social, and business relations
that are enforced by one person sulting another in a private and civil action.
Origins of Law
Common Law Legal System adopted by all provinces in Canada and has developed over the last
millennium initiating in England. Civil Law Legal System is used by and only by Quebec in Canada.
It is based on the French civil code and originated from Europe, and is to used in many
jurisdictions, outside of Canada. The terms Civil Court, Civil action, and Civil Law are all
definitions used within the Common Law Legal System and should not be confused with the
French “Civil Code” or Civil law as used in Quebec.
Civil Law Legal
Civil Law is a Code a list on rules stated as broad principles of law that judges apply to the cases
that come before them. The code determines the principles to be applied.
Common Law Legal
The early Norman kings established a strong feudal system in English that centralized power in
their hands. As long as they remained strong, they maintained their power; but when weak kings
were on the throne, power was surrendered to the nobles. The growth of the common law legal
system was much affected by this ongoing struggle for power between kings and nobles and later
kings and parliament. During times when power was decentralized the administration of justice
fell to the local lords, barons, or sheriffs, who would court as part of their feudal responsibility.
Their courts commonly resorted to such practices as trial by ordeal was done by a physical test.
The assumption here was that God would intervene on behalf of the righteous party. Strong kings
such as Henry II introduced travelling courts, which were very attractive in resolving disputes. As
more people begin to use them their power base grew. The fairer the royal judges were, the more
people they attracted. Eventually this turned into royal courts where there function was no to
impose any et of laws, but to be as fair and impartial as possible.
Stare Decisis
Gradually a system of justice developed in which the judges were required to follow each other’s
decisions. This process was then named stare decisis or “following precedent”. Another factor,
which lead to the development of stare decisis, was the creation of the appeal courts. The most
significant feature of our legal system today is that the decision of a judge at one level is binding on
all judges in the court hierarchy in a court of lower rank, provided the facts in the two cases are
similar. The Supreme court of Canada is the highest court in the land; its decisions are binding on
all Canadian courts.
The role stare decisis has in the common law legal system is that it allows parties to predict the
outcome of the litigation and thus avoid going to court. However, a significant disadvantage of the
following precedent is that a judge must follow another judge’s decision even though social
attitudes may have changed. The system is anchored to the past, with only limited capacity to
make corrections or to adapt and change to meet modern needs
The judge’s job is to analyze the facts of the precedent cases and compare them with the case at
hand. Since no two cases are ever exactly alike, the judge has some flexibility in deciding whether
or not to apply a particular precedent. Judges try to avoid applying precedent decisions by finding
essential differences between facts of the two cases if they feel the prior decision will create an
injustice in the present case. This process is called Distinguishing the Facts of opposing
Sources of Law
Common Law:
At an early stage in the development of common law, three great courts were created: the court of
common pleas, the court of kings bench, and the exchequer courts, referred to all together as the
common law courts. The rules developed in the courts we called “common law” because judges,
at least in theory, did not create law but merely discovered it in the customs and traditions of the
people to whom it was to be applied. However, the foundation of a complete legal system cannot
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