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LAW 122 (625)
Chapter 1

LAW 122- Chapter 1- Introduction to Law.docx

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Law and Business
LAW 122
Theresa Miedema

LAW 122- Chapter 1- Risk Management and Sources of Law Why study law?  Depends on who you are o Consumer- be aware of the rules that govern commercial transactions o Employment- public sectorneed to know the different types of law that may affect you o Business- ability to make good choices from a legal perspective  factors affect success and failure in business  primarily decision-making abilities choice of location, product, marketing, etc  business decisions have legal consequences  negative consequences decision to dump pollutants into environment  positive consequences decision to bind contractual party to promise  legal consequences affect profits and losses  liability imposed for poor decisions  opportunities exploited by good decisions  Law can both hurt and help Risk Management  Risk management- process of identifying, evaluating, and responding to the possibility of harmful events  Three steps – o Identification recognizing legal risk -―can we be liable‖ o Evaluation assessing legal risk –―chances of something going wrong‖ o Response reaction of legal risk –―what are we going to do about it‖  Business probably cannot exist—certainly cannot profit without taking chances  Types of risk management o Risk avoidances risk so serious that it should be avoided  withdraw dangerous product from market o Risk reduction reduced to an acceptable level though precautions  modify product to reduce danger o Risk shifting if risk can not be avoided or reduced it may be shifted onto another party  Important strategies—insurance and exclusion clauses  buy liability insurance for losses caused by danger o Risk acceptance simply accept risks  Do nothing  Three important concepts o Insurancecontact in which on party agrees in exchange for a price to pay if another party suffers a loss  Liability insurance benefit of the purchaser is held liable for doing something wrong  Property insurance provides benefit if the purchaser’s property if damaged, lost, or destroyed o Exclusion and limitation clauses contractual term that changes the usual rules of liability  May attempt to exclude all risk of liability  Exclude liability for certain types of acts or losses  Limit the amount of compensation that is available o Incorporation to avoid personally liable for any debts or liabilities that are occurred by the business—set up as corporations or companies  Benefit—limited liability—usually only the company it self not anyone in particular  employees, directors and officers may still be held personally liable for the torts they commit.  Company may be lost but the people will be safe  Although it does not protect individuals from all risks An Introduction to the legal system  The nature of law o All laws are rules but not all rules are laws o Law- a rule that can be enforced by the courts 1 LAW 122- Chapter 1- Risk Management and Sources of Law o Moral obligation— informally sanctioned  e.g. loss of friendships or damaged reputation o Legal obligation—formally sanctioned  e.g. imprisonment or payment of damages  A map of the law o Civil law- system trace their history to ancient Rome  Only civil law jurisdiction in Canada in Quebec  Jurisdiction- geographical area that uses the same set of laws  ―Civil law jurisdictions‖ can be distinguished from ―common law jurisdictions‖.  Civil law jurisdictions: Trace their history to ancient Rome, e.g. France, and the province of Quebec in Canada  Common law jurisdictions: Trace their history to England, e.g. Australia, New Zealand, most of Canada o Common law- system trace their story to England  Rest of Canada and Australia, New Zealand, and most of the US o Significant difference between civil law and common law o Some types of laws are the same across Canada, e.g. criminal laws and constitutional laws. Public law  Pubic law- concerned with governments and the ways in which they deal with their citizens o Constitutional law- provides basic rules of our political and legal systems  Who is entitled to create ad enforce laws  Establishes the fundamental rights and freedom o Administrative law- concerned with the creation and operating of administrative agencies and tribunals o Criminal law- deals with offences against the state  rules governing wrongs against society  Concerned with people who break the rules that are designed to protect society as a whole  White collar crime- employees that commit a crime against their own company  Corporation crime- employees that commit a crime to benefit the company o Tax law- concerned with the rues that are used to collect money for the purposes of public spending Private law  Private law- concerned with rules that apply in private matters o A Tort- Private wrong—offence against a particular person  Intentional torts- assaults and false imprisonment  Business torts- deceit and conspiracy  Negligence- one person carelessly hurts another o The law of contacts- concerned with the creation and enforcement of agreements  Business people- important- law of contacts governs virtually everyone of them  Contracts involved in—  Sale of goods  Negotiable instruments—Cheques 2 LAW 122- Chapter 1- Risk Management and Sources of Law  Real estate transactions—purchase of land  Operation of corperations  Employment relationship o Law of property- concerned with the acquisition, use and disposition of property  Real property- land and things that are attached to land  Personal property- things that can be moved from one place to another  Intellectual property- consist of original ideas, such as patents and copy rights  Both parties in a private dispute are usually private persons—either individuals or organizations Overlap  Single event can trigger more than one set of rules o Eg) if you punch me you may commit both a crime and a tort  Some situations involve various types of law o Eg) employee relationship is based on a contract between employer and employee Sources of Law The constitution  The constitution- The document that creates the basic rules for Canadian society, including its political and legal systems o 2 significant consequences  Every other law in the country must be compatible with it  Section 52  Very difficult to amend  General rule- can be changed only through a special amending formula  Requires consent of Parliament plus legislatures of at least 2/3 of the province—50% of the population  Amendments are rare  Division of power- areas in which each level of government can create laws o Constitution creates division of powers  Topics divided into federal or provincial authority  Section 91 (federal) and Section 92 (provincial) o Canada is a federal country—has 2 level of government  Federal government  House of commons—members of the MPs—elected form every province and territory  Senate—senators—appointed their job  Prime Minister— Political party with most MPs  Provincial (territorial) government  represents province (or territory) o no senate o legislature (elected) o premier (leader of party forming government) o Still apart of the British commonwealth—Queen of England remains head of state o Provincial and territorial  Elect politicians to represent within own province and territory  Elect body (legislature) Legislative Assembly o Residual power- gives federal government authority over everything that is not specifically mentioned o Ultra vires—government tries to create laws outside of its own area  Section 52- such laws have no force or effect o If both level of government create legislation that conflicts
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