C HAPTER 1: RISKM ANAGEMENT AND SOURCES OF LAW
Risk Management is the process of identifying, evaluating and responding to the
possibility of harmful events
Identification: Must become concerned about your own liability of being held
legally responsible for false accusations and the possibility of being sued.
Evaluation: After identifying the risk of being sued you can proceed if you feel
sharing your personal suspicions / allegations may be true if they have enough
support.
Response: Now in a position to make an informed decision after identifying and
evaluating the risk.
Risk Avoidance Risks that are so serious they should be avoided altogether
Risk Reduction Some risks can be reduced to an acceptable level through precautions
Risk Shifting Involves shifting the risk onto another party, through insurance, exclusion
clauses and incorporation. Companies are not liable for independent contractors as they
are for their own employees.
Insurance: Two primary times of insurance Liability Insurance provides benefit if
the purchaser is held liable (being sued) for a wrongdoing. Property Insurance
provides benefit if the purchaser’s property is damaged, lost or destroyed
Exclusion and Limitation Clauses: a condition that changes the regular rules of
liability from the business, limiting the risk of fault or compensation that is
available
o Example: Courier’s contract might state it is not held responsible for over
$100 in lost or damaged packages
Incorporation: When a business is incorporated the major benefit comes from its
limited liability, meaning only the company itself is held at fault for debts so the
company may be lost, but the people behind it are safe.
o Example: If a company goes bankrupt and it’s assets are repossessed, the
personal assets of directors and officers will be safe
An Introduction to the Legal System
The Nature of Law it can be difficult to distinguish between moral obligations and legal
obligations, however by definition a law is a rule that can be enforced by the court
Civil Law is a system that traces its history to Rome, most countries in Europe
are still civilian. The only civil law jurisdiction in Canada is Quebec which
borrowed its laws from France
o Jurisdiction a geographical area that uses the same set of laws
Common Laws come from a system in place in England, and are used in Canada,
Australia, New Zealand and most of the United States. However, Quebec and the
rest of Canada share the same Criminal Laws and Constitutional Laws Public Laws are concerned with governments and the ways in which they deal with their
citizens
Constitutional Laws provide the basic rules of our political and legal systems. It
determines who is entitled to create and enforce laws and it establishes the
fundamental rights and freedoms
Administrative Law is concerned with the creation and operation of a variety of
agencies, boards, commissions and tribunals which are responsible for managing
the workload of constitutional laws
Criminal Law deals with offences against people who breaks rules that are
designed to protect society
o White-collar crimes are committed by people in a business / professional
setting such as fraud and embezzlement
Private Law is concerned with the rules that apply in private matters. Private law
involves usually two people, individuals or organizations, including the government.
Tort is a private wrong, an offence against a particular person there are multiple
types of torts. Intentional Torts such as assault. Business Torts such as deceit and
conspiracy. Negligence covers most situations in which one person carelessly
hurts another
Laws of contracts concerned with the creation and enforcement of agreements
Law of property is concerned with the acquisition, use and disposition of
property. Real Property involves land and things attached to land. Personal
Property involves things that can be moved from one place to another.
Intellectual Property involves things that consist of original ideas like patents and
copyrights. Multiple areas of law that deal with all forms of property such as Law
of Succession which deals with a person’s property when they die and Law of
Trust which deals with a situation when one person holds property on behalf of
another
Overlap Usually different areas of law can intersect as a single event triggers more than
one set of rules. If you punch someone in the face that is both a Criminal Law and a Tort
Source of Law
Constitution is the document that creates the basic rules for Canadian society, including
its political and legal systems. Every law in the country must
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