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LAW 122 (618)


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Law and Business
LAW 122
Avi Weisman

LAW 122 – CHAPTER 1: RISK MANAGEMENT AND SOURCES OF LAW 1 Chapter 1: Risk Management and Sources of Law Table of Contents: Risk Management - P. 1 Intro to the Legal System – P. 2 Private Law – P. 3 Public Law – P. 3 Sources of Law - P.5  Why study law? (P.1)  all business choices have legal consequences  Risk management: the process of identifying, evaluating, and responding to the possibility of harmful events  Need to identify, evaluate and respond to the legal risks involved  Identification  Need to be concerned about liability, about actually being held legally responsible  Also about possibility of being sued  Recognition of legal risks  Evaluation  Assessments of legal risks  Response  Reaction to legal risks  Very few cases go before the judge; most settled by parties  Risk strategies:  Risk avoidance: o some risks are so serious they should be avoided  Risk reduction: o Some risks can be reduced to an acceptable level through precautions o Reduce risk by modifying business practices o Ex. Put sign that warns that the floor is wet  Risk shifting: o Risk can be shifted to a third party o Insurance o Exclusion clauses o Company can use independent contractor (company not liable to his actions)  Risk acceptance: o Sometimes have to just accept risk LAW 122 – CHAPTER 1: RISK MANAGEMENT AND SOURCES OF LAW 2  Examples of risk management  Insurance: o A contract where one party agrees, in exchange for a price, to pay a certain amount of money if another party suffers a loss o Liability insurance provides a benefit if the purchaser is held liable for doing something wrong o Property insurance provides a benefit if the purchaser’s property is damaged, lost or destroyed o Shifts the risk  Exclusion and limitation clauses: o Contractual terms that exclude liability for certain types of acts/losses, or that limit the amount of compensation available o Ex. Courier company’s contract say that it cannot be held liable at all or for more than $100, if it loses, damages, or destroys a package  Incorporation: o Many business set up as corporations or companies o Do this to avoid personal liability for any debts and liabilities incurred by the business o Benefit is limited liability o Means that it is usually only the company itself, and not the directors or shareholders, that may be held liable for debts  Some companies may create their own legal department Introduction to the Legal System (P. 6)  Law: a rule that can be enforced by the courts Map of the Law  Civil Law: systems trace their history to ancient Rome  Most of Europe use it  Used by Quebec  Jurisdiction: a geographical area that uses the same set of laws  Common law: systems trace their history from England  Used mostly by countries that were previously occupied by the British  Australia, New Zealand, most of US  Canada – excluding Quebec *MAP OF THE LAW P. 8 LAW 122 – CHAPTER 1: RISK MANAGEMENT AND SOURCES OF LAW 3 Public Law (P. 8)  Public law: concerned with governments and the ways in which they deal with their citizens  Includes: 1. Constitutional Law o Constitutional law: provides the basic rules of our political and legal systems o Determines who is entitled to create and enforce the laws o Establishes the fundamental rights and freedom that Canadians enjoy 2. Administrative Law o Administrative law: concerned with the creation and operation of administrative agencies and tribunals  Governments regularly delegate or assign responsibility to a variety of agencies, boards, commissions, and tribunals  Federal, Provincial, Territorial have different areas of the law that they cover o *ADMINISTRATIVE BODIES AFFECTING BUSINESS P. 9 3. Criminal Law o Criminal law: deals with offences against the state  Concerned with people who break rules that are designed to protect society as a whole o White-collar crimes: committed by people in suits, ex. Manager who steals money from the pretty-cash drawer o Corporate crime: crime committed by a company itself, ex. Used-car dealership adopts policy to roll back odometers on vehicles (fraud) 4. Tax Law o Tax law: concerned with the rules that are used to collect money for the purposes of public spending Private Law (P. 10)  Private law: concerned with the rules that apply in private matters  Private person can sue a public body  Government is also subject to private law rules when enters into private transactions (like they purchase paper from a store) LAW 122 – CHAPTER 1: RISK MANAGEMENT AND SOURCES OF LAW 4  3 main parts: 1. Law of Torts o Tort: a private wrong against a particular person o 3 categories: 1. Intentional torts  ex. assault and false imprisonment 2. Business torts  ex. Deceit and conspiracy 3. Negligence  situations in which one person carelessly hurts another 2. Law of Contracts o Tort of contracts: concerned with the creation and enforcement of agreements o Contracts are involved in: 1. sale of goods 2. use of negotiable instruments – ex. Cheques 3. real estate transactions 4. operation of corporations 5. employment relationships 3. Law of Property o Law of Property: concerned with the acquisition, use, and disposition of property o 3 main parts: 1. real property (land and things that are attached to lands) 2. personal property (things that can be moved from one place to another) 3. intellectual property (original ideas, patents and copyrights) o Areas of the law that deals with the distribution of a person’s property 1. law of succession – deals with distribution of person’s property after death 2. law of trusts – deals with a situation in which one person holds property on behalf of another  Overlap  Different areas can overlap: 1. single event can trigger more than one set of rules ex. If you punish me you have committed a crime and a tort 2. some situations involve various types of la
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