1. Define Risk Management.
Process of identifying, evaluating, and responding to the possibility of harmful events
2. What are the 3 steps that are involved in risk management?
o Recognize legal risks (Can we be held liable for this?)
o Assessment of legal risks (What are the chances of something going wrong?)
o Reaction to legal risks and making a decision (What are we going to do about it?)
3. What are the 4 forms of risk management?
o Eliminating the risk completely
o Example: Withdrawing a dangerous product from the market
o Minimizing the risk
o Example: Modify a product in order to reduce possible danger
o Making the risk someone else’s problem
o Example: Buy liability insurance for losses caused by danger (“We are not
o Living with the risk
o Example: Doing absolutely nothing at all 4. What is insurance?
A contract in which one party agrees, in exchange for a price, to pay a certain amount of
money if another party suffers a los
5. How is incorporation used for the purposes of risk management?
Most significant benefit of incorporation is limited liability
This is where only the company itself, not the directors or shareholders, are held liable
Limited liability doesn’t protect people from all risks
o Employees, directors, and officers may be held liable for torts that they commit
6. What is in-house counsel?
An attorney that is employed exclusively by a business or government department
Instead of hiring lawyers when needed, a company can choose to create its own
permanent legal department
This option provides more efficient risk protection
7. What is the difference between public law and private law? Can the government ever be
involved in a private law case?
Public: Concern with governments and the ways in which they deal with their citizens
o Constitutional Law: Basic rules of our political and legal systems
Determines who is entitled to create and enforce laws
Establishes the fundamental rights and freedoms
o Administrative Law: Concerned with the creation and operation of administrative
agencies, boards, and tribunals Example: A human rights tribunal decides that a corporation discriminated
against women by paying them less compared to men
o Criminal Law: Deals with offenses against the state
Concerned with people who break rules that are designed to protect
Example: If you punch someone, you have committed a tort because you
did something wrong to that person. You would also commit a crime
because you did something wrong to the entire community as a whole
White-Collar Crime: Crimes committed by people in suits, such as
Corporate Crime: Crimes committed by a company itself
o Tax Law: Concerned with the rules that are used to collect money for public
Private: Concerned with the rules that apply in private matters
o Both parties in a private dispute are private persons, which are people or
organizations such as corporations
o Law of Torts
Tort: A private wrong, an offence against a certain person
Intentional Torts: Assault and imprisonment
Business Torts: Deceit and conspiracy
Negligence: One person carelessly hurts another
o Law of Contracts: Concerned with the creation and enforcement of agreements
Sale of goods Use of negotiable instruments (Cheques)
Real estate transactions (Purchase of land)
Operation of corporations
Employment relationship (Between a business and their employees)
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 are moved from one place to another
Intellectual Property: Things that consist of original ideas (Copyrights)
Law of Succession: Distribution of a person’s property after death
Law of Trusts: Situation where one person holds property on behalf of
8. What is significant about section 217.1 of the Criminal Code?
Duty of persons directing work
A company can be convicted on the basis of acts performe