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LAW 122 (625)
Chapter 1

Chapter 1: Introduction to Law

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Law and Business
LAW 122
Susan Blackwood

Managing the Law Chapter 1 Introduction to Law Objectives1 Explain why is it important for business people to study lawy Depends on who you are y To understand not only the nature of government organizations but also the different types of laws that may affect you y To make good choices y To not take unnecessary risks 2 List three basic strategies for managing risks y Identification If you accuse your exemployee of theft she may sue you for defamation because your statement would cause a reasonable person to think less of herMore surprisingly if you unreasonably refuse to write a letter or if you write an unreasonably brief letter you may be held liable for reducing the exemployees job prospectsIn any event you need to be concerned about liability about actually being held responsibleBut you also need to be concerned about the possibility of being sued y Evaluation Having identified the risk of being sued for defamation you may decide that a candid letter would nevertheless be legally acceptableYour allegations may be trueEven if they are not you may be justified in sharing your suspicions with the other companyFurthermore you may believe that the arguments in your favour are strong enough to discourage your former employee from suing you y Response Finally having identified and evaluated the risks you need to formulate a responseYou have several optionsYou can refuse to write a letterYou can write a letter that does not mention your suspicionsOr you can write a letter that accuses your former employee of theft 3 List four strategies for risk management that businesses often use in different situations y Risk Avoidance Some risks are so serious that they should be avoided altogether y Risk Reduction Some risks can be reduced to an acceptable level through precautions y Risk Shifting Even if a risk cannot be avoided or reduced it may be shifted onto another partyTwo exceptionally important strategies for shifting risks insurance and exclusion clausesA company is vicariously liable for the actions of its employeesA company is not however vicariously liable for an independent contractor y Risk Acceptance It is sometimes appropriate to simply accept a risk Imagine a golf course that operates behind a factory It is possible that a wild shot might hit a factory window and that the golf course might be held responsible for the
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