Textbook Notes (369,028)
Canada (162,352)
LAW 122 (625)
Jane Monro (29)
Chapter 1

Chapter 1 Risk Management & Sources of Law

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Law and Business
LAW 122
Jane Monro

Chapter 1 Risk ManagementSources of LawRisk Management is the process of identifying evaluating and responding to the possibility of harmful events You should Identify Evaluate and Response to legal risksRisk Avoidance some risks are so serious that they should be avoided Example a car that explodes often should be removed from market because the financial costs of being held liable will probably outweigh any sales profitRisk Reduction some risks can be reduced to an acceptable level through precautions Example bank lends a million to company and realizes that if theres a recession they wont be able to get back the money therefore requiring the business to grant a mortgage over the factoryRisk Shifting if the risk cannot be avoided or reduced it may be shifted onto another party Example if an employee operates a crane and hurts a bystander the company is vicariously liable for the actions of the employee however if it was an independent contractor then they are notExclusion and Limitation Clause A clause in a contract that changes the usual rules of liability The clause may attempt to exclude all risk of liability or it may exclude liability for certain types of actslosses or it may limit the amount of compensation available Insurance is a contract in which one party agrees in exchange for a price to pay a certain amount of money if another party suffers a loss Liability Insurance provides a benefit if the purchaser is held liable for doing something wrongProperty Insurance provides a benefit if the purchasers property is damaged lost or destroyed Risk Acceptance it is sometimes appropriate to accept a risk Incorporation Corporations benefit is having limited liability The company itself and not the directors or shareholders may be held liable to debtsNature of Law Law is a rule that can be enforced by the courts Moral obligations and law obligations may differJurisdiction refers to a geographical area that uses the same set of laws Civil Law systems trace their history to ancient Rome Quebec is the only one that has a civil law jurisdiction in Canada Common Law systems trace their history to England
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