B LAW301 Chapter 1: Chapter 1

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28 Sep 2017
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Chapter 1
Tuesday, September 26, 2017
Contract: a legal concept that allows people to create
enforceable
promises.
Risk Management
-process of identifying, evaluating, and responding to the possibility of harmful
events.
There are 3 steps:
1. Identification : recognition of legal risks
2. Evaluation : assessment of legal risks
3. Response : reaction to legal risks
Risk Management Strategies
Risk Avoidance
Risks that should be avoided altogether.
Risk Reduction
Risks that can be reduced to an acceptable level through caution.
Ex. If a company loans money, and the bank recognizes the risk of not being
paid back, the bank may seize property of the company.
Risk Shifting
Even if the risk may not be avoided or reduced, it can be shifted onto another
party.
Ex. Insurance and Exclusion Clauses
A company is vicariously liable for the actions of its employees.
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Risk Acceptance
Simply accepting the risk.
Examples of Risk Management Techniques:
1. Insurance : a type of contact with 2 parties involved; the
insured
, and the
insure
r.
The insured pays a price called the premium while the insurer promises to
pay a price in case there is a loss.
Liability Insurance
Property Insurance
2. Exclusion and Limitation Clauses : clause in a contract that changes the usual
rules of liability. The clause may attempt to exclude all risks of liability or
amount of compensation that is available.
3. Incorporation : limited liability. Shareholders are not liable for the company's
actions.
___________________________________________________________________________________________
SUMMARY:
Risk Management Steps:
1. Identification
2. Evaluation
3. Response
Risk Avoidance Strategies
Risk Avoidance, Risk Reduction, Risk Shifting, Risk Acceptance
__________________________________________________________________________________________
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The Nature of Law
All laws are rules but not all rules are laws.
A law is a rule that can be enforced by courts.
Morality and Law : moral wrongs are informally sanctioned.
Legal wrongs are formally sanctioned.
Public International Laws
-cover a range of activities such as diplomatic relations, conduct of war, trade,
human rights, and sharing of oceanic resources.
Public laws are voluntary commitments as countries enjoy sovereignty.
The Map of the Law
Civil Law
-traces back to ancient Rome and Quebec.
Common Law
-traced to England and Canada (except Quebec).
Categories of Law
Substantive Laws : rules determining behavior.
Ex. Speeding
Procedural Laws : how the legal process works; more than 50% of laws.
Public Laws : regulates our relationship with the government.
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