Textbook Notes.docx

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Chapter 1
Risk management – the process of identifying, evaluating and responding to the
possibility of harmful events.
The three steps involved in risk management are identification, evaluation and
Business cannot exist and cannot profit unless it is willing to takes risks and
therefore the goal is not to eliminate them but to manage them.
Risk avoidance – some risks are so serious they should be avoided all together.
Risk reduction – reducing the risk to an acceptable level through precautions.
Risk shifting – if a risk cannot be avoided it can be shifted onto another party
normally in the form of insurance or exclusion clauses.
Risk acceptance – appropriate just to accept the risk and hope for the best.
Insurance – a contract in which one party agrees for a price to pay a certain
amount of money if another party suffers a loss.
Exclusion and limitation clauses – a clause that attempts to exclude all risks or
liability or limit the amount of compensation available.
Incorporating – One way to set up a business that benefits from limited liability.
This means the company itself, not directors or shareholders are responsible for
Many situations may require the help of a lawyer. Some businesses have an in-
house counsel that is a permanent legal department within the business.
Most people say laws are rules but not every rule is a law.
Jurisdiction – a geographical area that uses the same set of laws.
Civil law systems trace their history to ancient Rome. Most counties in Europe
and Quebec use this system.
Common law systems trace their history to England. The rest of Canada,
Australia, New Zealand and The USA (excluding Louisiana) use this system.
Public law is concerned with governments and the ways in which they deal with
their citizens. 4 types of public law are constitutional, administrative, criminal and
Constitutional law provides the basic rules of our political and legal system.
Administrative law is concerned with the creation and operation of administrative
agencies and tribunals.
Criminal law deals with offences against the state. It is concerned with people
who breaks rules that are designed to protect society as a whole.
Tax law is concerned with the rules used to collect money for the purpose of
public spending.
Private law is concerned with the rules that apply to private matters. It is divided
into 3 main parts: law of torts, contracts and property.
Tort – a private wrong, an offence against a particular person.
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Torts cover a great deal of territory and are therefore split into 3 categories:
intentional torts such as an assault, business torts such as deceit or conspiracy and
negligence which covers situations in which one person carelessly hurts another,
Law of contracts is concerned with the creation and enforcement of agreements.
Law of property is concerned with the acquisition, use and disposition of property.
Law of property is divided into 3 main parts: real property which involves land
and things attached, personal property which involves things that can be moved
from place to place and intellectual property which involves things that consist of
original ideas, patents and copyrights.
Constitution – the document that creates the basic rules for Canadian society,
including its political and legal system
Every law in Canada must be compatible with the constitution and the
constitution is very difficult to change
The constitution can only be changed through an amending formula in which the
consent of the parliament plus the legislatures of at least 2/3 of the provinces,
where those consenting provinces represent at least 50% of the population
Canada is a federal country because it has two levels of government
Parliament is composed of the House of Commons consisting of elected MPs and
the senate consisting of appointed senators. The queen of England remains our
head of state
Each province has a legislature where MLAs are elected
Division of Power – states the areas in which each level of government can create
Residual power – give the federal government authority over anything that is not
specifically mentioned
When a government tries to create a law outside its own area it acts ultra vires
Doctrine of federal paramountcy – determines which law is pre-eminent based on
the constitutions division of power
Canadian Charter of Rights and Freedoms was created in 1982 to protect basic
rights and freedoms
Any law that is inconsistent with the charter has “no force or effect”
The charter does not contain property or economic rights
The charter only applies to government and does not directly apply to disputes
involving private parties
The charter is subject to “such reasonable limits prescribed by law as can be
demonstrably justified in a free and democratic society”
Government can create or enforce a law notwithstanding the fact that it violates
the charter
Parliamentary supremacy – while judges are required to interpret constitutional
and statutory documents they must also obey them
Legislation – law that is created by parliament or legislature
Most important kind of legislation are statutes or acts
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Bills go through 2 readings, then a legislative committee for detailed study
followed by a third reading. Three readings are then repeated in the senate,
afterwards a final approval is given by the governor general
Subordinate legislation – the term given to rules that are created with the authority
of parliament or legislature
By-law – a type of subordinate legislation that is created by municipality
Common law has three different meanings depending on whether it is referring to
a system of law, a source of law, or a type of court
The court of equity originally made decisions based on fairness
The court of equity eventually developed rules but they are more flexible and may
be willing to grant specific performance
Chapter 2
Litigation – the system of resolving disputes in court
Class action – allows a single person, or a small group of people to sue on behalf
of a larger group of claimants
Primary attraction of class action is to allows small individuals to take on large
corporations, it is also easier to find a law firm willing to take on a large
corporation for larger amounts of money
The basic ideas for class action suits are: common issues, representative plaintiff,
notification, preferable procedure and certification
Certification is usually the most important step in the entire process. This is often
enough to persuade the defendant to settle
Self-representation is going into court to represent yourself without a lawyer. This
is often recommended for small claims court but litigation is often long and
complicated for other cases.
A person cannot act as a lawyer until completing law school, an apprenticeship
period known as period of articling and passed the bar exam
Professional liability insurance – allows a client to receive compensation from the
lawyers insurance company if the lawyer has acted carelessly
Assurance fund – provides compensation to people who are hurt by dishonest
Paralegal – a person who is not a lawyer but who provides legal advice and
Paralegals are particularly common in small claims court and landlord and tenant
Paralegals still differ from lawyers cause they are limited to certain types of work
and cannot perform services such as drafting wills or real estate transactions
Pleadings – the documents that are used to identify the issues and clarify the
nature of a dispute
Plaintiff – person who is making the complaint
Defendant – person about whom the complaint is being made
Limitation period – a period of time within which an action must be started
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