AFM 231 Notes Chp 1 -7.pdf

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Accounting & Financial Management
AFM 231
Sally Gunz

Canadian Businessthe LawChapter 1The Legal Environment of BusinessLaw in the Business EnvironmentBusiness Law is a set of established rules that governs commercial relationships including the enforcement of ghtsDenes general rules of commerceProtects business ideas and more tangible ideas and more tangible forms of propertyProvides mechanisms that allow business people to select their desired degree of participation and exposure to business riskSeeks to ensure that losses are suffered by those who are responsible for themAllows for planning by ensuring compliance with commitmentsLaw The set of rules and principles guiding conduct in societyThe law protects members of society by setting rules with penalties in order to encourage compliance and it seeks to make those break the law accountable for their misconductThe law protects businesses by setting penalties and ensuring accountability It also ensures that losses are paid for the parties responsible for creating them For example if a law gives negligent advice to a client that client can sue the rm for losses associated with the adviceBreach of Contract Failure to comply with a contractual promise eg a supplier failing to deliver a product under contractContract Law Rules that make agreements binding and therefore facilitate planning and the enforcement of expectations Allows business enterprises to plan for the future and enforce their expectationsThe law functions primarily to prevent disputes and facilitate relationships it provides a denition and context to doing businessThe law creates certainty in business relationships within commercial interactionsLitigation The process involved when one person sues anotherA contract provides a legal backdrop to any business relationship The business relationship determines whether or not strict legal rights should be insisted upon It is usually better for a business relationship to be understanding and allowing rather than to sueWhen a business comes across a legal conict the rst logical step is for the parties to try to come to a resolution by themselves to produce a formalized agreement Mediation and arbitration should be the next steps to avoid litigationMediation The process in which the disputing parties come to a resolution with the assistance of a neutral personArbitration The process in which a neutral party makes a decision in order to resolve a disputeUltimately a legal system should provide a just fair and reasonable method of resolving a dispute The law should be able to determine liability in accordance with certain principles and processes that are regarded as justLiability Legal responsibility for the event or loss that has occurredSuing The process of instituting formal legal proceedings against someone to enforce a rightCanadian Businessthe LawThe Canadian legal system demands that both the process for determining liability and the rules or laws that are applied in that process are fair and free from biasPart of the judges job is to be as objective as possible determine what the actual argument of the parties was as well as the law governing the matterVALUES OF THE CANADIAN LEGAL SYSTEMThe same law applies to everyoneBroad applicationFair and impartial judgesThe law is to be applied by someone who is free from biasThe law must deal with similar cases in similar waysConsistencyThe law must be accessible and understandableAccessibilityAny change in the law must be gradual so that the rules remain reasonably Constancycertain and predictableThe law must keep up with developments in business and society and must be Flexibilityable to change with the timesReasonablenessThe law must set standards of behaviour that are defensibleEnforcementThe law must be capable of enforcement People who believe that have been wronged must have a forum at which their complaints can be heard and redressedThe goal of justice is achieved when the legal question is assessed by an objective impartial and neutral judge who applies laws that are fair and transparentCanadian Businessthe LawChapter 2The Canadian Legal SystemIntroductionLiberalism A political philosophy that raises individual freedom and autonomy and its key organizing value The Canadian legal system tries to follow this philosophyConstitutional law The body of law governing the individualstate relationship including the permissible scope of legislative power It supplies the basic legal structure for Canadian society providing for such manners as branches of government creation of legislation rules constraining what kinds of law governments can put in place and the sources of lawGovernment policy The central ideas of principles that guide government in its work including the kinds of laws it passesBusinesses need to be aware of government operations because governments enact many rules that affect themLegislative Bodies in CanadaFederalAlso known as Parliament has 2 bodies the House of Commons and the SenateThe House of Commons is made up of representatives elected from across Canada and part of their job is to pass legislation which then the Senate must approve of before it can become lawThe Senate is made up of appointed membersProvincialEach province has its own law making body no Senate or upper houseMunicipalEach municipality has a city council which exercises powers given to them by their provinceThe Legislative Branch of GovernmentLegislative branch Creates statute law eg The Criminal Code of Canada 3 levels of government that make statute law Federal Provincial and MunicipalStatute law Formal written laws created or enacted by the legislative branch of governmentConstitution Act 1867 Dictates whether each level of government can make a given law or not each level of government has the jurisdiction to pass laws within its proper authorityJurisdiction The power that a given level of government has to enact laws
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