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COMM 393 - Textbook Notes
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Department
Commerce
Course
COMM 393
Professor
Patricia Mallia
Semester
Fall

Description
COMM 393 – Commercial Law Dispute Resolution Sources of Law (p. 10­20, 22­30) [Chapter 1 – Law, Society, and Business] Who makes law? • Constitution – basic law from which all other laws draw their power; all other laws must comply with the constitution in order to be valid and enforceable o Sovereign – monarch, government • Legislation – statute law, statutes (piece of legislation passed by government), acts o Passed by Parliament, provincial legislatures o Subordinate legislation – e.g. federal or provincial cabinet, cabinet minister, administrative body (CBC) – regulations o Administrative rulings – created by legislation to hear complaints and applications by individuals and groups • Court decisions – judgments handed down by 1/panel of judges after hearing case before court o case law – collection of individual cases decided by courts, develop and shape legal principles What do courts do? • They determine the validity of legislation • They interpret legislation • They protect human rights • They develop case law, creating new principles to be applied to resolve disputes without court intervention • They determine disputes for the parties before the courts COMM 393 – Commercial Law The Courts and Legislation • Court decides if statute is valid and enforceable o If valid  court decide what the words of statute mean, whether interpretation covers subject of dispute • Canada – validity depends on Constitution Federalism and the Constitution • 2 levels of government: federal and provincial o Constitution Act, 1867 – each level has independent existence, own activities o Section 91, 92 – division of legislative power o National Parliament cannot alter structure of provincial gov’t • Provision outside jurisdiction -> beyond the powers (“ultra vires”) -> act/provision is void • Residual powers – powers that fall within federal jurisdiction because they are not expressly allocated to the provinces by the Constitution o E.g. new activities developed after 1867, air traffic, radio and TV broadcasting • Concurrent powers – overlapping powers of both levels of gov’t to regulate the same activities • Conflict arises between statutes  federal legislation prevails o Need uniformity across Canada for federal th • Early 19 century Supreme Court of US – neither federal nor state have last word on interpreting US Constitution; Canada too o Supreme Court – final arbitrator and umpire between two levels of gov’t The Charter of Right and Freedoms • Charter of Rights and Freedoms, 1982 – part of Constitution o Places limits on many aspects of government action and protects human rights • Human rights – recognized entitlements encompassing traditional freedoms associated with civil liberty and basic human necessities • S. 92 of Constitution – “property and civil rights” as provincial responsibility • Private rights – individual rights arising from private law o Ownership of property, contract law, and family relations COMM 393 – Commercial Law • Charter is entrenched in the Constitution; cannot be repealed by act of Parliament/Legislature o S. 52 (1) – The Constitution of Canada is the supreme law of Canada… • Rights cannot be infringed upon by ordinary legislation; statute offends right in Charter = invalid • Charter includes section 33 – permits a legislature to override certain other sections o “shall operate notwithstanding” – legislature may infringe some of the most important rights guaranteed by Charter o Sunset clause – overriding of section of statute expires 5 years after it comes into force, unless it s re-enacted by legislature  Declaration of certain rights in Constitution gives great moral and political force  Need strong reasons, only limited purposes • None of the rights set out in the Charter is absolute o Section 1: all subject “to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society”  Problem of “reasonable limits” – e.g. claim freedom of expression • Statue is presumed to be valid o Person has to show only one of his constitutionally guaranteed rights has been infringed by a provision in a statute -> presumed invalid unless government could persuade court that infringement was “demonstrably justified” • Burden – requirement that unless party can establish facts and law to prove its case, it will lose • Charter applies to governments and governmental activities – limited application between private persons o Private sector – protection of human rights -> human rights codes [The Rights and Freedoms Protected by the Charter – p. 15­17] • Fundamental Freedoms – Section 2: conscience, religion, thought, belief, opinion and expression, peaceful assembly, association • Legal Rights – Section 7-11: security, liberty, right on arrest or detention, etc. • Equality Rights – Section 15: o (1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability o Subsection (2): permits “affirmative action” (“reverse discrimination”) – programs aimed at assisting disadvantaged people o Section 28: “Notwithstanding anything in this Charter, the rights and freedoms referred to in it are guaranteed equally to male and female persons.”  Not subject to being overridden by Parliament/legislature; equality of treatment between sexes COMM 393 – Commercial Law • Democratic Rights – Section 3: right to vote • Mobility Rights – Section 6: citizen has right to enter, remain in, leave Canada The Significance of the Charter for Business • Gov’t regulates and controls business environment through legislation Challenging the Validity of a Statute • Court can declare a statute invalid if: o Subject matter is outside constitutional jurisdiction of government, or o Statute violates the Charter of Rights and Freedoms • Court must investigate purpose and effect of statute • Interpreting legislation in narrow way may mean that it falls inside the power of gov’t; broad interpretation may lead to invalidity • Judges of Supreme Court – make decisions of critical role in political, social, economic change [Chapter 2 – The Machinery of Justice] Classifying Law • Public law (dealing with government) o Constitutional law, criminal law, taxation • Private law (non-government relationships) o Contracts, torts, property law • Business law = both public and private law • Substantive law – rights and duties that each person has in society; “WHAT” the law is o Right to own property, vote, enter into contracts, obey traffic laws, customs regulations, duty to avoid injuring others and to perform contractual obligations • Procedural law – rules that deal with how substantive rights and duties may be enforced/protected; “HOW” the law is enforced Who Makes Law? • Government through legislation (federal, provincial, local) COMM 393 – Commercial Law • Courts through case decisions Legal Systems: Civil Law and Common Law Regions of the World Under Each System • Civil Law – (Quebec, Western Europe, Africa, South and Central America, Mexico) o Most of private law of Quebec is civil law o System of law involving a comprehensive legislated code, derived from Roman law that developed in continental Europe and greatly influenced by the Code Napoleon of 1804) o Based on legislation – court refers to the code to settle dispute; reason by analogy to settle problem form general principles • Common law – originated in England; most of English-speaking world, British Empire o Based on case law – recorded reasons given by courts for their decisions and adapted by judges in later cases The Need for Consistency and Predictability  • Like cases to be treated alike – equal and consistent treatment • Predictability – find out where they stand, act with reasonable certainty o Explain how cases are linked – judges develop principles that describe connection  Principles -> body of doctrine (framework of predictable rules) o Civil law – judges mostly try to decide similar cases in same way, no binding rule Common Law: The Theory of Precedent Certainty Vs. Flexibility • Theory of precedent – custom of following already decided cases o Stare decisis – stand by previous decisions o Follow rules slavishly even when circumstances changed -> inflexible, harsh • Not absolute o Judges may be influenced by prior decisions; only bound to follow decisions of higher level court; Decisions of lower court – influential value only COMM 393 – Commercial Law o Precedents bind only the same circumstances • Distinguish – identify factual difference that renders a precedent inapplicable to the case before court – dwell upon minor differences Accommodating Change • Overrule – declare existing precedent no longer binding or effective; when contemporary standards call for a change o Addressed by a court higher than one establishing initial precedent The Sources of Law The Variety of Sources • Judge-made law is oldest form of law • Government source of law – legislation (Parliament, provincial legislature), statutes, acts • Statute law – municipal by-laws and regulations • Subordinate legislation – administrative law: statutes grant authority to administrative agencies of gov’t in order to carry out purposes of legislation Statutes • Codify – set down and summarize in a statute the existing common law rules governing a particular area of activity, rather than change laws • Strict interpretation – courts apply provisions of statute only when the facts of the case are covered specifically by the statute o Literal approach – statutory interpretation, consider legislative intent, purpose, history of statute, context of language • Federal Interpretation Act – court to take “fair, liberal and large” interpretation of statutes Legislation Framework • Passive – statutes that change the law – prohibit activity formerly permitted, enable people to carry on a formerly illegal activity; does not presume to supervise and regulate activities “Active” Legislation: Administrative Law and Government Programs • Gives government itself power to carry on a program – levy taxes, provide revenue for purpose stated in statute (eg. building hospital, paying pensions) COMM 393 – Commercial Law • Executive – agencies of government that carry out Parliament’s will • Every gov’t department, agency, tribunal – established by legislature in a statute o Broadcasting Act -> Canadian Radio-Television and Telecommunications Commission Subordinate Legislation  • Some set down broad criteria, others may be detailed and technical (fees for application, etc) • Important regulations -> approval of Cabinet -> order-in-council • Administrative law – in terms of labour relations, consumer protection, financing and operation of corporations Case Law: Judge­Made Law The Common Law • Early common law precedents borrowed from canon law (Church), Roman law, feudal law (land ownership), merchant law (trade) Equity  • Common law rules became more precise and increasingly strict • Writ – ancient form required in order o take a grievance to court • Aggrieved parties without remedy would petition the king -> king’s chancellor took over administering them • Courts of chancery – system of courts under king’s chancellor, developed from hearing petitions to the king – courts of equity • Equity – rules developed by courts of equity as exceptions to existing rules of common law • Equitable remedies – such as specific performance – order by court of equity to carry out biding obligation • Contempt of court – finding by a court that a party as refused to obey it and will be published Merger of the Courts • 1865 – British Parliament – passed act merging courts of common law and equity • Every judge – 2 mind: equity and common law COMM 393 – Commercial Law • Equity provides conscience for modern common law – prevents from straying far from reason and fairness; link between law and ethics Court Systems and Procedures (p. 32­46) • Provincial jurisdiction – administration of justice, police forces, courts • Federal – trade and commerce, banking, bankruptcy, criminal law, exclusive right to appoint, obligation to pay, all Superior Court judges • Constitution: may have local bias, place in hands of national government oQualified lawyers to Superior Court; hold office until retirement, removed only by “joint address” (vote -House of Commons and senate)- unbiased, immune from local pressures The Provincial Court System - Private and public law The Courts of First Instance - Trial courts; witness give evidence, initial judgments made - Topic of dispute -> trial court (inferior trial court – provincial legislation; superior trial courts – federally appointed judges) • Small Claims Court – private disputes for smaller amounts of money,
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