Duplessis.SG.Chapter 1.pdf

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Department
Management and Organizational Studies
Course
Management and Organizational Studies 2275A/B
Professor
Henry Meredith
Semester
Winter

Description
CHAPTE1:KNOWLEDGE OF LAW AS A BUSINESS ASSET C HAPTER 1 K NOWLEDGE OF L AW AS A B USINESS A SSET Objectives After studying this chapter, you should have an understanding of: • the role of law in guiding conduct • the importance of legal knowledge in the business environment • the challenges posed by business ethics and their relationship to legal requirements Learning Outcomes • Understand the role of law in the business environment (page 4) • Understand the purpose of laws (page 5) • Understand how legal disputes are resolved (page 9) • Understand the values of the Canadian legal system (page 11) • Recognize that knowledge of law is a business asset (page 12) Chapter Summary Law is involved in all aspects of business, whether the entrepreneur is aware of it or not. The law protects persons and their propeitates comm ercial inte ractions, pa rticularly through contract law; and provides m echanisms for dispute resolution. Though not perfect, the Canadian legal system has much to recomme nd it. The system strives for just outcomes by demanding that both the process for determ ining liability and the rules or laws that are applied I that process are fair, objective, and free from bias. No justice system, of course, can consistently accomplish all these goals. Indeed, there are serious limitations to what the law can realistically achieve when a legal problem arises; thus, it is imperative that a business adopt a proactive approach in m anaging the legal aspects of its environment through a legal risk management plan. An e mphasis is placed on the idea that knowlndge of the law is a essential business asset. Inform ed owners and managers can pro tect their bus inesses by ensuring compliance with legal req uirements. They can capitalize on the planning function of law to ensure the future of their business by entering into contracts . They also can seek enforcement of legal rules against those who do business or have other interactions with the enterprise. In th is wa y, the property, contractual expectati ons, and profitability of the business are m ade m ore secure. Buethics – w hile som etimes but not always coextensive with legal requirements – are also increasingly important to running a successful business. 1 PART1:THE LEGAL ENVIRONMENT OF BUSINESS Study Outline Use this outline to prepare a complete set of notes for this chapter. Rules and Principles – page 5 ______________________________________________________________________ ______________________________________________________________________ Protecting Persons and Their Property _______________________________________ Sets rules of behaviour ________________________________________________ Enforces rules of behaviour ____________________________________________ Facilitating Interactions __________________________________________________ Creates certainty _____________________________________________________ Providing Mechanisms for Dispute Resolution ________________________________ Litigation __________________________________________________________ Mediation __________________________________________________________ Arbitration __________________________________________________________ SELF-ASSESSMENT Key Terms Briefly define each term in the space provided Spam – page 3 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Business law – page 4 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Law – page 5 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Breach of contract – page 5 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Copyright © 2011 by Nelson Education Ltd. CHAPTER1:KNOWLEDGE OF LAW AS A BUSINESS ASSET Contract law – page 8 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Litigation – page 9 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Mediation – page 10 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Arbitration – page 10 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Liability – page 10 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Legal risk management plan – page 13 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ Business ethics – page 13 ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 3 PART1:THE LEGAL ENVIRONMENT OF BUSINESS Matching Match the correct letter of each term in the space provided before each sentence. A Business law B Law C Breach of contract D Contract law E Litiga tion F Mediation G Arbitra tion H Liability I Spam J Business Ethics 1. ____ Legal responsibility for a loss. 2. ____ Failure to comply with a contractual promise. 3. ____ Parties try to settle a dispute with the help of a neutral party. 4. ____ Unsolicited e-mail advertising a product or service. 5. ____ A set of rules and principles that guide our conduct. 6. ____ Moral principles and values that seek to determine right and wrong in the _ business world. 7. ____ The process whereby a neutral third party makes a binding decision to settle a dispute. 8. ____ Rules that govern commercial relationships. 9. ____ Rules that make agreements binding. 10. ____ The process involved when one person sues another. Questions Write a short, poin t-form answer for each ques tion in the space prov ided. To assist you in understanding the chapter, it is recommended that you also us e additional paper to write a full and complete essay answer for each question. 1. Outline five purposes of business law. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 2. How can knowledge of business law assist owners and managers in reaching their business goals? ______________________________________________________________________ Copyright © 2011 by Nelson Education Ltd. CHAPTER1:KNOWLEDGE OF LAW AS A BUSINESS ASSET ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 3. How can lack of knowledge of business law harm a business? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 4. What is the broad definition of the law? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 5. How does law protect business interests? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 6. How does the law provide protection to members of society? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 7. How does contract law facilitate commercial interactions? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 8. How does the law facilitate commercial relations? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 5 PART1:THE LEGAL ENVIRONMENT OF BUSINESS ______________________________________________________________________ ______________________________________________________________________ 9. What is the function of business law? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 10. Identify the recommendations put forth that would prevent US lending institutions from compromising world markets. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 11. Outline four mechanisms to resolve disputes. What is the problem with some traditional methods for resolving disputes? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 12. What is the problem with some traditional methods of resolving disputes? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 13. Who is obligated to prove the case when a breach of contract claim is made? What is the role of the judge with respect to this obligation? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 14. Identify the rule of law pertaining to parties who suffer a breach of contract and explain the rationale behind that rule. ______________________________________________________________________ Copyright © 2011 by Nelson Education Ltd. CHAPTER1:KNOWLEDGE OF LAW AS A BUSINESS ASSET ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 15. How can a business person avoid negative business experiences and enhance returns? ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 16. Identify the perspective that would consider mere compliance with the law as inadequate. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 17. Describe the relationship between law and business ethics, and between the business ethics and the entrepreneur. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 18. Describe an ethical issue that can arise with regard to labour practices. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 19. Describe an ethical issue that can arise with regard to employee privacy. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 20. Describe an ethical issue that can arise in relation to businesses and the environment. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 7 PART1:THE LEGAL ENVIRONMENT OF BUSINESS ______________________________________________________________________ ______________________________________________________________________ 21. Identify the business consequences that can arise from s kirting or violating ethical norms. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ 22. Identify the various forms that a business enterprise may take. ______________________________________________________________________ ______________________________________________________________________ _______________
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