Chapter 1: The Law and the Legal System:
The law may be subdivided into three functions: settling disputes, establishing rules of conduct, and
providing protection for individuals.
Common Law: The law as found in the recorded judgements of the courts.
Statute law: A law passed by a properly constituted legislative body.
Stare Decisis is the theory of precedent in Common Law. The doctrine means that a judge must apply
the precious decision of a case similar to the one before the court if the facts of the two cases are the
same, providing such a decision was (1) from the judge’s own court, (2) from a court of equal rank, or (3)
from a higher (or superior) court.
In cases of identical facts only the Supreme Court of Canada has the unrestricted ability to overrule its
previous decision, and even then it does so only with caution.
The facts of any two cases are seldom precisely the same. Differences in the facts or circumstances are
sufficient to permit a judge to decide that a particular obsolete precedent should not apply to the case
before the court if the application of such a precedent would produce an unsatisfactory result.
A judge may apply either the Common Law rules or the principles of equity to a case before the court
and if the Common Law is inappropriate, the equitable remedy is usually available to ensure a fair and
Statutes are the product or end result of a legislative process. Under this process, the wishes of the
people, as interpreted by the members of a provincial legislature or the Parliament of Canada, are
brought forward for debate in the legislative assembly. They then finally become law if the majority of
the legislators believe that the law is necessary.
A statute law has its beginning in a bill, which is a proposed law presented to a legislative body (such as
the House of Commons or a provincial legislature). The bill then requires a motion (or decision) to have
the bill read a first time and printed for circulation. Once a bill has been passed by the House of
Commons and Senate or the provincial legislature, it must receive royal assent by the Governor General
(federally) or the Lieutenant-Governor (provincially). Royal assent is largely automatic, as it has never
been refused at the federal level. This has not been the case with provincial bills, however, as royal
assent has been refused on numerous occasions in the past.
Statute law can be used to create laws to cover new activities or matters not covered by the Common
Law, or to change or abolish a Common Law rule or right. Statutes may also be used to codify the
Common Law by collecting together in one written law the Common Law rules or principles relating to a
specific matter. The particular advantage of statute law over the Common Law is the relative ease by which the law may
be changed. The Common law is generally very slow to respond to changing societal needs. It follows a
gradual, evolutionary pattern of change, rather than a quick response. Statute law, on the other hand (in
theory at least), may be quickly changed in response to the demands of the public. The disadvantage of
statute law is that it will be strictly interpreted by the courts.
Administrative law: A body of rules governing the application of statutes to activities regulated by
administrative tribunals or boards.
The primary focus of this body of law is directed toward the regulations made under statute law and
enforced by administrative bodies. While legislation usually creates laws or repeals old laws, it may also
create agencies or administrative tribunals to regulate activities or do specific things. Examples of some
of the activities under the control of regulatory agencies include the sale of securities by public
companies, labour relations, employment standards, aeronautics, broadcasting, the sale and
consumption of alcoholic beverages, land use, and a wide variety of commercial activities.
The Constitutional Foundations of Canadian Law:
Countries have adopted some form of written authority that sets out both the fundamental rights and
freedoms of their citizens and the law-making powers of the various legislative bodies of the state. This
document is referred to as the constitution.
The Canadian Constitution:
The Canadian constitution is also a formal written document that sets out the rights and freedoms of
Canadians (the Canadian Charter of Rights and Freedoms) and the powers of the federal government
and the provinces.
The constitution of Canada is divided into two parts: the first contains a Canadian Charter of Rights and
Freedoms; the second contains an amending formula, some additional changes in the power of
government, and what was previously the contents of the British North America Act, 1867, as amended.
The Canadian Charter of Rights and Freedoms:
The rights and freedoms stated in the Canadian Charter of Rights and Freedoms can only be repealed or
amended by an Act of Parliament consented to by at least two-thirds of the provinces that together
contain at least 50 percent of the country’s population.
This charter includes
1. Fundamental Freedoms
2. Mobility and Personal Liberty – Canadian citizens are free to remain in, enter, or leave Canada,
and to move freely within the country. 3. Right to Due Process – the right to be informed, on arrest or detention, of the reasons for the
arrest, and the right to retain and instruct a lawyer promptly after the arrest or detention has
4. Equality Rights – every individual is equal before the law.
5. Enforcement of Rights – the charter protects individual rights and freedoms from unreasonable
restriction or interference by governments or persons acting on their behalf. It also protects the
rights of these same individuals to carry on business without undue government interference or
Classification of Laws:
Statute law and Common law may be classified into two broad, general categories.
1. Substantive law – all laws that set out the right and duties of individuals.
2. Procedural law – includes all laws that set out the procedures by which individuals may enforce
their substantive law rights or duties.
Substantive law can be further divided into two other types of law:
1. Public law – deals with the law relating to the relationship between the individual and the
government (or its agencies)
2. Private law – deals with the relationship between individuals, and includes all laws relating to
the rights and duties that the parties may have, or may create between themselves. Much of the
Common Law is private law, but many statutes also represent private law. The law of contract,
the Partnerships Act and the Sale of Goods Act are all examples of private law. CHAPTER 2: THE JUDICIAL SYSTEM:
The Structure of the Judicial System:
Courts of law can be placed in two rather general classifications
1. Courts of original jurisdiction – Courts before which a dispute or case is heard for the first time
by a judge and where all the facts are presented o that the judge can render a decision. They are
sometimes referred to as trial courts where both civil and criminal cases are first heard.
2. Courts of appeal – these courts hear appeals from the decisions of courts of original jurisdiction.
Courts of appeal are superior courts in that their decisions may overrule or vary the decisions of
the trial courts.
In Canada the federal court also exists to deal with matters that fall within the exclusive jurisdiction of
the federal government. The Federal Court Trial Division hears disputes between provincial
governments and the federal government. A trial decision of the Federal Court may be appealed to the
Federal Court of Appeal, and the appeal with leave to the Supreme Court of Canada.
Magistrate’s or Provincial Court – A court of original jurisdiction that is presided over by a provincially
appointed magistrate or judge. This court generally deals with criminal matters relating to accused
individuals or corporations, although many provinces have empowered the court to hear cases involving
the violation of provincial statutes and municipal by-laws where some sort of penalty is imposed.
Provincial Supreme Court – Each province has a Supreme Court or Superior Court empowered to hear
the most serious criminal cases. Ontario calls this court the Supreme Court of Justice.
Youth Courts – Youth Courts are particular courts designated in each province to deal with cases where
young persons are accused of committing criminal offences.
Family Courts – Family Courts, while not criminal courts in the ordinary sense, have jurisdiction to deal
with domestic problems and the enforcement of federal and provincial legislation that relates to family
Criminal Courts of Appeal – Each province has a Court of Appeal to review the convictions of accused
persons by the Youth Court, Supreme Court, or Magistrate’s (or Provincial) Court. A panel of judges
presides over the Appeal Court and the decision of the majority of the judges hearing the appeal decides
Civil Courts – Most provinces have a number of civil courts to deal with disputes that arise between
corporations or individuals, or between corporations or individuals and the government.
*Courts of Appeal are always non-jury courts Small Claims Court – They have jurisdiction to hear cases where the amount of money involved is
relatively small. (amount of money involved is less than $10,000). The cases the courts hear are usually
small debt or contract disputes, and damage cases, such as claims arising out of minor automobile
Provincial Supreme Court – Each province has a Supreme Court to hear civil disputes in matters that are
beyond or outside of the jurisdiction of the lower courts.
Surrogate or Probate Court – It is established to hear and deal wills and the administration of the estates
of deceased persons. In Ontario, Newfoundland, Quebec, British Columbia, Manitoba, and Prince
Edward Island do not have special courts to deal with these matters, but, instead, have placed them
under the jurisdiction of their Supreme Courts.
The Judicial System in Action:
Criminal Court Procedure:
The Provincial Court (Criminal Division) in Ontario is frequently the court with jurisdiction to deal with
criminal matters of a minor nature or to act as a court where a preliminary hearing of a more serious
criminal offence would be held.
In a criminal case involving a minor or less serious offence, the Crown brings the case before the court
by way of the summary conviction rules of procedure. In a serious case, it will bring the case by way of
The procedure of the Provincial Court is very informal. The normal procedure at the hearing is to have
the charge which the Crown has placed before the court read to the accused. The accused is then asked
how he or she pleads. If the accused admits to the commission of the offence, a plea of guilty is entered
and the court will then hear evidence from the Crown to confirm the act and the circumstances
surrounding it. A conviction will then be lodges against the accused, and a penalty imposed.
If a pleas of not guilty is entered by the accused, the Crown is then obliged to proceed with its evidence
to show that, in fact, the criminal act was committed by the accused, and that the accused had intended
to commit the crime. Witnesses are normally called by the Crown to identify the accused as the person
who committed the act and to establish this evidence. Counsel for the accused (the defence) then has
the opportunity to cross-examine the witnesses.
On completion of the Crown’s evidence, the defence counsel may ask the judge or magistrate to dismiss
the case if the Crown has failed to prove beyond any reasonable doubt that the accused committed the
crime. If the judge does not accept the defence counsel’s motion, then the defence may proceed to
introduce evidence to refute the Crown’s case.
Once all of the evidence has been presented to the court both parties are entitled to sum up their
respective cases and argue any legal points that may apply to the case. The judge then determines the accused either not guilty or guilty of the crime, and his or her decision, with reasons, is recorded as the
Civil Court Procedure:
Before a civil case may proceed to trial, the parties must exchange a number of documents called
pleadings that set out the issues in dispute and the facts surrounding the conflict.
Civil CASES may begin in a number of ways, depending upon the court and the relief sought. In some
provinces, the usual procedure in a simple dispute is for the plaintiff (the injured party) to issue a writ of
summons against the defendant alleging the particular injury suffered by the plaintiff, and notifying the
defendant that the plaintiff intends to hold the defendant responsible for the injury set out in the claim.
The writ of summons is usally prepeared by the plaintiff’s lawyer and taken to the court’s office where
the writ is issued by the court. It is then served personally on the defendant, usually by the sheriff or
someone from that office. Once the defendant receives the writ, he or she must notify the court’s office
that a defence will follow. This is done by filing a document called an appearance.
The next step in the proceedings is for the plaintiff to provide the defendant (and the court) with details
of the claim and the facts that the plaintiff intends to prove when the case comes to trial. This document
is called a statement of claim.
The defendant, on receipt of the statement of claim, must prepare a statement of defence setting out
the particular defence that the defendant has to the plaintiff’s claim and, if necessary, the facts that he
or she intends to prove at trial to support the defence. The statement of defence is filed with the court
and served upon the plaintiff. If the defendant also has a claim against the plaintiff, the defendant will
file a pleading called a counterclaim, which is essentially a statement of claim. When a counterclaim is
filed, the roles of the parties change.
Close of Pleadings:
Once the pleadings have been closed, either party may set the action down on the list for trial by filing
and serving a notice of trial on the other party. In some instances, where a jury may be appropriate, a
jury notice may also be served. This indicates that the party serving the notice intends to have the case
heard by a judge and jury.
Since the mid-1990s, most provinces have introduced a change in procedure for certain civil trials
whereby the parties are expected to explore the possibilities of resolution of the dispute before trial
with the assistance of a mediator. If the mediator fails to effect the settlement the case then proceeds
to the trial stage. To clarify points in the statement of claim and statement of defence, the parties may also hold
examinations under oath, called examinations for discovery. The transcript of this evidence is often used
later at the trial. In Ontario, a pretrial is held whereby the parties (or their counsel) briefly present their
cases to a judge. The judge then provides the parties with an indication of how the court might decide
the case if a full trial of the issue was held.
At trial the counsel for the plaintiff usually begins the case with an opening statement that briefly sets
out the issues and the facts that the plaintiff intends to prove. Witnesses are called, and evidence is
presented to prove the facts in the claim. All witnesses may be subject to cross-examination by the
defence counsel. On completion the defendant may ask the judge to dismiss the plaintiff’s case if the
evidence fails to establish liability on the defendant’s part. If the judge doesn’t agree the action will
proceed and the defendant must enter evidence by way of witnesses.
Witnesses may be of two kinds:
1. Ordinary witnesses who testify as to what they saw, heard, or did.
2. Expert witnesses who are recognized experts on a particular subject and give opinion evidence
on matters that fall within their area of special knowledge.
If either of the parties believe that the trial judge erred in some manner, an appeal may be lodged with
the appropriate Appeal Court. A notice of appeal must be served within a relatively short time after the
trial judgement is handed down.
While the court costs must be paid initially by the plaintiff (and defendant), the plaintiff usually asks the
court to order the defendant to pay these costs along with the damages or relief requested in the
action. Conversely, the defendant may ask the court to dismiss the plaintiff’s claim and order the
plaintiff to pay the defendant’s cost of defending the action.
Administrative tribunals are often boards or commissions charged with the responsibility of regulating
certain business activities.
Ad hoc tribunals deal with specific disputes between parties and are frequently found in areas such as
Alternative Dispute Resolution (ADR):
In addition to regulatory tribunals, tribunals are sometimes used as alternatives to the courts to deal
with a wide variety of disputes between individuals. The advantages associated with these bodies are the speed at which hearings may be held, the informality and confidentiality of the proceedings, and the
lower cost of obtaining a decision. Given the high cost of resolving disputes in the courts, business
contracts often contain clauses that provide for alternative methods of resolving disputes between the
parties. The usual method is by arbitration, whereby the parties agree that if any dispute arises between
them, they will refer the dispute to an arbitrator and that they will be bound by the arbitrator’s award
or ruling on the dispute.
The parties may also use mediation as a preliminary step to the arbitration process in an effort to
resolve the dispute without a formal arbitration decision. The mediation process usually involves a third
party who is skilled at the process to meet with the parties, usually jointly at first, then individually. The
mediator will then move back and forth between the parties with suggestions and proposals for
settlement in an attempt to resolve the issues in dispute. Where mediation fails to settle the dispute,
the next step in the process would usually be binding arbitration.
Arbitration is conducted much like a court, but the process is less formal. The parties in most cases may
choose their own arbitrator. If a board of arbitration is to be established, the parties each nominate a
member of the board, and the nominees select an impartial chairperson, who is usually knowledgeable
in that area of business. Once an arbitrator is selected or the board of arbitration established, an
informal hearing is held where each of the parties present their side of the dispute and their evidence.
Depending upon the nature of the dispute, the hearing may be conducted in the same manner as a
court, with witnesses called to give evidence, and legal counsel conducting the case for each of the
parties. When all of the evidence has been submitted the arbitrator or board will make a decision that
will be binding on the parties. In the case of a board of arbitration, the decision of the majority is
generally the decision of the board.
*The parties themselves are expected to bear the cost of the arbitration.
The Judicial-Appointment Process:
Judges who sit on the Supreme Court of Canada, the Federal Court, the Tax Court, and Provincial
Supreme or Superior Courts are appointed by the federal government. Provincial and Magistrate Court
judges (including Small Claims Courts in some provinces) are appointed by provincial governments.
The process of appointing a judge is rather complex in the sense that it is essentially a four-step process.
The process includes the Federal Commissioner for Judicial Affairs, the provincial or territorial
Committee, the Minister of Justice, and the Governor-in-council.
The Commissioner is the first step in the process. He or she conducts a preliminary screening of
potential nominees to make certain that they have been members in good standing in their respective
provincial or territorial law associations for a period of no less than ten years. All potential candidates must, as a prerequisite, be qualified lawyers who have either been in the practice of law for at least ten
years, or possess a total of at least ten years as a practitioner and a provincial judge or magistrate.
Following this step, the Commissioner submits the candidate’s name to the provincial or territorial
committee where the candidate resides for further review and assessment. The committee is a
permanent one that consists of five members: a person nominated by the Federal Minister of Justice; a
person nominated by the provincial or territorial Attorney General; a federally appointed judge,
nominated by the Chief Justice of the provincial Supreme Court; a person nominated by the provincial
board of the Canadian Bar Association; and a person nominated by the provincial or territorial law
society. The committee examines the candidates and declared them qualified or unqualified.
The names of the qualified persons will then be reported to the Commissioner for Federal Judicial
Affairs, who will add all the names to the list of qualified persons that the office maintains.
The third step in the process takes place when a vacancy occurs on a court. The Minister of Justice will
usually select a person who has been screened by the committees in advance or in contemplation of an
appointment, but the Minister may exercise his or her discretion by submitting a name for assessment.
The Minister of Justice will put forward the recommended name of the person to the Governor-in-
Council for appointment to the judicial vacancy on the court. The Governor General on the advice of
Cabinet performs the fourth and final step in the process by approving the recommendation and
appointing the person as a judge of the particular court. CHAPTER 3: ADMINISTRATIVE LAW:
A large part of the body of administrative law is directed at the control or regulation of business-related
activity, and business persons and corporations alike must be aware of the many administrative bodies
or agencies that can have a serious impact on their operations. These regulatory bodies usually have
regulations and procedures that must be complied with either before a business may lawfully be
commenced or during its operation; a failure to comply with these rules or regulations may result in
serious penalties or a closure of the business. Overall, there are perhaps very few service providers who
are not in some way and to some degree subject to some licensing or regulatory control by government.
The regulatory control of the professions and other service providers is relatively similar in most
provinces. As noted, a statute is passed by the legislature, which creates an entity to regulate or control
the particular profession or group of individuals. For the professions this usually takes the form of a self-
governing college, society or association; for business persons or trades, the legislation may designate a
branch of a particular ministry of the government to handle the regulation of the individuals.
The statute will generally set out the broad policy guidelines or goals for the governing entity, and
authorize the entity to establish its own procedures to achieve these policy goals.
The Hearing Process:
The courts have clearly stated than any agency or organization that has the power to deny or revoke the
rights of a person to practice a profession, or engage in a lawful trade or business, is acting in a quasi-
judicial manner, and may not revoke or deny these rights until and unless the affected person has been
given the opportunity to present his or her case to the decision-makers.
While the court rules of evidence may not apply in their entirety, the hearing procedure in many cases
will represent that of an informal court: lawyers may represent the parties, evidence may be presented,
witnesses may be heard and cross-examined, and arguments may be presented to the decision makers.
An appeal process may occasionally be permitted under the legislation or regulations, but, more often
than not, no provision will be made for appeal of the decision. However if the decision is flawed or
natural justice is denied, a judicial review may be available to the affected party. If the decision is found
to be unreasonable by the courts, it may be quashed and the organization or agency may be directed to
hold a new hearing in accordance with the court’s directives. In some cases, a member of a professional
organization may feel that the board that oversees the profession has exceeded its authority or rules in
commencing disciplinary proceedings against the professional. In such a case, the professional may
apply to the courts to have the disciplinary proceedings stayed or terminated.
Broad-Policy Administrative Law:
Each province and the federal government have in place labour-relations legislation designed to
regulate the relationship between labour unions, the employees they represent, and employers. The legislation, broadly speaking, provides an administrative structure and process to determine if a union is
entitled to represent the employees of an employer, the process for the negotiation of the terms and
conditions of employment of employees represented by a union, and a procedure for the resolution of
disputes that may arise out of collective-employment agreements.
Provincial securities legislation sets out requirements for the issue of securities to the public; in addition,
persons who engage in securities trading must be registered in order to sell securities to the public as
investment dealers or investment salespersons. The Ontario Securities Commission (OSC) administers
the provincial Securities Act; it protects investors from unfair or fraudulent practices and fosters
confidence in the capital markets.
Control of Supplies and Services:
Control of specific industries or groups of industries in each province is also managed through
Administrative law reaches to the local-government level as well. One very important business
regulation that is delegated to local levels of government is that of land development.
The Appeal Process for Administrative Decisions:
In many cases, the decisions of administrative agencies, boards and commissions are deemed to be final
and binding, and usually no provision is made for an appeal to the courts or other appeal body. In some
cases, however, an appeal is provided, such as when land-development decisions are appealed to the
provincial Municipal Board. When the decision making is internal, in the sense that the regulatory work
is performed in a government ministry, an appeal of the decision may sometimes be provided to the
When no appeal process is provided for by the legislation or the regulations, a decision by a regulatory
body acting in a quasi-judicial manner will normally be final and binding unless the decision or process is
flawed. Should this be the case, the aggrieved party may apply to the courts for a judicial review of the
decision. CHAPTER 4: INTENTIONAL TORTS:
Tort law is used to describe a great many activities that result in damage to others, with the exception of
a breach of trust, a breach of duty that is entirely contractual in nature, or a breach of a merely
The difference between criminal law and tort law is that criminal law refers to public wrong or wrongs
against society. Tort law refers to private wrong or wrongs against the individual.
As a very general rule, contract law applies to business activities where the parties have voluntarily
agreed to their rights and responsibilities and which the courts will enforce through civil action. In the
case of tort law, a party affected by a business activity that causes injury need not necessarily be
associated with the business transaction or activity, and in many cases may be a complete stranger to
the transaction, but nevertheless injured by it.
Intentional Interference with the Person:
Interference with the person in tort law includes both willful and unintentional interference
The principal forms of willful or intentional interference are the torts of assault and battery, and false
Assault and Battery:
Assault and battery are torts that occasionally arise in ordinary business relationships, generally in
instance where employees act improperly in dealing with unruly patrons of food and drink
establishments, or in professions where dealing with people in a physical manner occurs.
Assault: A threat of violence or injury to a person
Battery: The unlawful touching or striking of another person
Assault originally referred to a threat of violence and battery to the application of force to the person.
For the battery to be actionable the force must be applied with the intention of causing harm. Where it
does not cause harm, it must be done without consent, in anger, or accompanied by a threat of injury or
violence in order to constitute a tort. An assault need not be accompanied by the application of force to
In some cases a battery need not be violent. It is sufficient for it to be any situation that involves the
touching of a person without consent in such a way that the recipient of such action is injured. For
example, surgeons have been found liable for battery when they failed to inform their patients of the
risks involved in operations, or when they used experimental techniques without fully explaining the
risks to the patients. The damages that courts may award in assault and battery cases are designed to compensate the
plaintiffs for the injuries suffered. When the attack on the plaintiff is vicious and unprovoked the court
may award punitive or exemplary damages as well. The principle thrust of these awards is to deter the
defendant from similar actions in the future, and to act as a general deterrent for the public at large.
In some cases of assault and battery, a defendant may raise the defences of provocation or self-defence,
but each defence is subject to particular limitations imposed by the courts. Generally, the defense of
provocation will only be taken into consideration in determining the amount of punitive damages that
may be awarded to the plaintiff. As a defence, it would not absolve the defendant from liability. Self-
defence, on the other hand, may be a complete defence if the defendant can satisfy the court that he or
she had a genuine fear of injury at the hands of the plaintiff, and that he or she only struck the plaintiff
as self-protection from a threatened battery. Normally, the courts would also require the defendant to
establish that the amount of force used was reasonable and necessary under the circumstances.
Employer vicarious liability: The liability of an employer for acts of his or her employees in the course of
False imprisonment represents any restraint or confinement of the individual by a person who has no
lawful right to restrict the freedom of another. It most often arises when store security personnel seize
and hold a person suspected of taking goods from a place of business, only to discover later that the
person was innocent.
The law, as a matter of public policy, usually views the restraint of one individual by another with
disfavour, and the defences available to the defendant are meagre. The Criminal Code permits citizens
to seize persons who have committed a criminal offence (such as shoplifting) and hold them without
warrant until a police officer can take the offender into custody, but care must be taken to ensure that
an innocent person is not apprehended.
As a general rule, a person may restrain another when the person apprehended is in the process of
committing a crime, or when a person attempting to seize a criminal mistakenly apprehends the wrong
person. In the latter case, however, the person falsely seizing the innocent person must have reasonable
and probably grounds for believing that the innocent person had committed an offence and was
escaping custody; otherwise, it would be no defence to a claim of false imprisonment.
False imprisonment is also a criminal offence In the form of forcible confinement. Under Criminal Code,
anyone who without lawful authority confines, imprisons, or forcibly seizes another person may be
prosecuted for the offence. If found guilty that person would be liable to imprisonment for a term of up
to ten years.
Intentional Interference with the Reputation of a Person:
The law of tort relating to the interference with a person’s reputation is called defamation. Defamation
may take the form of either libel or slander. Libel takes the form of printed or published slander. Generally, in a defamation action the plaintiff must establish that the defendant’s statements have
seriously injured his or her reputation; otherwise, the court will award only nominal damages. If the
defendant’s statements are true, the plaintiff will not succeed, as the truth of the statements will
constitute a good defence to the plaintiff’s claim.
Qualified privilege and absolute privilege are also recognized by the court as defences to a claim for
defamation. Absolute privilege protects the speaker of the words absolutely, regardless of the word’s
truth or falsity, and even if they are made with malicious intent. This defence is limited however to
those cases where it is in the public’s interest to allow defamatory statements to be made. In some
instances, qualified privilege may apply if the defendant can show that the statements were made in
good faith and without malicious intent, even though the facts that he or she believed to be true at the
time were subsequently proven to be false.
Defences to an allegation of defamatory libel may include the publication for the public benefit of
matters that in themselves are true, and fair comment of fair reporting in good faith of lawful public
Intentional Interference with Land and Chattels:
The two principal classes of tort that related to property law are trespass to land and conversion of
goods. In both of these cases there is an element of intention associated with the act of interference.
Trespass to Land:
The law relating to trespass of land represents the act of entering the land of another without the
express or implied consent of the person in lawful possession. It is also trespass if a person, once given
permission to enter the lands, refuses to leave when requested to do so. Trespass may not amount to
crime since “breaking the close” simpliciter is not a criminal offence.
Conversion and Willful Damage to Goods:
Conversion is the wrongful taking of the goods of another or, where the goods lawfully come into the
possession of the person, the willful refusal to deliver up the goods to the lawful owner. For the tort of
conversion to exist, the lawful owner must be denied possession and enjoyment of the goods, and the
defendant must retain the goods without colour of right. The remedy granted by the courts is usually
monetary damages equal to the value of the goods.
The second form of trespass to goods involves the willful damage to goods while they are in the
possession of the owner. (For example, the deliberate smashing of the windshield of an automobile by
vandals while it is parked in an automobile dealer’s parking lot)
Business Related Torts and Crimes:
Slander of Goods and Injurious Falsehood: Perhaps the most common business-related tort an unscrupulous business person might commit is the
slander of goods. Slander of goods involves making a statement alleging that the goods of a competitor
are in some way defective or shoddy, or are injurious to the health of the consumer. Consumers who
make untrue and unfounded statements of this nature would also commit the tort of slander of goods.
Injurious Falsehood is closely related to slander of goods, but its scope is wider. Not only may the goods
be the subject of the slander, but the disparagement can be aimed at the business enterprise as a
whole, or its owners in particular.
Injurious falsehood: False statements about a firm, its products or business practices intended to
dissuade others from doing business with the firm.
Slander of Title:
Slander of title arises when a person makes an untrue statement about the right of another to the
ownership of goods.
Breach of Confidence:
Improper dealings with a competitor’s employees may also constitute an actionable tort. The remedies
in these cases are usually money damages against the employee for breach of confidence (along with
the right to dismiss the employee for the breach) and an injunction against the other business to
prevent it from using the improperly acquired trade secret.
Agreements in restraint of trade, such as combinations or conspiracies to eliminate competition, to fix
prices, to restrict the output of goods in order to enhance the price of the goods or services to the
public, or to prevent the entry of others into the market are treated as “business crimes” under the
Competition Act and, if proven, are subject to penalty.
Two final torts that fall within the realm of business activity are the tort of deceit (arising from
fraudulent misrepresentation) and the tort of fraudulent conversion of goods. To constitute fraudulent
misrepresentation, the statements made must be of a material nature, and must be made with the
intention of deceiving the other party. In addition, the plaintiff must have relied on the
misrepresentation. The statements themselves must be known to be false or made recklessly, without
caring as to their truth or falsity, and must be relied upon by the other party. If proven, fraudulent
misrepresentation constituted the tort of deceit, and would permit the injured party to rescind the
contract made as a result of misrepresentation (provided that the party does so promptly on discovery
of the fraud). For the tort of deceit, the injured party would also be entitled to damages for any loss
suffered and perhaps to punitive damages as well.
Fraudulent conversion of goods is also a tort, and usually arises when the person has obtained the goods
under false pretenses. It differs from the theft of goods in the sense that the goods are voluntarily
delivered by the owner to the person who obtains them through fraud. Fraudulent conversion of goods
is also a criminal offence. CHAPTER 5:
Negligence: Hurdles to overcome:
1. Duty of care – test of foreseeability. Would a reasonable person in similar circumstances have
foreseen the injury to the plaintiff as a result of his/her actions? If yes, duty of care owed by
defendant to plaintiff.
2. Standard of Care – Two steps:
1. What standard of care is defendant required to meet and
2. Based on facts, did defendant meet requisite standard of care
3. Causation – was defendant’s action the cause of the injury?
But for test – no injury “but for” particular fault
Proximate clause – i.e. no intervening events
4. Remoteness of Damages -
Are injuries suffered to remote?
Is general type of injury reasonably foreseeable?
Generally person takes victim as he/she finds him/her (e.g. thin skull principle)
- contributory negligence (plaintiff’s own carelessness) Contributory Negligence Act
- voluntary assumption of risk
- act of God
- waiver/warning labels
- statute of limitations
- place the injured party in the same position that party would have been in had the tort not
Special damages – can be determined (e.g. wages)
General damages – estimated (e.g. pain and suffering)
punitive/exemplary – to punish defendant CHAPTER 6: SPECIAL TORT LIABILTIES OF BUSINESS PROFESSIONALS:
A professional is a person who possesses special knowledge or exercises special skills not normally
possessed by most individuals.
Fiduciary duty of care: A duty to place a client’s interest above the professional’s own interests.
One of the obligations upon professionals acting in fields which can create tort liability is the obligation
to explain procedures and obtain consent to action from the party who will be affected by the
professional service. It is a moral obligation that rapidly translates into a defence to tort liability and a
cause of action for a plaintiff (if not done). If something less than informed consent is given, the
professional is exposed to full liability for foreseeable harm.
Professionals who provide advice or information must ensure that they are not negligent in this regard,
as negligent misstatements or negligent misrepresentation may constitute a breach of duty of care on
the part of the professional. CHAPTER 7: AN INTRODUCTION TO THE LEGAL RELATIONSHIP:
A contract may be defined as an agreement made between two or more persons that is enforceable at
Contract law differs from the law of torts and many other areas of law: if the parties comply with the
principles laid down for the creation of an enforceable contract, they are free to create specific rights
and duties of their own that the courts will enforce.
The Elements of a Valid Contract:
The creation of a binding contract that the courts will enforce requires the contracting parties to meet a
number of requirements prescribed by the law of contract. These requirements are referred to as the
elements of a valid contract and consist of
1. An intention to create a legal relationship
5. Capacity to contract, and
Contracts must be free from any vitiating elements, such as misrepresentation, mistake or undue
The intention to create a Legal Relationship:
The concept of a contract as a bargain or agreement struck by two parties is based upon the premise
that the end results will be a meeting of the parties’ minds on the terms and conditions that will form
their agreement with each other. Closely related to the intention of the parties to be bound by their
promises is the notion of consensus ad idem or agreement as to the subject or object of the contract.
If the agreement consists of promises made by the parties, then one of the essential elements of an
agreement must be a promise. Not all promises can be taken as binding on the party making them.
Some may be made by persons who have no intention of becoming legally obligated to fulfill them. This
type of promise cannot be taken as the basis for a contract.
The intention to create a legal relationship is a presumption at law, because the creation of the
intention would otherwise be difficult to prove. If the intention is denied, the courts will usually use the
conduct of the party at the time the statements were made as a test, and assess such conduct and
statements from the point of view of the “reasonable person.”
The law nevertheless, recognizes certain kinds of promises or statements as ones that are normally not
binding, unless established as such by the evidence. Promises made between members of a family
would not normally be considered to be an enforceable contract. Advertisements in newspapers, magazines, and other written media are not normally taken as enforceable promises that are binding on
the advertiser. However, while an advertiser is not normally bound by the claims set out in an
advertisement, if a clear intention to be bound by them is expressed, then the courts will treat the
promise as one made with an intention to create a legal relationship. As a general rule, the courts view
an advertisement (or any display of goods) as a mere invitation to do business rather than an intention
to enter into a contract with the public at large.
Offer and Acceptance:
Normally a person seldom makes a promise unless some condition is attached to it, requiring the other
party to do some act or give a promise in exchange. The tentative promise made subject to a condition is
therefore not binding on the offering party (the promisor or offeror) until the proposal is accepted. The
two additional requirements constitute the second and third elements of a valid contract: offer and
Communication of an Offer:
An offer must be communicated by the offeror to the other party before the offer is capable of being
accepted. No person can agree to an offer of which he or she is unaware.
Only the person to whom the offer is made may accept the offer. If an offer is made to the public at
large, this rule naturally does not apply; for the offeror is, by either words or conduct, implying in such
an offer that the identity of the offeree is not important in the contract.
Acceptance of an Offer:
The first general rule for acceptance when a response is necessary is simply the reverse of the rule of
offers. It states that the acceptance of the offer must be communicated to the offeror in the manner
requested or implied by the offeror in the offer.
In the case of an offer that invites acceptance by post, the rule that has been established is that the
acceptance of the offer takes place when the letter of acceptance, properly addressed and the postage
paid, is placed in the postbox or post office.
Electronic Offer and Acceptance:
Silence cannot be considered to be acceptance unless a pre-existing agreement to this effect has been
established between the parties.
Effect and Timing of the Click as Offer and Acceptance:
The Ontario Superior Court of Justice has recognized the click-wrap agreement – the click box of “I
Agree” – as valid acceptance of contractual responsibilities.
Lapse of an Offer: The death of either party will prevent the formation of the contract, because the personal
representative of the decreased normally may not complete the formalities for offer and acceptance on
behalf of the deceased.
An offer will also lapse as a result of a direct or indirect response that does not accept the offer
unconditionally and in accordance with its terms. If the offeree rejects the offer outright, it lapses and
cannot be revived except by the offeror. Similarly, any change in the terms of the offer in a purported
acceptance will cause the original offer to lapse, as the modified acceptance would constitute a
Offers may also lapse by the passage of time, or the occurrence of a specified event.
Revocation of an Offer:
Revocation: the termination of an offer by notice communicated to the offeree before acceptance.
Revocation requires an act on the part of the offeror in order to be effective. The offeror must
communicate the revocation to the offeree before the offer is accepted; otherwise, the notice of
revocation will be ineffective.
If the offeree wishes to make certain that the offeror will not revoke the offer, the method generally
used is called an option. An option is a separate promise that obliges the offeror to keep the offer open
for a specified period of time, either in return for some compensation or because the promise is made in
a formal document under seal.
A second aspect of revocation of an offer is that it need not be communicated in any special way to be
effective. The only requirement is that the notice of revocation be brought to the attention of the
offeree before the offer is accepted.
The question of whether indirect notice of revocation will have the effect of revoking an offer is less
clear. The essential point to note, in cases where notice of revocation is brought to the attention of the
offeree by someone other than the offeror or the offeror’s agent, is the reliability of the source. The
offeror must, of course, prove that the offeree had notice of the revocation before the offer was
accepted. CHAPTER 8: THE REQUIREMENT OF CONSIDERATION:
The bargain theory of contract suggests that a contract is essentially an agreement between parties
wherein each gets something in return for his or her promise. The “something” that the promisor
receives in return for the promisor’s promise is called consideration – an essential element of every
Consideration may take several forms. In every case the consideration must be something done with
respect to the promise offered by the promisor. Unless a promisor gets something in return for his or
her promise, the promise is merely gratuitous.
There are certain exceptions to this rule. It has long been a rule of English law that a gratuitous offer of a
service, if accepted, must be performed with care and skill; otherwise, the promisor will be liable for any
loss suffered as a result of careless performance or negligence.
A second major exception is that a person may be liable on a promissory note, or other negotiable
instrument, to a subsequent endorser, even though no consideration exists between them. Under the
same body of law, a party who endorses a bill of exchange (e.g. a cheque) to enable another to
negotiate it may be held liable on the bill, even though no consideration was given as a result of the
A modern day exception to the rule concerns the promise of a donation to a charitable organization. The
donor‘s promise cannot be held enforceable. However, in cases where the charity can show that it
undertook a specific project on the strength of the donor’s pledge, then the promise may be enforced.
The would only be applicable though, if the donor’s promised donation was such that it represented a
substantial part of the funds necessary for the project.
Seal as Consideration:
A major exception to the requirement for consideration in a contract is a device that was used by the
courts to enforce promises long before modern contract law emerged. This particular device is the use
of a seal on a written contract.
Seal: a formal mode of expressing the intention to be bound by a written promise or agreement. This
expression usually takes the form of signing or affixing a wax or gummed paper wager beside the
signature, or making an engraved impression on the document itself.
The binding effect of a formal contract under seal persists today. The courts will not normally look
behind a contract under seal to determine if consideration exists, because the agreement derives it
validity from its form (i.e., the signature plus the seal)
The tender process usually involves the advertisement of the particular needs of the firm to potential suppliers of the goods or services, either by way of newspapers or by direct mail contact. This step in the
process is known as calling for tenders, and has no binding effect on the firm that makes the call.
*The tendering process usually uses the seal to render an offer irrevocable, and often uses payment of a
money deposit as a special type of consideration.
Adequacy of Consideration:
In general, the courts are not concerned about the adequacy of consideration because they are
reluctant to become involved as arbiters of the price or value that a person receives for a promise. In
some cases, however, the courts will look more closely at the adequacy of consideration. If the promisor
can satisfy the court that the promise was made under unusual circumstances (such as when an error
occurred that rendered the consideration totally inadequate in relation to the promise made),