ADMS 2610 Notes PDF

Chapter 1: The Law and the Legal System General areas of business law: 1. Tort law Injury to others, ex. unsafe operating premises 2. Contract law Day-to-day operations, ex. purchase/sale of goods, labour employment 3. Business organizations Formation and operation, ex. understanding partnerships, c...

Chapter 1: The Law and the Legal System General areas of business law: 1. Tort law Injury to others, ex. unsafe operating premises 2. Contract law Day-to-day operations, ex. purchase/sale of goods, labour employment 3. Business organizations Formation and operation, ex. understanding partnerships, corporations 4. Land law Purchasing or leasing of premises 5. Intellectual and Industrial property 6. Environmental law Nature of Law -​ Reflects the society we live in -​ Determines the rights and freedoms of the individual -​ Has historical influences -​ Covers law that affects interpersonal/commercial relationships, and common law Salmond: Body of principles recognized and applied by the state in the administration of justice Holmes A statement of circumstances in which the public force will be brought to bear through the Courts Blackstone A rule of civil conduct, prescribed by the supreme power in a state, commanding what is right, and prohibiting what is wrong Rights vs Privileges Rights are things we can do with force of the state behind us, a privilege is an action that may be taken under specific circumstances Social control Legislators sometimes establish laws that are not in response to demands of citizens What represents social engineering: -​ Restricts individual rights and freedoms -​ Transfers rights/powers to governing body Settlement, Rules, and Protection Law can be subdivided into 3 functions 1.​ Settling disputes 2.​ Establishing rules of conduct 3.​ Producing protection for individuals The early development of law: within the family Established to maintain relationships in families/tribes -​ Word of mouth from generation to generation -​ Disruptive behaviour controlled by family elders -​ Decision makes acquired power to impose decisions on disputants Law, as an instrument of social control, took form. The early development of law: within the city-state Establishment of city and city-state led to: -​ Formal bodies with authority to decide how individuals should conduct themselves -​ Formation of governments to deal with disputes -​ Ex. roman empire, middle east Customary Law Rise of city-state created the need for a system of law enforcement -​ Disputes increase as populations density increased -​ Commutes established tribunals to hear disputes and force restitution -​ Laws slowly established in form of consistent decisions Pre-Norman England Early courts and law imposed by invaders -​ Roman law was uniform in nature/application -​ German influence decentralized government under a king -​ Divided land into shires and counties Crown: the reigning monarch, individually or collectively representing the state -​ Successive king/queens pronounced law Norman England and the Common Law Norman conquest in 1066 led to: -​ Centralized system of administration -​ Establishment of central judicial system -​ Records improved, eventually becoming useful statement of the common law The Common law Law as found in the recorded judgment of the courts and known as “case law” Stare decisis: to stand by a previous decision -​ Creates certainty and predictability -​ More flexible than a civil code -​ Can adapt to social changes, ex. Same sex marriage Canon law Law developed by church courts to deal with matters that fell within their jurisdiction -​ Original jurisdiction over religion, family, marriage -​ Initially administered by ecclesiastical courts -​ A lot of “church law” became part of the common law Law merchant Customs/rules established by merchants to resolve disputes that arose between them Equity Rules originally based on decisions of the crown rather than on the law, and intended to be fair Statute law Laws established by governing body of particular jurisdictions -​ statutum=it is decided -​ The crown in canada is a source of constitutional authority -​ advantage=relative ease by which the law may be changed Creation of Statute law 1.​ Bill: proposed law presented to a legislative body 2.​ Motion: decision to read a bill the first time 3.​ Royal assent: approval of the sovereign, needed in order for the bill to become a law 4.​ Proclaimed: when a law becomes effective 5.​ Revised statutes: updated/amended to reflect changes in society Aboriginal and Indigenous law 2 of the fastest growing legal fields in Canada 1.​ Aboriginal law: body of canadian law, made by courts/legislatures, deals with indigenous people/relationships with the Crown 2.​ Indigenous law: collection of legal traditions, costumes, and practices Quebec’s civil code Unlike the rest of Canada, Quebec has codified much of the Common law Civil code: body of written law that sets out private rights of citizens -​ Most recent civil code of Quebec came into force in 1994 Codification of Common Law Codification of the common law into statues -​ Took place during late 1800’s -​ Advantage over common law is certainty -​ Still requires judge interpretation Administrative law Body of rules governing the application of statutes to activities regulated by administrative tribunals or boards Administrative tribunals Agencies created by legislation to regulate activities or do specific things Constitution Basis upon which state is organized and the powers of its government defined Ex. Bill of Rights in the U.S The Canadian Constitution Act (1982) Set of formal written documents -​ Sets out fundamental rights and freedoms of Canadians -​ Defines law-making powers of the legislative bodies of the state 2 main parts 1.​ Canadian charter Rights and Freedoms 2.​ Amending formula + additional changes in powers of government + British North America Act (1867) Division of Powers: Section 91: federal powers -​ Regulation of trade and commerce -​ Criminal law Section 92: provincial powers  -​ Property and civil rights -​ Licensing of certain businesses and activities Right to Due Process Right to be informed, on arrest or detention, of the reasons for the arrest -​ Right to retain and instruct a lawyer -​ Reasonable bail Enforcement of Rights The Charter states that persons who believe their rights or freedoms have been violated can… -​ Apply to a court law for appropriate remedy Private matters are dealt with provincial human rights legislation Classification of Laws Statute law and the Common law classified into 2 categories 1.​ Substantive law: all laws that set out the rights/duties of individuals 2.​ Procedural law: law/procedures that a plaintiff must follow to enforce a substantive law right Substantive law subdivided.. Public law and private law Chapter 2: The Judicial System and Alternative Dispute Resolution Courts play important roles in society: -​ Decide disputes -​ Chief interpreters of constitution -​ Guardians of rights and freedoms -​ Interpret contracts -​ Etc Development of Law Courts Long period of development: -​ 1663 Customs of Paris -​ 1971 Canada Act Early Law Reform Many reforms passed between 1873 and 1925 -​ Beginning of development of the Supreme Court -​ Streamlining judicial process 1982 Charter of Rights and Freedoms -​ Courts role became chief interpreter of rights and freedoms Structure of judicial System Jurisdiction: right or authority of a court to hear a and decide a dispute Authority to deal with cases of a particular type: -​ Monetary - up to a set amount -​ Geographic - within a particular province Two classification for courts of law: 1.​ Original jurisdiction - case heard for the first time 2.​ Courts of appeal - hear appeals from trial courts -​ Look for errors of law -​ Does not hear evidence -​ Superior or higher courts Federal Courts Deals with federal matters under federal government jurisdiction -​ Disputes between provincial and federal governments -​ Actions against federal governments -​ Admiralty, patents, trademark, copyright, taxation Provincial Courts Each province has authority to establish own system -​ Variation in names and powers exist but overall similar in function Criminal Courts Magistrates or Provincial Court: -​ Court of original jurisdiction -​ Initially deals with all criminal cases Provincial Supreme Court: -​ Hears more serious criminal matters -​ Assizes: sittings of court held in different places Youth courts: -​ Hears cases of youth under 18yrs -​ Youth Criminal Justice Act Family Courts: -​ Deals with domestic problems Civil Courts Provinces have several civil courts -​ Deals with disputes between corporations or individuals OR between individuals and government Small claims court: -​ Hear cases where amount of money involved is smaller (25k-50k) -​ Court costs are low Surrogate or Probate court: -​ Deals with administration of wills and estates Provincial supreme court: -​ Hear civil disputes outside or beyond jurisdiction of lower courts -​ Unlimited jurisdiction in monetary matters -​ Designation of court varies by province↴ Jurisdiction Designation of Court Alberta Court of Queen’s Bench of Alberta British Columbia Supreme Court of British Columbia Manitoba Court of Queen’s Bench of Manitoba New Brunswick Court of Queen’s Bench of New Brunswick Newfoundland & Labrador Supreme Court of Newfoundland & Labrador Northwest Territories Supreme Court of the Northwest Territories Nova Scotia Supreme Court of Nova Scotia Nunavut Nunavut Court of Justice Ontario Superior Court of Justice Prince Edward Island Supreme Court of Prince Edward Island  Quebec Superior Court of Quebec Saskatchewan Court of Queen’s Bench for Saskatchewan Yukon Territory Supreme Court of Yukon Civil courts of Appeal Provincial court of appeal: -​ Hears appeals in each province from lower courts -​ Varies by province Supreme Court of Canada Final and Highest Appeal Court in Canada -​ Hears all appeals from all courts, including Federal court -​ Right to appeal is restricted, leave (or permission) by the court must be obtained Civil Appeals Jurisdiction system in action Principle of open courts is the hallmark of Canadian judicial system -​ Promotes access to court hearings/services -​ COVID-19 pandemic led to new processes to maintain access to justice - ex. Online filings of documents/remote hearings Criminal Court Procedure Enforcement of criminal law -​ Usually same court that deals with civil matters -​ Minor or lesser offences dealt with by way of summary conviction rules -​ Serious matters by way of indictment Procedure: -​ Offence is read to the accused by the Crown -​ Accused makes a plea…guilty or not guilty -​ Actus reus=accused committed a criminal act -​ Mens rea=accused intended to commit the criminal act  -​ Record judgement=decision of the court Civil Court Procedure Pleadings=written statements prepared by parties that set out facts and claim of legal action -​ plaintiff=party bringing an action -​ defendant=party defending an action Includes various documents: -​ Statement of Claim or Defence -​ Writ of Summons -​ An Appearance Claim = injured party issues a writ of summons against defendant -​ Alleging particular injury suffered Defence: -​ Defendant prepares statement of defence with facts to support defence Close of Pleadings: -​ Either party files and serves a notice of trail on the other party Discovery: -​ To clarify points in statement of claim -​ Parties may hold examinations for discovery Trial (procedure): -​ Opening statement sets out issues and facts -​ Plaintiff presents evidence and calls witnesses -​ Cross examinations occur -​ Judge renders a decision with reasons Witnesses 2 kinds: 1.​ Ordinary witness: testify as to what they saw/hears/did 2.​ Expert witness: recognized experts on a subject/give opinion -​ Ex. medical experts/accountants Hearsay evidence Courts insist that “best evidence” be presented -​ Hearsay evidence not allowed = evidence from own knowledge -​ Obliged to bring person with direct knowledge to testify about Appeal Either party can appeal to a higher court if one feels the judge erred in application Court Costs Costs litigants incur: -​ Fees imposed by government  -​ Fees of lawyers or paralegals Contingency Fees Lawyers fees payable on the condition of winning the case -​ Cons: encourages frivolous litigation and compromises a lawyers sense of justice in the search for profit -​ Pros: allows for greater access to justice *ONLY DONE IN THE U.S* Class Actions Action where a single person represents the interests of a group -​ Procedures require identification and legal recognition -​ Representative plaintiff must fairly represent everyone with enough time and money The Law Reports Common law consists of recorded judgement and decisions of the courts -​ Found in different series of reports - Ex. Dominion Law Reports, Canada Criminal Cases Case Citations Used by legal profession to identify cases as persuasive argument before the courts -​ Set system of citation must be used: - names of parties - year in which case was decided - volume and name of the report - page in the report Ex. Wilson v. Taylor (1980), 31 O.R. (2d) 9 Administrative Tribunals Boards or commissions charged with regulating certain business activities -​ Established under specific legislation -​ Powers set out in statues -​ Ex. Canadian Radio-television and Telecommunications Ad hoc tribunals = tribunal established to deal with a specific dispute between parties Alternative Dispute Resolution (ADR) Alternatives to the courts -​ Advantages: lower cost, speed Mediation = preliminary step to resolve dispute without formal arbitration decision -​ If fails, next step is binding arbitration Arbitration = conducted like a court but less formal -​ Advantages: commonly used to resolve contract disputes, prompt decision Commercial arbitration = businesses often include a clause in complex contracts that specify arbitration for disputes -​ Ex. London Court of International Arbitration Labour Arbitration = provinces require employers and unions to use arbitration to resolve disputes over collective agreements Indigenous Justice systems = Quasi-independent indigenous justice system tries to incorporate traditional values and customs The Legal Profession Attorney = a lawyer Solicitor = lawyer who prepares documents of non-litigious legal work Barrister = a lawyer who acts for clients in litigation/criminal court proceedings Usual role of legal profession: -​ Advise client of legal implications of a particular course of action -​ Protect of action Business Law includes… -​ Formation and financing of new businesses -​ Intellectual and industrial property, real property -​ Labour relations -​ Taxation and security for debt, etc. Chapter 3: Business Regulations Administrative law encompasses more than just laws… -​ Includes all legislative acts of all levels of governments -​ Rules, decisions, and other directives of public officials, agencies, boards, and commissions Administrative tribunals = agencies created by legislation to regulate activities or do specific things Government Regulation of Business Administrative law regulates business-related activity -​ Businesses must be aware of administrative bodies -​ Failure to comply can lead to closing of business or penalties Most professions controlled by a self-governing body created by statute -​ Ex. law, medicine, accounting, engineering Regulatory control of Professions/ Skilled service providers Entity created to regulate or control a group of individuals -​ For professions - takes form of self-governing college, society -​ For business persons/trades - legislation designates a brand of ministry to handle regulation Statue will set out policy guidelines and goals for governing entity:  -​ Determine skill requirements -​ education/training -​ registration / licencing procedure The Hearing process Authority: -​ Bodies have power to deny or revoke the rights of a person to practice a profession or engage in a trade -​ May be empowered to levy sanctions and or penalties Rules/process of natural justice must be adhered to: -​ Society or agency gives notice of charges against member -​ Member can prepare/present a case -​ Decision can be appealed and overturned if unreasonable Broad-Policy Administrative Law Provincial legislatures and federal government have passed broad-policy administrative laws -​ COVID-19 pandemic - all 3 levels of gov. introduced new laws - ex. Lockdowns, mask mandates, etc Employment Labour-relations legislation: -​ Regulates relationship between labour unions, employers, etc -​ Provides structure for union certification Securities Regulation Provincial securities legislation: -​ Requirements for issuance of securities -​ Protects investors from unfair practices -​ Ex. Ontario Securities Commision (OSC) Control of Supplies and Services Control of specific industries (also managed through administrative law): -​ Energy boards, gas boards, agricultural boards - ex. Milk and egg marketing boards Federal boards and commissions regulate: -​ Telecommunications, airlines, radio, etc Municipal Regulation Delegated by provincial governments to municipalities when business activity is local -​ Ex. taxi business, street vendors, restaurants, etc -​ Land development The Appeal process for Administrative decisions Administrative boards, commissions/agencies are quasi-judicial -​ Involves decision-making that affects the rights of business persons -​ Decisions must be fair and just manner Judicial review = decision of an administrative tribunal is examined to determine if the decision-making process is unfair or flawed Checklist for Natural Justice 1.​ Prejudicial rules cannot be made retroactive 2.​ Notice of hearing to be given to all parties 3.​ Time provided to prepare for hearing 4.​ Permission to have counsel/representation 5.​ Fair hearing of evidence 6.​ Impartial judge or arbitrator 7.​ Timely decision with reasons Chapter 7: An Introduction to Contracts Contract An agreement between 2+ people that is enforceable at law Freedom of Contract: -​ Ability of parties to create their own “law” they can follow -​ Create rights/duties that courts will enforce Elements of a Valid Contract 1.​ An intention to create a legal relationship 2.​ Offer 3.​ Acceptance 4.​ Consideration 5.​ Capacity to contract 6.​ Legality Contracts must be free of vitiating elements: -​ Mistake -​ Misrepresentation -​ Undue influence -​ Duress The intention to Create a Legal Relationship Premise of Contract -​ End result is meeting of the parties minds -​ Essential element is a promise -​ Intention is a presumption at law Presumptions Presumptions in contract law -​ Strangers intend to be bound by their promises -​ Family members/friends do not intend to be bound in contracts -​ Both are presumptions that can be rebutted Invitation to do business -​ Advertisements are not offers -​ Invite offers that seller may accept or reject Carlill v. Carbolic Smoke Ball Co. Key Issue -​ Enforceability of unilateral contracts in advertisements Facts -​ Company promised £100 to anyone contracting influenza after using their product as directed -​ Advertised with a deposit of £1,000 to show intent -​ Mrs. Carlil used the product, contracted influenza, and claimed the £100 Ruling -​ Advertisement was a binding unilateral offer -​ Mrs. Carlil’s use of the product constituted acceptance -​ The company’s depository demonstrated intent to create legal relations Significance -​ Established principles for unilateral contracts and enforceable promises in advertisements *This case showed that ads can be legal promises if they’re clear and specific* Acceptance of an Offer A statement or act given in response to and in accordance with an offer RULE: -​ Acceptance of the offer must be communicated to the offeror in the manner requested or implied by the offeror in the offer Nature of Acceptance -​ Must be clear and unconditional -​ Counteroffer is a new offer and a rejection of original offer Legislation (common law) protects consumers: -​ Public not obliged to pay for unsolicited goods -​ Not liable for goods lost or damaged while in their possession Unilateral Agreements Offers that require offerees to complete their part of the contract as a mode of acceptance -​ An offer made to world at large -​ Completing or performing the act is acceptance Location of the Transaction -​ Place of offer/acceptance determines location of contract and jurisdiction that governs it -​ Data messages are deemed dispatched from the originators place of business Effect and Timing of the Click Electronic business contracts must include valid offer and acceptance -​ Radio button and click box Click-wrap agreement: -​ Internet click box of “I Agree” which constitutes valid acceptance of enumerated contractual responsibilities Lapse of an Offer Termination of an unaccepted offer by the passage of time Revocation of an Offer Termination of an offer by the notice communicated to the offeree before acceptance Chapter 8: The Requirement of Consideration Consideration Something that has value in the eyes of the law, and which the promiser receives in return for a promise Forms of Consideration: -​ Money -​ Services -​ Promise not to do something Gratuitous promise: -​ Promise not accompanied by consideration (not enforceable under law) Adequacy of Consideration Courts not concerned with whether promiser receiver proper compensation for promise -​ Price or value is up to the parties, not the courts Seal as Consideration Formal mode of expressing the intention to be bound by a written promise or agreement -​ Involves affixing a wax paper wafer beside signature or making engraved impression on document Past Consideration Consideration must be given before contract entered into and not after -​ Cannot be something the person received before promise is made Legality of Consideration Consideration must be legal -​ Promises cannot be illegal or a violation of public policy -​ Cannot violate Statutes Tenders Tender differs from the ordinary offer: -​ Involves advertisement or particular needs, i.e. an invitation to submit offers -​ No binding effect: firm asking for tender can reject or accept any of the offers -​ Uses seal to render offer irrevocable; payment as money as consideration Quantum Meruit “As much as he has earned” -​ A quasi-contractual remedy used when someone provides a service or materials without agreeing on a price beforehand. -​ The court decides a fair payment based on what similar services or materials cost in the area. Debtor-Creditor Relationship When debtor and creditor agree amount payable on due date should be less than originally stated -​ Creditors agreeing to accept less than what is owed is a gratuitous promise -​ New promise requires new consideration Courts have attempted to lesson impact of rule: 1.​ Sign under seal 2.​ Acceptance of something other than money 3.​ Pay before the due date 4.​ Third party makes the payment Equitable or Promissory Estoppel Estoppel: rule whereby a person may not evade a promise or deny the truth of a statement of fact made by him/her when another person has relied and acted upon the promise statement **aka.. means you can’t go back on a promise or deny something you said if someone else relied on it and acted because of it** Chapter 9: Legal Capacity to Contract the Requirement of Legality Capacity The ability to enter into a contract Necessary or Beneficial Contract To determine what is necessary, courts will consider… -​ Social position of minor -​ If minor has adequate supply of such goods Minor is liable on such contracts -​ Necessaries: food, clothing, shelter, certain types of transportation Beneficial contract -​ Employment contracts which are beneficial to the minor Effect of Repudiation Rule relating to “not fully performed” contracts for non-necessary goods -​ Minor may reject/refuse contract at any time If rejected/refused: -​ Minor is entitled to return of any deposit paid -​ Minor must return goods Fraudulent Misrepresentation as to Age Minors cannot use rules of protection to perpetrate contract fraud  -​ Adult entering into contract with minor who misrepresented their age cannot hold minor to the contract -​ Merchant may be entitled to recover goods on basis of minors fraud Repudiation Refusal to perform an agreement or promise Ratification Adoption of a contract entered into as a minor but actively continued once the minor reaches the age of majority Temporary or Permanent Mental Impairment Persons committed to mental health institutions cannot incur liability -​ Person suffering from dementia distinguished from person with permanent mental illness Corporations Types of Corporations: 1.​ Regular corporations -​ Same powers as a natural person, limitations through internal bylaws 2.​ “Special-Act” corporations -​ Powers controlled by special act, limitations are public knowledge Ultra vires: act that is beyond the legal authority or power of a legislature or corporate body Other entities First nation bands -​ A bands capacity is an inherent aspect of sovereignty -​ Not recognized as legal entities or persons under Indian act Labour unions -​ Ability to enter into contracts allowed under labour legislation Bankrupt persons -​ Declared bankrupts have limited capacity to contract -​ Until receipt of discharge bankrupts can only enter into contracts for necessaries Requirement of Legality Contracts that offend public good are not enforceable -​ Contracts whose purpose is illegal, may be illegal, and are unenforceable Generally, illegal contracts include: -​ Agreement to commit a crime or any other act prohibited by the Criminal Code -​ Illegal contracts are unenforceable Competition Act Renders illegal any contract that represents restraint of competition  -​ Price fixing -​ Reducing # of competitors -​ Allocating markets Administrative Acts Some statutes render agreements made in violation of the Act void and unenforceable -​ Workers compensation legislation -​ Land-uses planning legislation Void contracts carry no criminal penalties (Un)Licensed Persons Contract with unlicensed tradesperson or professional is illegal -​ Purpose is protection of the public Legality at Common Law: Public Policy Public policy: unwillingness of courts to enforce rights contrary to general interests of the public. Ex… -​ Contract for the commission of a tort -​ High interest rates Contracts in Restraint of Trade: Agreements that limit someone’s ability to do business: 3 categories 1.​ Agreements contrary to the Competition Act 2.​ Non-competition agreements with the purchase and sale of a business 3.​ Non-competition agreements in employment contracts Sale of a Business Restrictive covenant: contractual clause limiting future behaviour Ex… -​ vendor promises purchaser he/she will not establish new business in vicinity, nor engage in direct competition -​ Purchaser must convince courts that restriction is reasonable and does not affect public interest Agreements between Employees and Employers Non-compete employment clause: -​ Employment requires employee not to compete with employer upon termination -​ Attempt to protect business practices/secrets -​ Confidentiality agreements Chapter 10: The Requirements of Form and Writing Formal and Simple Contracts 2 general classes of contracts 1.​ Formal (derives its validity from its form) - not common 2.​ Informal (simple) - most common -​ Implied, oral, written Powers of Attorney: -​ A legal document where a person is given the authority to act on their behalf for specific legal or contract-related tasks. Statute of Frauds Statute of frauds imposed requirement of writing for certain informal contracts -​ Still exists in some provinces Assumed Liability: The Guarantee Guarantee: a promise in writing to answer or the debt of another if the debtor should default in payment 3 principles in a guarantee: -​ Principal debtor -​ Creditor -​ Guarantor Assumed Liability: Tort Any agreement whereby a third party promises to answer for the tort of another -​ Must be in writing -​ Signed by the party to be charged Contracts concerning interests in Land Land contracts - contracts concerning sale in land -​ Vague concept -​ Includes sale/lease of land Requirements for a Written Memorandum for Land To comply with Statute of Frauds: -​ Need not be in a formal document -​ Must include 3 contract P’s: - parties to agreement be identified by name - property described in delta Price Parol Evidence Rule Rule that prevents a party from introducing evidence that would add to or contradict terms of a contract -​ Limits the kind of evidence that may be used to prove terms of a contract Condition Precedent A condition that must be satisfied before a contract may come into effect Doctrine of Implied Term Implied term: A term the court adds to a contract because it’s standard or was clearly meant to be included but wasn’t written down -​ It’s an exception to the rule that only written terms count. -​ The court adds it only if it’s clear the parties intended to include it, and it doesn’t go against what’s written Subsequent agreement Agreement made after a written agreement that alters or cancels the written agreement