BLAW Midterm - Summary Business Law in Canada (PDF)

lOMoARcPSD|48348034 BLAW Midterm - Summary Business Law in Canada Business Law (British Columbia Institute of Technology) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by ewfbqerw...

lOMoARcPSD|48348034 BLAW Midterm - Summary Business Law in Canada Business Law (British Columbia Institute of Technology) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 BLAW 3100 BLAW CHAPTER 2- 6 MIDTERM REVIEW Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 CHAPTER 2 – INTRODUCTION TO THE LEGAL SYSTEM What is Law?  Law = enforced rules created by the government or court o Disagreements o Crime committed? o Breech of Contracts? Categories of By-Laws: 1. Substantive law – rights and limits of an individual in society 2. Procedural law – Asses the after math of substantive law governing arrest, investigation, pre-trial, & court process 3. Public law- includes Constitutional law and determines how the country is governed and regulate (ex. Charter of Rights and Freedoms) 4. Private law – Regulates personal, social and business relationships Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Origins of Law  Civil Law Legal System: o Used in Europe o Napoleonic Code o List of rules stated as broad principles of law that judges apply to the cases that come before them o People wanting to know their legal rights or obligations refer to Civil Code o Prior decisions do not constitute binding precedents in a civil law jurisdiction  Quebec adopted French Civil Code o Noncriminal legal system o Resolves: private disputes in their province L = CL + E + Stat Law = Common Law + Equity + Statues  Common Law Legal System: o Emerges from England  Feudal system centralized power in hands of king  Royal judges became fairer to attract more litigants and broadened the authority of the state o Based on judges applying the customs and traditions of the people and then following each other’s decision o Doctrine of following precedent – judges required to look at similar cases for the principles to be added o Stare Decisis: - system of justice where judges follow each other’s decisions  Judge decision is binding on all judges in lower courts  Allows parties to predict outcome of litigation and thus avoids court  Inflexible and does not acknowledge the changing social society  Plays a role in the English common law legal system = Civil code in French system o Distinguishing the Facts – process judges use to avoid applying precedent decisions by finding the differences in the two cases if they feel it will create injustice cases.  Statues/ Legislations o Parliamentary enactments  Takes precedence over judge-made law  Legislation overrides common law  Courts have authority to affect a statue once it is passed by the federal parliament Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Sources of law  Common law: o 3 historical English courts – theory law: 1. Court of Common Pleas 2. Court of King’s Bench 3. Exchequer Court o Can’t be based just on customs and traditions; borrow legal principles from others  Roman Civil law: - property and possessions  Canon or Church law – relations to families and estates  Law merchant – negotiable instruments (cheques and promissory notes) o Law of Equity (Court of Chancery):  Flexibility  Asking for the rules of chancery to be applied to their case  Principle in law: trust – one property holds property for another  Statues: Legislative, Judicial and Administrative 1. Legislative branch- Government: Federal parliament and legislatures 2. Judicial branch- Government: courts and officers of courts 3. Executive branch- Prime minister, cabinet, deputy… Constitution of Canada  Confederation – process that united British in North America (1867) o Canada except Quebec joined the confederation  Constitution Act, 1867 – dominion of Canada, establishes its structures  Constitution Act, 1982 – Including Charter of Rights and Freedoms  3 elements of Canada’s Constitution: (S.C.C) o Statues o Case law o Conventions: unwritten rules stating how the government should operate and includes rule of law Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Constitution and Division of Powers  Part of Constitution Act 1867  When government claims to control a particular activity o courts act as a referee  POGG= Peace, Order and good Government Conflicting Powers  Ultra vires = when a government (federal or provincial) acts outside its authority under the Constitution o Courts attempt at controlling moral conduct, matter to be dealt with under criminal jurisdiction  Paramountcy = federal and provincial conflict and are valid; federal takes precedence  Municipalities are creations of the province. Their power grows from the province, not directly from the constitution  Canadian Constitution can now be amended by Canadians without needing the cooperation of the British Government  Supreme court has final word on interpretation of the Constitution Legislative Power  Canada’s Constitution requires legislation to proceed through: 1. Introduction 2. Debate 3. Modifications 4. Approval  Gains status of law after royal assent  Federal and provincial statues are compiled and published  Judges interpret and apply statues Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Protection of Rights and Freedoms  Two types of legislation were made to entrust the protection of personal rights and freedoms: o Dealing with protecting human rights against abuses by the government o Protecting individuals against discrimination and intolerance by society at large Fundamental Freedoms  Freedom of conscience and religion  Freedom of thought, belief and opinion  Freedom of expression (press)  Freedom of peace assembly and association Democratic Rights  Right to vote and be elected  Reasonable limitations = restrictions to those underage or mental  Section 4 ensures there will be an election at least every five years Mobility Rights  Section 6 of Charter = right to travel and live anywhere in Canada (enter and leave) o Provincial licensing and educational requirements may create expectations Legal Rights  Section 7: right to life, liberty and security of person  Protects individuals from unreasonable interference from the government  Procedural fairness = rules of natural justice that a hearing must follow  Section 8 & 9: prohibits such activities as unreasonable search and seizure and arbitrary imprisonment Equality Rights  Section 15: prohibits discrimination in the application of the law and a general prohibition against discrimination  Federal and Provincial laws must be applied equally to all  Equality provisions are important for business people o Government-funded projects Language Rights  French and English have equal status  All federal government activities must be available in both official languages  Minority-language rights  Language Rights and minority-language educational rights cannot be overridden by section 33 of the Charter Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Human Rights Legislation  Canadian Bill of rights – o provincial and federal governments were free to interfere with civil rights through legislation o 1960 – attempted to limit authority of federal government to violate human rights o Not entrenched/ firmly established in Constitution o Effectiveness is limited  Charter of Rights and Freedoms – guarantee of basic rights and freedoms in 1982 o Eliminates power to interfere with human rights except Constitutional amendment o Rights protect by judges rather than governments o Limitations on Charter rights:  Section 1: allows interference with rights and freedoms  Section 33: legislatures can pass acts that infringe on rights “notwithstanding” the Charter, but legislation must be reviewed every 5 years (sunset clause)  Section 31(1)  Canadian Human Rights Act applies to abuses in sectors regulated by federal legislation o Ensure individuals have access to employment without barriers o Access to facilities, services, and accommodations also addressed o Prohibits discrimination against gender, religion, ethnic origin, race, age, and disabilities  Tribunal hearings o After complaint and investigation o Can impose significant sanctions and remedies Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 CHAPTER 3 – RESOLUTION OF DISPUTES: COURTS AND ALTERNATIVES TO LITIGATION Alternatives to Court Action  Alternative dispute resolution – ADR = N.A.M o Negotiation o Arbitration  Third party assists  make binding decision in the matter under dispute o Mediation  Neutral third party assists  Coming to a resolution on their own  Advantages of ADR VS. LITIGATION o Low cost o Private o Flexible o Good will o Less delays and faster resolution o Diminishes risk of other judgement  Disadvantages of ADR VS. LITIGATION o Judicial fairness and impartiality are not ensured o Courts have more power to extract information (parties can hide certain information) o Decisions do not follow precedent o Resolutions may not be enforceable o No public record of dispute or decision  Negotiation o 1st recourse for people with disagreements ( between the parties only) o can happen anywhere o non-binding; NO ENFORCEMENT o Requires co-operation and compromise o May enhance relationship o Concessions and admissions made without prejudice will not hurt future litigation  Mediation (family disputes) o Involves a third party who helps parties come to an agreement o Mediator don’t not make decisions but makes discussions easier  Finds common ground  Encourages compromise  Should be skilled and trained in handling neutrality o Non-binding; CAN BE ENFORCED o DISADVANTAGES:  Not the process to use where blame or liability for injury must be determined  Parties must be willing to disclose info.  Power is imbalanced Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034  Arbitration o Parties agree on independent third party to make a binding decision o Often for resolving disputes in labor relations o Arbitrator is chosen from a pool of trained and certified professionals  Avoids bias decisions and keep confidentiality  MAKES THE DECISION BINDING!!! (LIKE LITIGATION but still private) o DISADVANTAGES:  Parties waive their right to go to court but process may be reviewed in court  More formal, costly, and time consuming than other ADR’s  Little certainty and predictability; from not referring to precedent cases Online Disputes Resolutions (ODR)  Great for e-commerce involving small amounts of money  common Mediation and Arbitration The Courts  Procedures vary by province  Trials are open to the public, justice must be seen to be done  All litigants have equal access to the courts  Civil matters: o two private persons use the court as a referee to adjudicate a dispute o decide the matter on the balance of probabilities (judge must be convinced beyond any reasonable doubts if the guilt of the accused)  Criminal proceedings – (can’t be any doubt) o The government pursues the matter and prosecutes the accused o The judge (or jury) must be convinced beyond a reasonable doubt of the guilt of the accused  May face both criminal trial and civil action over same conduct  Regulatory offences: o Federal: environmental, fishing and employment offences o Provincial: motor vehicles, securities o Subjects people to fines and imprisonment Trial Courts of the Provinces  Provincial Court: o Lowest level in the Canadian court hierarchy o Have criminal jurisdiction over the less serious criminal matters o Small claims courts and family court are separated bodies but a division of provincial court system ($10,00 to $50,000)  Superior court of a province (highest trial court): o Unlimited monetary jurisdiction in civil matters and deals with serious criminal issues o Deals w/ administration of wills and estates o Bankruptcy courts operate within the superior court system Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Provincial Courts of Appeal  Appellate courts hear appeals from the lower courts of the province (Provincial and Superior Courts)  An appeal court will consider a case only when questions of law are in dispute, not questions of fact  Not a new trial usually  Appeal court judges o Read the transcript of the trial as well as the trial judge’s decision o Deal with the specific objections to the trial judge’s decision submitted by the appellant’s lawyers Courts at the Federal Level  Federal Court and the Federal Court of Appeal serve a function similar to that of the provincial superior courts  Tax Court of Canada were established to hear disputes about federal tax matters  Supreme Court of Canada: o Highest court in the country o Strictly appellate function o Nine judges appointed by the Government of Canada o Decisions set binding precedent $$$ COST for Court System:  CTR – Online, up to $5,000  Provincial Court, Small Claims Division - $5,001 to $35,000 in B.C  B.C. Supreme Court- highest trial court  B.C. Court of Appeal – highest court in B.C. Process of Civil Litigation  Before a decision is made to sue, all avenues for settling should be tried (ADR)  Civil litigation = process of one party’s suing another in a private action, conducted in a trial court  Often the court requires the disputing parties to have tried these dispute resolution mechanisms before a trial procedure will be instigated Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Limitations Periods  Court action must be brought within a relatively short period of time from the even giving rise to the complaint  The plaintiff must commence an action by filing the appropriate pleadings with the appropriate court  Varies depending on the jurisdiction and the nature of the complaint involved Jurisdiction  Which province or territory? o Where defendant resides or incident occurred  Location of parties is not clear over internet o Must be a connection or degree of interactivity before a local court will take jurisdiction  To avoid battles over jurisdiction, the parties should specify what jurisdiction is to apply in their contract  Must Choose what court to use o Small claims are simpler but awards are restricted  Land = decisions will take place where the land is Pre-Trial Procedures  Plaintiff = if you start it  Defendant = person you are suing  Pleadings o To start a lawsuit = Statement of Civil Claim (plaintiff) o Response/Answers to lawsuit file = Statement of Defense (defendant) o If defendants believe he is the real victim = Counterclaim/Defense to Counterclaim  Applications for directions: concern what details have to be disclosed, what questions have to be answered, etc.  Discovery 1. of documents/ records 2. examination for discovery: Verbal examination of witnesses under oath  Pre-trial conference: meeting to determine which issues remain to be tried and whether the parties can themselves resolve the dispute  Payment into court (formal offer to settle) Recent Initiatives  Reforms to speed up the litigation process, especially when smaller amounts involved o Summary trials with evidence adduced by affidavit (statement made by witness out of court but under oath)  All jurisdictions have created small claims courts with dramatically simplified procedures and reduced costs- in B.C up to $35,000 Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 The Trial  Plaintiff presents case o Burden of proof rests with plaintiff o The plaintiff’s case and witnesses are presented first o Cross examination by defendant’s lawyer o Plaintiff’s lawyer is prohibited from asking leading questions  Rules of evidence must be followed  Defendant presents case  Summarize evidence and make argument to court Judgment  If there is a jury, the judge will instruct it on matters of law  The function of the jury is to decide questions of fact; the judge decides question of law  Judge-alone decisions may be delivered immediately; more common for judge to hand down a judgment in writing later Cost  Litigation costs are high  Judgments may award legal costs o Usually awarded to the victor but this is always at the discretion of the court Remedies  Damages (monetary compensation) o General – not precisely calculated (ex. Car accident, depression) o Special – precisely calculated o Punitive – punish the wrongdoer (usually an action)  Other remedies: o Accounting – defendants wrong conduct paid to victim o Injunction –wanting someone to stop an offending conduct o Specific performance – breaching party that it lives up to terms of agreement o Declaration – official statement by court on the law that goes with the case Enforcement  Examination in aid of enforcement / execution  Seizure of personal property  Sale of real property  Garnishment of wages, account, depts.  Equitable receiver  Prejudgment remedies/attachment  Detain in prison? NEVER! Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Seizure of Property  Execution process allows seizure and sale  Proceeds shared by creditors: o Secured creditor- security for a loan or other indebtedness o Preferred creditors – must be paid before other unsecured creditors  Ex. Landlords owes unpaid rent and employees owe unpaid wages  Necessities of life = exempt from seizure  Funds owed to a debtor can be garnished Judicial Remedies before Judgment  Extraordinary remedies granted only when there is risk that the debtor’s property will be removed from the jurisdiction o Bank accounts and other debts o Property other than money is at risk of being removed or sold  Temporary order granted by the court before the actual trial Class Actions – lawsuit where many people join together to sue because they were harmed by the same person or group (class proceedings)  Identifiable class of persons with a common issue  Avoids inconsistent results  Lower costs for parties and court system  Judgment binds every member of the class Dealing with Regulatory Bodies  Executive branch of government delegates to public administrators and regulators  Complaints against the actions of regulators and administrators are usually heard by “administrative tribunals” o Labor relations boards o Human rights commissions o Workers’ compensation boards  Advantages: o Faster o less costly o discretion o decision making panels – experts in the matter  Tribunal processes may be reviewed by courts to protect public interest Procedural Fairness in Tribunals  From where did the tribunal derive its authority?  Was the decision-making process fair?  What recourse is there has been a failure in jurisdiction or procedure? The Authority of the Decision Maker  Decision makers must be able to point to statutory authority that empowers them to make decision  Rules of statutory interpretation used to guide reading in harmony with the objective and other provisions of the stature  Statues must be passed by appropriate level of government and be complaint with Charter Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 The Fairness of the Process  Rules of Natural Justice set basic standard: o Fair Hearing: complainant must have notice and opportunity to be heard o Decision: must be made by persons hearing all evidence o Impartiality: no bias, or appearance of bias in decision makers  Principles of fundamental justice include procedural fairness, natural justice rules, offends our basic concepts of justice – applicable to private companies and institutions Reviewing a Decision  Judicial review: not the decision, but the process by which it was made  One of the following must be present: o Invalid statue o Decision or remedy goes beyond power set out in legislation o Errors of law on the record o Failure to follow procedural justice o Abuse of discretionary power Methods of Judicial Review  Prerogative Writs – when a public official or tribunal has breached their duty o Certiorari- nullifies a tribunal’s decision o Prohibition – prohibits a tribunal from proceeding o Mandamus – an order compelling a government to perform its duties  Declaratory Judgment – declaration of the law and providing remedies (damages or an injunction to enforce declaration)  Privative clauses may constrain judicial reviews: o Courts interpret it to apply only when the board is acting within its jurisdiction o Court retains right to interpret statutory provisions o Subject to the Charter  Challenging administrative decision may be futile and costly Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 CHAPTER 4 –INTENTIONAL TORTS AND TORTS IMPACTING BUSINESS The Nature of Torts  Tort: social or civil wrong that gives rise to the right to sue and to seek one of several remedies (injunction, punitive or general damages)  Tort has usually been committed when an intentional or careless act harms another  Injured party may sue for redress  Tort law compensate victims, act as a deterrent, and educates society  Crimes are social wrongs that affect society as a whole  Some crimes are also torts: o Standard of proof in tort law is based on “balance of probabilities” test  Tortious activity may be intentional or unintentional negligent acts and remedies differ  Imposed on employers when they are held liable for torts committed by employees during the course of their employment – vicarious liability: both employer and employee liable  Or by statue Intentional Torts  Intentional: meant to do it  Trespass to Person: (Assault and Battery) o Assault: conduct that makes a person think they are about to be struck o Battery: when someone intentionally make unwanted contact w/ another person o Threats o Intent to harm is not required  Courts may award punitive damages Checklist 1. Assault – fear – verbal 2. Battery – hit- physical 3. Trespass – no permission + dumping 4. Nuisance – noise + odor 5. False Imprisonment – can’t leave – shoplifter 6. Defamation – slander – speak - literature – published Defenses  Consent is a defense o Must be informed + voluntary o Physical touching beyond that consented to is battery o Consent can be outlined and limited (medical treatment)  Self-Defense o Reasonable force to defend self or eject trespassers is permissible  C.A.R Consent  Assumption of risk  Remoteness (thin skull rule) Trespass to Land  Begin on another’s land without authority o Ignorance is not a defense o Permission implied for people acting in professional capacity or for business offering public services Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034  Continuing trespass: permanent incursion onto the property of another o Reminded by injunction  Occupier (tenant) owes a lesser duty of care to trespassers than those with authority Trespass to Chattels – Conversion and Detinue  Wrongful interference w/ goods  Trespass to chattels: o Where the plaintiff has possession that is interfered with physically by the defendant  Conversion: o Involves one person intentionally appropriating the good of another person for their own purposes o Everything is illegal from the beginning o Includes theft o One may be sued for conversion if buying goods from someone other than owner  Detinue: o Deals w/ situations where the person is wrongfully retaining the goods o May have come into possessions of them legally but refuses to return them o Calculation of damages essentially amounts to a forced sale of the goods False imprisonment  The unlawful and intentional restraint of persons against their will o Personal liberty is totally restrained o Restraint is unlawful  Defense o Citizens arrest: restraint may be justified if persons have done something for which they may be arrested  Poses a significant risk for businesses if customers are detained when suspected of wrongdoing  Prisoner’s remedy = habeas corpus Malicious Prosecution  Available to victims’ improper use of criminal justice  Conditions: o Defendant in the tort action must have initiated a criminal or quasi-criminal prosecution o Acquittal or prosecution abandoned o No reasonable grounds to have originally proceeded w/ criminal action Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Private Nuisance  Private nuisance: o Interferes with other’s use of their property o Usually close proximity, but private nuisance can occur at distance (ex. Smoke, loud noises) o Canada’s Anti-Spam Legislation (CASL) argues that private nuisance may be effective in combating unwanted email  Because nuisance often involves offending substances, can be used to enforce environmental protection  EXAMPLE: PARTY PLAYING LOUD MUSIC Defamation  a detrimental false statement about someone  must be published or broadcast  defame a corporation or a product  must be clear that it refers to the person suing  damages for defamation can be large  Mistake is a NO NO! Libel and Slander  Slander: spoken defamation  Libel: written defamation  Defamation in media: courts may reduce damages to plaintiffs where material was published in good faith  Defamation on internet: libel  Size of audience is relevant to injury suffered and award Defenses  Defenses to defamation action:  Truth (defense of jurisdiction)  Absolute Privilege (politicians – parliamentary debate)  Qualified Privilege (managers/ employees’ performance)  Fair Comment (public criticism)  Public interest Responsible Journalism Product Defamation (injurious falsehood):  Injurious falsehood: addresses attacks on the reputation of another’s product or business  Trade slander (or product defamation) is distinct from the tort of defamation o Deals with the reputation and value of person’s property o It addresses attacks on the quality of the product o Or upon the title held by another Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Other Torts impacting Business  Inducing breach of contract: o Commonly luring people to breach their current employment or supply contracts  Unlawful interference with economic relations: o Regardless of contract, unlawful conduct associated with the complaint, such as bribery or defamation o Intended to and resulting in harm  Intimidation: o Threat of violence or some other illegal activity forcing a party to do something that harms  Intentional infliction of mental suffering: o Treats and harassment  Deceit (Fraudulent Misrepresentation): o Fraudulent and intentional misleading of another person causing damage  Conspiracy to injure: o Takes place where two or more persons act together using unlawful means to injure the business interest of another  Passing off o Manufacture, store or sell fake goods under another person’s brand  Misuse of confidential information o Breech of confidence Checklist (intentional) Conversion Fraud + Theft Passing of Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 CHAPTER 5 – NEGLIGENCE, PROFESSIONAL LIABILITY, AND INSURANCE Negligence Unintentional tort: Negligence Checklist A.B.C.D A duty of care  Breach of duty  Causation  Damage A: DUTY TO EXERCISE CARE MUST EXIST  Reasonable Foreseeability Test o If it would be apparent to a prudent person that the conduct was likely to cause injury, a duty is owed  We owe a duty to anyone we can reasonably anticipate might be harmed by our conduct Anns Case Test to determine existence of a duty of care: 1. Must have a relationship of proximity between the claimant and defendant a. Harm caused by the defendant’s action was reasonably foreseeable 2. Must be NO policy consideration which restrict or extinguish the duty  Misfeasance = you can go to court o An act that causes harm to another (wrongdoing) o Court will provide remedy  Nonfeasance = failure to act o Courts reluctant to provide remedy o “understood law” o “special relationships” – when one has a duty to act to protect another (parent to his child) B: Breach of the Standard of Care  Reasonable person test: “What would a reasonably prudent person, in possession of all the facts of the case, have done in this situation?”  Standard of care is reasonableness as opposed to average or perfection  Reasonable conduct varies with circumstances  Risk of injury and cost affects standard  Reasonable conduct varies with expertise of person being sued  Expectation for children are lower  Actions that fall below socially acceptable standards create liability for damages  It is not always necessary to show lack of care o Circumstantial evidence may establish a prima facie case C and D: Causation and Damages (thin skull rule)  Unlike intentional torts, which may be actionable without specific damage, negligence requires a loss to person or property  No negligence claim can be made without injury/ harm  In the past, there had to be some actual physical damage but the court now recognizes economic and mental injury (ex. depression) Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 “But for” Test: Physical Causation  Damage must also be a direct result of the careless conduct  “but for” test: “but for” the conduct of the plaintiff, no injury would have resulted (causation) Remoteness Test – Legal Causation  Remoteness test: Whether the specific type of injury suffered was reasonably foreseeable  Remoteness may arise twice in a negligence action o Proximity of the parties o As a factor in causation  Thin skull rule: take victims as they are found; physical or mental conditions o Ex. Osteoporosis example  Crumbling skull rule: tort of law principle is not liable for loses that were inevitable Defenses:  Voluntary assumption of risk: law will not assist those who volunteer to bear risk o volenti non fit injuria – ex. Drunk driving with passengers o The defendant must show that the plaintiff not only assumed the physical risk but also legal risk o volenti – rare today  Contributory negligence o Courts distributes the loss between the parties  Provincial statues now allow court to distribute responsibility among plaintiffs and defendants  Duty is owed to rescuers o Wrongdoers owes a duty of care to rescuers (police officers, etc.)  Illegality (ex. turpi causa) o Courts will not hear a lawsuit brought by a party engaged in unlawful activity o Plaintiff will be unable to pursue legal remedy if it arises in connection with his own illegal act o Rarely successful Occupier’s Liability  Common law, an occupier of property (not the owner) owes a duty to people who come onto the property as licensees and invitees o Most provinces have eliminated the distinction between invitees and licensees o Occupiers must now take reasonable steps to protect all classes of visitors to their property  An occupier cannot do anything willful or reckless to harm a trespasser o Duty of care higher if they are children  Standard of care required of an occupier is governed by provincial statue  Alcohol o Partial responsibility for commercial dispensers of alcohol, business supplying liquor at company activities, but not social host  Liability is for commercial establishments and may be imposed on social host in future Innkeepers’ Liability  Duties of Innkeepers (hotels, motels, restaurants, clubs) o Safeguard guests from wrongful acts of others o Historically, innkeeper responsible unless loss to a guest’s property was caused by that guest’s own negligence o Statues have modified in most jurisdictions – liability as broad as of the occupier Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Strict liability  Liability when there is no fault. In other words, the plaintif does not need to prove fault, negligence or intention  When a dangerous situation is created by an unusual use of property which is inherently dangerous, owner/occupier is liable for all damages  Vicarious liability of an employer (wrongful act of an employee) Product Liability  Manufactured products are often dangerous o Because of some inherent defect o Because of their nature, such as in the case of chemicals, tools or explosives  Manufacturers are liable for injuries caused by defective products o Necessary to establish that there was a duty to be careful and to prove that there was a failure to live up to that duty  Plaintiff must establish that the manufacturer was negligent o Breach of manufacture’s duty can be implied from circumstances – reverses onus  Intermediate inspection by a third party may absolve manufacturer from liability  Warnings about defects by the manufacturer must be sufficiently adequate  Circumstantial evidence can be used to prove breach of duty o = evidence that relies on an inference to connect it to a conclusion of fact- like a fingerprint Liability of Professionals and Other Experts  Professionals belong to professional organizations and practice in a specific area of service  Professional liability and insurance costs are important aspects of business  Liability is o Often set out in contract o Related to tort law, especially negligence o Based on fiduciary duty Contracts  If professionals provide sub-standard service they are liable for the losses resulting from the breech of the contract  Standard of service is normally implied o Professionals implicitly provide reasonable level of performance given claimed expertise  Often professionals attempt to limit that liability w/ exemption clauses Negligent Misstatement  People who suffer economic loss because of a professional’s negligent statement may recover damages  Court use “reasonable reliance” to determine existence of a duty Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Breech of Standard of Care  Professionals and experts held to a high standard o Requires skills and abilities expected to a reasonable professional in that field o Inexperience does not excuse incompetence o Common practice that is dangerous or careless is not an excuse Fiduciary Duty and Breach of Trust  A profession or expert, must o Act with loyalty and good faith o Not act against the interest of clients or former clients without permission o Not use confidential information for own benefit o Not disclose pertinent information o Use extreme care with funds entrusted to them (breach of trust) Professional Insurance  Often a condition of practice for professionals o Protects against damages resulting from errors and omissions o Premiums can be significant business expense and have been rising due to increased number of claims o May cover legal costs when a professional is sued  Does not cover fraud or breach of trust Insurance  Purpose: to reduce the cost of loss by spreading the risk  Insurance transfers the risk from the insured to the insurer  Premiums increase with the amount of risk involved  Tightly regulates o Federal and provincial Insurance Industry  Insurance agent: Duty to insurance company  Insurance broker: Independent business  Both agents and broker also have duty of good faith to customer  Insurance adjuster: Investigate and negotiate on behalf of insurance companies Liability Insurance  Cover damage caused by negligence of self or employees  Does not cover willful acts  Applies only when insured is at fault  Taxes may form o Professional liability insurance o Umbrella liability (extra liability cover) Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Property Insurance  Property o Primarily fire insurance o Comprehensive policies (all loses)  Coverage should correspond to actual value of the property  Co-insurance (share of the cost, usually %) or deductible (amount you pay before the insurer begins to pay Business Interruption Insurance  An unforeseen event causes a business to cease operation for a time  Covers lost profits and expenses of brining business back into operation  Puts insured in same financial position as if the loss had not occurred Life and Health Insurance  Life o Provides for dependents; and/or o Business associates “key person” o After death of insured  Health o Medical: covers health care expenses o Disabilities: provides income for disabled worker o Overlapping extended benefits Bonding  Liability insurance does not cover willful acts such as assault or theft  Bonding offers some protection against losses brought on by employees who may act wrongfully  Fidelity bond o Employee becomes liable to bonding company  Surety bond o Pays, compensation if a job is not completed, or completed on time Insurable Interest  Insured must have personal stake or interest in whatever is being insured, or insurance contract is void  Can only claim on the insurance to the extent of the value of that interest  Legislation may determine in whose life one has an insurable interest  Person taking out the insurance contract must be in a position that he/she will suffer an economic loss if the event insured against occurs Limitation Clauses  Contra Preferentum rule o Contract ambiguities interpreted to favor the party that did not draft the contract o Coverage broadly constructed o Exclusions narrowly constructed Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Good Faith  Insured must reveal relevant information and changes in relevant info.  Affects risk and insurance rates  Insurers duty o Process claims fairly o Arrange legal representations and a defense for the insured Subrogation  Once an insurer has paid out on a claim, they step into their shoes of the insured o Insurer sues in the name of the insured the person who caused the loss  Right of salvage o Insurer’s right to sell damaged or recovered goods  The insured is not permitted to profit from her willful misconduct Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 CHAPTER 6 –THE ELEMENTS OF A CONTRACT: CONCENSUS AND CONSIDERATION Definition of Contract  Contract: a voluntary exchange of compromises, crating obligations which, if defaulted on, can be enforced and remedied by the courts  Generally, parties have “freedom of contract;” they can enter into any contract they wish, with few restrictions Elements of a Contract C.C.C. + L.I.F. Consensus  Consideration  Capacity + Legal  Intent  Formality  Parts of a contract: o Consensus = mutual agreement o Consideration= price each party is willing to pay to participate in the contract o Capacity = legally capable of understanding o Legality= object and consideration involved in the agreement must be legal o Intention= must intend that legally enforceable obligations will result from contract  Verbal agreements are as binding as written ones Consensus  Meeting of the minds of contracting parties  Share an understanding of the bargain struck  Be willing to commit themselves to terms  Terms must be unambiguous  Failure to read a contract is no excuse  Comprise of Offer and Acceptance Offer  Must contain: o All of the terms of the contract o All communication of willingness to be bound o All significant terms of the proposed contract  Terms can be implied  An interim agreement may often be binding o If contains all essential terms  An offer may contain a condition or “subject to” clause o Ex. home purchase offer “subject to” the sale of his house  Option: 90-day option  period you have bought it in which you may or may not accept the offer Invitation to Treat  Invitations to potential customers to engage in the process of negotiation o Advertisements or sales promotions are not binding offers o Articles displayed for sale are not offers but merely invitations for customers to offer to pay the price of the item Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Offer by Conduct  an offer by conduct is capable of being accepted o taking good to the cash desk in a store o Hailing a cab o Gesture at an auction Communication of an Offer  an offer must be communicated  only the person or group to whom an offer is made can accept it  for a contract to be binding, all-important terms must have been disclosed to the offeree  exemption clauses must be brought to the attention of the person granting it The End of an Offer  Offer ends at a specific time or after a reasonable time if not specified  At the death or insanity of the offeror  When it is revoked (withdrawn) before acceptance and communicated to the offeree  When the offer is rejected = a counterofer is put forward o =form of rejection  if the subject matter is illegal  if the subject matter is destroyed Standard Form Contract  Present an offer w/ fixed terms that the customer is invited to accept o Ex. airline tickets  Usually contains one-sided terms favoring the business o Ex. exemption clauses limiting the liability of the business  Consumer protection legislation controls the worst abuses and courts tend to read ambiguity in favor of the disadvantaged party Duty of Good Faith  Good faith contractual performance includes the need for a party to a contract to have regard to the legitimate contractual interest of the other party  Common law duty to act honestly in the performance of contractual obligations Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Acceptance  Offeree’s intention to commit  Must be unconditional  Inclusion of new terms in an acceptance is a counteroffer  Acceptance will not overcome the defect of an incomplete or defective offer  When the wording of an offer is unclear, the courts will interpret the agreement to find the most reasonable construction Communication of Acceptance  Usually by communication to the offeror  Sometimes by conduct  Unilateral contract accepted by performance  Effective at time acceptance is communicated  If you take the benefit of the offer, you are deemed to have accepted it, by conduct  Silence is not acceptance (unless part of on-going business relationship)  Law used to enforce the contract o Contract is formed at the place and time that the offeror learns of the acceptance Post Box Rule  When acceptance is mailed, it is effective when and where it is posted  Rule applies only when response by mail is appropriate  May determine which law applies to contract  ATTENTION!!: revoking an offer when response by mail is requested only takes effect at the time it is received if before acceptance Electronic Transactions: Consensus  Electronic contracts are valid  Problems of electronic transactions: o Internet ad with “click-wrap” may constitute an offer while ads are normally invitations to treat  Post box rule unlikely to apply to electronic transactions o Determining where and when Internet transactions are created is difficult Consideration  Bargaining process: trading promises for promises and all parties derive some benefit  Consideration: price one is willing to pay for a promise of that benefit  All parties must derive some benefit from the deal  Gratuitous (Free) promise: a one-sided agreement in which only one of the parties is getting something from the deal o Not enforceable Adequacy of Consideration  Need not be fair, but o Unfair consideration may indicate undue influence, insanity or fraud o Courts show willingness to assist consumers due to Consumer protection statues  Must have a material value and be stated specifically  New consideration: new price, new benefit Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Gratuitous Promises are not Consideration  Existing Duty: o A change in the contract requires new consideration  Past consideration: o Not a consideration  Paying less to satisfy a debt: o An agreement to accept less to satisfy a debt may not be binding. Courts more willing to accept is as valid consideration  Contracts with illegal consideration are void Exceptions  Promissory estoppel: o Promise is enforceable by law, even if made without formal consideration, when a promisor has made a promise to a promise who then relies on that promise to his subsequent detriment o Must show reliance on a gratuitous promise and resulting damage  Sealed documents: o Courts will not address the issue of consideration of contract has been executed under seal (a Deed) Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 CHAPTER 7 – CAPACITY, LEGALITY, AND INTENTION Minors /Infants  Minors = 18 or 19 under  Minors/Infants= Persons under the age of majority o Not bound by agreements but the adults who take care of them are bound  adult is bound to the contract: o minor can CHOOSE to void it  Infants Act: o A contract made by a minor is unforceable against him. o Minor can enforce the contract on the adult  Contracts online regarding age: o Cannot determine their personal characteristics of the parties with who they are dealing with o Online merchants must use appropriate restrictions and disclaimers in their online contracts Necessaries and Beneficial Contracts of Service  Necessaries= things required to function in society (Food, clothing, transport...)  Minors are bound by contracts: o for acquisition of necessaries o contract of employment o Services that benefit the minor  Minor pay only a reasonable amount for necessaries  When borrowing money to buy necessaries, you HAVE to repay the debt only if the funds advanced are actually used for necessaries  Contracts of employment for service are binding Becoming an Adult  If minor agrees to contract = not bound  After becoming an adult = could ratify the contract and loses the right to avoid the contract  Ratifying the contract makes voidable contracts binding  Ratification: expressed (written) or implied (obtaining benefit)  Ratification must be complete o Cannot pick only the good terms Process of contracts to be obtained:  Executory contract: before the contract is performed; 1st stage when agreement has been made but performance is due  Partially executed contract: stage when one party has performed and the other has not  Executed: a fully performed contract; stage when both parties have performed what their supposed to do Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Parents’ Liability  Parents are not responsible for the torts or contractual obligations of their children  Minor enters a contract that’s his own responsibility  Adult in contract with minor can’t go to the minors’ parents  Exceptions: o Minor is acting as an agent having the appropriate authority to bind the parent in contract o guaranteed the minors’ obligation o Absence of such legislation Infants’ Liability for Torts  Minors that commit torts are treated the same for adults  A breach of contract will sometimes also be a tort of negligence o Courts will not allow an adult to succeed in a tort action against a minor if they would fail in contract for the same act o If tort is a separate act from the breach of contract, then no bar to action Insanity and Drunkenness  Similar to the protection given to minors To qualify for this protection:  Insanity o No understanding of the nature of the transaction o Person claiming insanity has obligation to prove it o Other person knew or should have known of insanity  Drunk o Treated like insanity  Weekend intellect o Unconscionable transaction Others of Limited Capacity  Corporations o Power of a natural person o Some jurisdictions are limited in contracting documents  Knowledge of limit  Crown Bodies o Capacity to contract may be limited by legislation or by regulations  Unions (Trade Unions) o Contracts should relate to union activities o Capacity governed by legislation  Indian Act o Capacity of First Nations is limited to some extent by the Indian Act o Limits to securing and seizing property on a reserve Downloaded by ewfbqerwgfer egrwgewrg ([email protected])  lOMoARcPSD|48348034 Contracts Performed Illegally  Lawful contract performed in an illegal way may be enforced by the court  Illegal performance of a lawful contract may often involve a breach of regulatory legislation that may void the contract  If contact is performed illegally or against public policy, the court may order o Contracts is void and restore parties to their original positions o Enforcement, if violation is procedural and not substantive  The contract itself is illegal o Courts will not restore parties to original position unless one is innocent of wrongdoing  Illegal contracts also involve unacceptable or immoral conduct  Courts may sever the illegal provision of the contract, leaving the balance of the contract enforceable to avoid inequitable judgments Contract Formed Illegally  Contract Examples: o To commit a crime/ a tort o Involving immoral acts o Gambling o In restraint of marriage or in favor of divorce Restrictive Covenants  Limit ability to compete for existing customers  Reasonable o Time limit o Geographic limit  Restrictive covenants in employment contracts are subject to stricter limits Downloaded by ewfbqerwgfer egrwgewrg ([email protected])