HOSPITALITY-AND-TOURISM-LAW.pdf

Legal Aspects in Tourism and Hospitality TOPIC 1: INTRODUCTION TO HOSPITALITY AND TOURISM LAW 1.1 LAW IN GENERAL In its widest and most comprehensive sense, the term “law” means any rule of action or any system of uniformity. It is a body of rules to which people must conform their conduct....

Legal Aspects in Tourism and Hospitality TOPIC 1: INTRODUCTION TO HOSPITALITY AND TOURISM LAW 1.1 LAW IN GENERAL In its widest and most comprehensive sense, the term “law” means any rule of action or any system of uniformity. It is a body of rules to which people must conform their conduct. Also, it is a form of social control and a set of legal instructions used by judges in deciding disputes. Thus, LAW, in general determines not only the activities of men as rational beings but also the movements or motions of all objects of creation, whether animate or inanimate. STATE LAW The law that is promulgated and enforced by the state. Kinds of Law 1. Substantive Law – a law which creates, defines and regulates rights. It is the set of laws that governs how members of a society are to behave. 2. Adjective Law – a law which provides the method or aiding and protecting certain rights. It is the Law procedure enforces the rules and provisions of substantive law; deals with procedure to be adopted in order to enforce a right or duty; and is accessory to substantive law. 3. Public Law – area of constitutional, administrative, criminal, and international law that focuses on the organization of the government, the relation between the state and its citizens, the responsibilities of government officials, and the relations between sister states. It is concerned with political matters, including the powers, rights, capacities, and duties of various levels of government officials. 4. Criminal Law – generally defines the right and obligations of individuals in society. Some common issues in criminal law are the elements of specific crimes and the elements of various criminal defenses. Criminal procedure generally concerns the enforcement of individuals’ rights during the criminal process. 5. International Law – a system of treaties and agreements between nations that governs how nations interact with other nations, citizens of other nations and businesses of other nations. International law typically falls into two different categories. “Private international law” deals with controversies between private entities, such as people or corporations, which have a significant relationship to more than one nation. 6. Political Law – branch of public law which deals with the organization and operations of the governmental organs of the State and defines the relations of the State with the inhabitants of its territory. 7. Private Law – part of a civil law legal system which is part of the jus commune that involves relationship between individuals, such as the law of contracts and torts (as it is called in the common law), and the law of obligations (as it is called in the civil legal systems). 8. Civil Law System – also called continental or Romano-Germanic legal systems, are found on all continents and cover about 60% of the world. They Legal Aspects in Tourism and Hospitality are based on concepts, categories, and rules derived from Roman law, with some influence of canon law, sometimes largely supplemented or modified by local custom or culture. 9. Maritime Law – also known as admiralty law, is a body of laws, conventions, and treaties that govern private maritime business and other nautical matters, such as shipping or offenses occurring on open water. International rules, governing the use of the oceans and seas, are known as the Law of the Sea. 10. Mercantile Law – an assemblage of customs and practices governing a broad range of business practices at the local, country, and international levels. In general, mercantile law sets forth rights, responsibilities, and liabilities of the parties involved in business events. Among other areas, mercantile law addresses the following topic contracts, copyrights, franchising, insurance, licensing, patents and transport of goods. Sources of Law 1. Constitution – with particular reference to the Constitution of the Philippines, it may be defined as “the written instrument by which the fundamental powers of the government are established, limited, and defined, and by which these powers are distributed among the several departments for their safe and useful exercise for the benefit of the people. It is often referred to as the “fundamental law or supreme law or he highest law” of the land because it is promulgated by the people themselves, binding on all individual citizens and all agencies of the government. 2. Legislation – it consists in the declaration of legal rules by a competent authority. It is the preponderant source of law in the Philippines. Acts passed by the legislature are so-called enacted law statute law. Legislation includes ordinances enacted by local government units. 3. Administrative or executive orders, regulations and rulings – they are those issued by administrative officials under legislative authority. Administrative rules and regulations are intended to clarify or explain the law and carry into effect its general provisions. Administrative acts are valid only when they are not contrary to the laws and Constitutions. 4. Judicial decisions or jurisprudence – the decisions of the courts, particularly the Supreme Court, applying or interpreting the laws or the Constitution form part of the legal system of the Philippines. The decisions of a superior court on a point of law are binding on all subordinate courts. This is called the doctrine of precedent or stare decisis. 5. Custom – it consists of those habits and practices which through long and uninterrupted usage have become acknowledged and approved by the society as binding rules of conduct. It has the forces of law when recognized and enforced by the state. For instance, in contract of services rendered where no definite compensation is stipulated, the compensation to be paid may be ascertained from customs and usage of the place. Attributes of Law Law is dynamic, always changing to adjust to societal transformations, yet also striving to remain constant enough not to disrupt the legal order that has Legal Aspects in Tourism and Hospitality developed. Law can be both exciting and difficult field to study. It is not a discipline with clear-cut rules whose applications to factual situations are easy and obvious. Reasonable people can disagree on how and whether a particular rule of law applies in a given case. Sometimes the law on a particular topic may ne unclear because it is in a developmental stage. For example, the law relating to a new technological advances takes time to crystallize. The law is further complicated by the fact that it can vary from state to state. THE ROLE OF THE JUDGE The role of the judge in our legal system is very significant. As we have seen, the judge both “makes’ the law in cases where no precedent or statute exists and interprets the law in cases where a statute applies. We will see that some judges, called appellate judges, also review decisions of other judges. The word judge and court are frequently used interchangeably. CONTRACTS A contract is an agreement between two or more parties that us enforceable in court. If one person fails to abide by the agreement, the other can sue for breach of contract. Unlike statutes, which are laws made by legislature, and unlike common law, which law is made by judges, contracts represent “law” made by individuals. Businesses in the hospitality industry enter numerous contracts on a regular basis, including contracts with guests for hotel rooms and contracts by restaurants with food vendors. TORTS A tort is a violation of a legal duty by one person that causes injury to another. (Breaches of contractual duties, however, are not considered torts). Included among various torts are the following: a. Negligence, which means breach of legal duty to act reasonably, often defined as carelessness. For example, a hotel is negligent if it fails to fix a broken railing on a step in a prompt manner. b. Trademark infringement, which means use of another company’s business name or logo without permission. For example, a restaurant infringes a trademark if it adopts the same name used by another restaurant in the same vicinity without the other restaurants approval. c. Fraud, which is an intentionally statement made to induce reliance by another person. For example, if a resort represents in its advertisements that it has a golf course, but in fact it does not, and a guest opts to stay at the hotel because of the claimed golf activities, this is fraud. EXAMPLES OF CRIMES IN THE TOURISM AND HOSPITALITY INDUSTRY There are many types of crimes. A few that impact the hospitality industry follow. 1. Theft of services is the use of services such as a hotel room without paying and with the intent of avoiding payment. 2. Assault is intentionally causing physical injury to another person most especially in the unfortunate circumstances of assault occurring it hotel rooms and bars as a result of lax security. 3. Rape is forcible sexual intercourse against the victim’s will. Legal Aspects in Tourism and Hospitality 1.2 TOURISM AND TRAVEL LAW TOURISM is a multi-billion-dollar industry. The industry covers areas such as, inter alia, transportation, accommodation, money exchange, immigration and customs, levy taxes. The tourism and hospitality industry represents a broad range of undertakings, including accommodations, restaurants, tourism destination and attractions, airlines and other transportation. TOURISM LAW is a unique area of law which involves general government regulations and specific travel and hospitality industry rules. According to the United Nations World Tourism Organizations(UNWTO), the purpose of Tourism Law is to provide a legal and regulatory framework for the development and management of tourism, preservation of cultural traditions, natural resources and facilitate the involvement of the private sector & local communities in tourism development activities. Tourism Law also reflects not only the rights of international and local tourists, but also the legal responsibilities of inbound-outbound tour operators, travel agents and other significant players in this industry. The main concern in Tourism law is to provide a fair and equitable environment for travel consumers and organizations. For instance, Tourism Law comes into play when it involves goods and services rendered and situations where laws are there to ensure restaurants are serving food which are safe to consume and premises which are free from danger. Tourism Law also encompasses laws in movement of people and goods the World. This includes movements by air, sea, rail and road where each mode of transportation applies different sets of rules and international conventions. Furthermore, Tourism Law also plays an important role in cases or situations involving terrorism, natural disasters, protests, and disease break-outs where visitors and tourists should be aware of their rights and the safety precaution measures that should or could be taken at the time. Tourism Law provides guides and imposes responsibilities and liabilities to the players in the industry to ensure the safety and the well-being of any tourists or visitors under their care in cases which are out of their control as listed above. TRAVEL LAW are laws which regulate both business and individual behavior in the travel industry, while International Travel Law refers to ordinances, rules, treaties and agreements which are used to regulate international travel industry. In addition, laws such as common law, contract law, employment law, trust law and tort law govern the international travel law. Students need to study the Philippine Tourism Law as it will dictate the necessary knowledge and perspective of the legal facets and characteristics of such law and interrelated concepts. The Philippines is governed by many statutes, administrative orders, judicial decisions, rules and regulations. It is imperative to take a closer look on these which affect our tourism industry. The growth and development of the tourism industry is imperative in the context of regional and Legal Aspects in Tourism and Hospitality countryside development. It generates employment, trade and business opportunities. It also promotes strong backward and forward linkages with other industries such as transport, real estate and property development—hotels/resorts, gift shop, restaurant, jewelry and construction among others. Why is there a need to study tourism laws? These are four (4) reasons: First, it protects the rights of travelers and tourism workers. Every Filipino has at least experienced becoming a traveler in one part of his life. Second, to preserve tourism resources where future generations can enjoy. We know that as responsible Filipinos, we can be instrumental in being part of this endeavor of preserving tourism resources such as our infrastructure, natural and human resources, museums, art collection, etc. so that our children, grandchildren would be happy and delighted to enjoy them. Third, to provide better tourism services. Lastly, to promote growth of the tourism industry. In this regard, tourism law will be instrumental in helping our government generate income for our country’s survival and growth so that we can compete in a global economy. What is the effect if there is no Tourism Laws? Our country might be exposed in any acts of TERRORISM. We will not forget what happened during the December 30, 2000 Light Railway terrorist attack, also known as the Rizal Day Attack where many have died and one hundred victims injured. These victims only concern was to avail of the enjoyment of traveling from one place to another through the convenience of the Light Railway Transit, one of the fastest transportation vehicles in Metro Manila. Would it have a difference if the LRT management strictly followed security measures in order to deter such attacks? Another happening for us to be reminded is The explosion of Newman Goldliner air- conditioned bus traveling in Makati City on January 25, 2011, where it was confirmed that 4 people were killed, and 14 others wounded. What do you think should have been the security measures that the bus company would have done to prevent such attacks? Which government agency should have been responsible so that the same incident would not happen again or at least be minimized? Also, let us put into perspective the OIL SPILL I N THE GUIMARAS ISLANDS. The oil tanker M/T Solar I, carrying more than two million liters of bunker fuel, sank on August 11, 2006 at the Guimaras Strait off the coast of Guimaras and Negro Occidental provinces, causing some 500,000 liters of oil pour into the strait. Such oil spill has now adversely affected marine sanctuaries and mangrove reserves in three out of five municipalities in Guimaras Island. Alongside with that is THE 2007 GLORIETTA EXPLOSION. This occurred in the Glorietta 2 section at Ayala Center in Makati, Metro Manila on October 19, 2007. The blast killed eleven and injured at least 126 persons. The most probable cause, according to authorities, was the accumulation of methane gas in the buildings septic tanks, as well as other combustible materials in its basement. Authorities, however, are not ruling out the possibility of a terrorist attack and are still investigating the incident to discover the true cause of the explosion and for the ownership of the thing at the time it is delivered. Lastly, the sinking of the MV Princes s of the Star made the Philippine Coast Guard and the owners of Sulpicio Lines in a very bad light. Whoever is responsible for the death and injury of the passengers in MV Princess of the Star, you cannot however remove the fact that tourism law still play the vital part in assessing the responsibilities and liabilities, not only the ship captain and owner of Legal Aspects in Tourism and Hospitality the MV Princess of the Star, but also the proper government agency. These are some of the major tragedies that happened and if there is no tourism law and hospitality law applied, the more tragedies will happen and it be more gruesome. TOPIC 3: INTRODUCTION TO LAW ON OBLIGATION AND CONTRACTS ARTICLE 1156. An obligation is juridical necessity to give, to do or not to do. Civil Code Definition: The Civil Code defines obligation in its passive form in Article 1156. When it comes to responsibility as a legal requirement (juridical necessity), our law simply emphasizes the debtor’s or obligors (he who has the duty of giving, or not doing) duty. Obligation is a juridical necessity because in case of noncompliance, the courts of justice may be called upon by aggrieved party to enforces its fulfillment or, in default thereof, the economic value that it represents. In a proper case, the debtor or obligor may also be made liable for damages, which represents the sum of money given as a compensation for the injury or harm suffered by the creditor or oblige (he who has the right to performance of the obligation) for the violation of his rights. Essential requisites of an Obligation 1. Passive subject (called debtor or obligor) – the person who is bound to the fulfillment of the obligation; he has a duty. 2. Active subject (called creditor or obligee) – the person who is entitled to demand to the fulfillment of the obligation; he who has the right. 3. Object or prestation/benefit (subject matter if the obligation) – the conduct required to be reserved by the debtor or obligor. It may consist in giving, doing, or not doing. Without prestation, there is nothing to perform. 4. Juridical or legal tie (also called efficient cause) – that which binds or connects the parties to the obligation. The tie in an obligation can easily be determined by knowing the source of the obligation. Example: Under a building contract, X bound to himself to build a house for Y for Php 1,000,000.00. Here, X is the passive subject, Y is the active subject, the building of the house is the subject or the prestation, and the agreement or contract, which is the source of the obligation, is the juridical tie. Suppose X had already constructed the house and it was the agreement that Y and X after the construction is finished, X then becomes the active subject and Y, the passive subject. Legal Aspects in Tourism and Hospitality Kinds of Obligation, according to the subject matter a. Real Obligation (obligation to give) is that in which the subject matter is a thing the obligor must deliver to the obligee. Example: X (a seller) binds himself to deliver a piano to Y (buyer) b. Personal obligation (obligation to do or not do) is that in which the subject matter is an act to be done or not to be done. There are 2 kinds of personal obligation. a. Positive personal obligation – obligation to do or to render service. (Art. 1167) Example: X binds himself to repair the piano of Y. b. Negative personal obligation – obligation not to do (which naturally includes obligations “not to give”). (Art. 1168) Example: X obliges himself not to build a fence on a certain portion of his lot in favor of Y who is entitled to a right of way over said lot. Sources of obligations Article 1157. Obligation arise from: 1. Law; 2. Contracts; 3. Quasi-contracts; 4. Acts or omission punished by law; 5. Quasi-delicts 1. Law – when they are imposed by law itself. Example: Obligation to pay taxes, obligation to support one’s family (legal marriage) (Art. 291) 2. Contracts – when they arise from stipulations of the parties. (Art. 1306) Example: The obligation to repay a loan or indebtedness by virtue of an agreement. 3. Quasi- contracts – when they arise from lawful, voluntary and unilateral acts which are enforceable to the end that no one shall be unjustly enriched or benefited at the expense of another. (Art. 2142) In a sense, that obligations may be considered as arising from law. Example: The obligation to return money paid by mistake or which is not due. (Art. 2154) 4. Crimes or acts or omissions punished by law – when they arise from civil liability which is the consequence of a criminal offense. (Art. 1161) Example: The obligation of a thief to return the car stolen by him; the duty of a killer to compensate (someone) for harm or loss of the heirs of his victim. 5. Quasi-delicts or torts – when they arise from damage caused to another through an act or omission, there being fault or negligence, but no contractual relation exists between the parties. (Art. 2176) Example: the obligation of the head of the family that lives in a building or part thereof to answer for damages caused by things thrown or falling from the same. (Art. 2193); the obligation of the possessor of an animal to pay for the damage which it may have caused. (Art. 2183) Legal Aspects in Tourism and Hospitality TOPIC 3.1: NATURE AND EFFECT OF OBLIGATIONS Article 1163. Every Person obliged to give something is also obliged to take care of it with proper diligence of a good father of a family unless the law or the stipulation of the parties requires another standard of care. Breaches in Obligation Art. 1170 Those who in the performance of their obligation are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. 1. Fraud (Deceit or Dolo) As used in Art. 1170, it is the deliberate or intentional evasion of the normal fulfillment of an obligation. It is synonymous to bad faith in that, it involves a design to mislead or deceive another. Example: Susan (wine seller) obliged herself to deliver to Blake (restaurant owner) 20 bottles of wine of a particular brand. Subsequently, Susan delivered 20 bottles knowing that they contain cheaper wine. Susan is guilty of fraud and is liable for damages to Blake. Two types of Fraud: a. Causal Fraud (dolo causante) – Fraud in obtaining consent. b. Incidental Fraud (dolo incidente) – Fraud in the performance of the obligation. 2. Negligence (Fault or Culpa) - It is any voluntary act or omission, there being no malice, which prevents the normal fulfillment of an obligation. (Art. 1173, 1174) - According Supreme Court, it is the failure to observe for the protection of the interests of another person, that degree of care, precaution of vigilance which that circumstances justly demand, whereby such other person suffers injury. Elements of Negligence: a) Duty on the part of the defendant to protect the plaintiff from injury of which the latter complains b) Failure to perform such duty c) An injury to the plaintiff through such failure 3. Delay (Mora) - The word “delay”, as used in the law, is not to be understood according to its meaning in common parlance. A distinction, therefore, should be made between ordinary delay and legal delay (default or mora) in the performance of the obligation. Two types of Delay: a. Ordinary delay – is merely the failure to perform an obligation on time. b. Legal delay or default or mora – the failure to perform an obligation on time which failure constitute a breach of the obligation. Legal Aspects in Tourism and Hospitality Fortuitous Event A fortuitous event is any event which cannot be foreseen, or which, though foreseen, is inevitable. Stated otherwise, it is an event which is either impossible to foresee or impossible to avoid. The essence of a fortuitous event consists of being a happening independent of the will of the debtor or obligor and which happening, makes the normal fulfillment of the obligation possible. Fortuitous event distinguished from force majeure (unforeseeable circumstances that prevent someone from fulfilling a contract): 1. Acts of man. – strictly speaking, fortuitous event is an event independent of the will of the obligor but not of other human wills. Examples: war, fire, robbery, murder, rebellion etc. 2. Acts of God. – they refer to what is called “majeure” or those events which are totally independent will of every human being. Requisites of a fortuitous event: 1. The cause of the breach is independent of the debtor’s will 2. The event is unforeseeable or unavoidable 3. The event is such as to render it impossible for the debtor to fulfill his obligation in a normal manner 4. The debtor did not take part in causing the injury to the creditor General Rule: No one is liable for fortuitous event Exception to General Rule: 1. Law or stipulation expressly so declare 2. Nature of the obligation requires the assumption of risk 3. Obligation is the other than an obligation to give a specific thing 4. Debtor is already in delay TOPIC 4: CONTRACTS Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself with respect to the other, to give something or to render some service. Art. 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. (1255a) The common characteristics of a contract are: M – Mutuality of contracts A – Autonomy (Liberty of contracts) R – Relativity of contracts C – Consensuality of contracts O – Obligatory force of contracts Legal Aspects in Tourism and Hospitality 1. Mutuality of contracts Validity and performance cannot be left to the will of only one of the parties. Purpose is to render void contract containing a condition which makes fulfillment dependent exclusively upon the uncontrolled will of the one of the contracting parties. 2. Autonomy (Liberty of contracts) This is the freedom to stipulate in contracts. Entering into contracts is a guaranteed right of the citizens. They are free to do so as long as it is not contrary to law, good morals, customs, public order and public safety. 3. Relativity of contracts Binding only upon the parties and their successors. Contracts take effect only between the parties, their assignments and heirs. No one may contract in the name of another. 4. Consensuality of contracts Art. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. (1258) Exception of the rule in this characteristics are the Real and Formal contracts. 5. Obligatory force of contracts Constitute the laws as between the parties. Essential Requisites of a Contract General provision: Art. 1318. There is no contract unless the following requisites concur: 1) Consent of the contracting parties; 2) Object certain which is the subject matter of the contract; 3) Cause of the obligation which is established. 1) CONSENT Art. 1319. Consent is a manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified acceptance constitutes a counter – offer. Requisites of Consent: a. It must be manifested by the concurrence of the offer and acceptance. b. The contracting parties must possess the necessity legal capacity. c. It must be intelligent, free, spontaneous, and real (not vitiated) Vices of consent: a. Error or mistake (Art. 1331 In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract. Mistake as to the identity or qualifications Legal Aspects in Tourism and Hospitality of one of the parties will vitiate consent only when such identity or qualifications have been the principal cause if the contract. A simple mistake of account shall give rise to its correction.) - Mistake or error is the false notion of a thing or a fact material to the contract. b. Violence or force (Art. 1335, par 1 There is violence when in order to wrest consent, serious or irresistible force is employed.) Nature of violence or force Violence requires the employment of physical force. Under Art. 1335, to make consent defective, the force employed must be either serious or irresistible. c. Intimidation or threat or duress (Art. 1335, par. 2 There is intimidation when one of the contracting parties is compelled by a reasonable and well- grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent.) Nature of intimidation or threat Intimidation to vitiate the consent of a party to contract, there must produce a reasonable and well-grounded fear of an evil where the evil must be imminent and grave. d. Undue influence (Art. 1337 There is undue influence when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. The following circumstances shall be considered the confidential, family, spiritual, and other relations between the parties, or the fact that the person alleged to have been unduly influenced was suffering from mental weakness, or was ignorant or in financial distress.) - Undue influence is influence of a kind that so overpowers the mind of a party as to destroy his free will and make him express the will of another, rather than his own. e. Fraud or deceit (Art. 1338 There is fraud when, through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to.) Insidious words and machinations constituting deceit including false promises, exaggerations of hope and benefits, abuse of confidence, fictitious names, qualifications or authority. 2) OBJECT Legal Aspects in Tourism and Hospitality Art. 1347. All things which are not outside the commerce of men, including future things, may be the object of a contract. All rights which are not intransmissible may also be the object of contracts. Requisites of things as object of contract: a. The thing must be within the commerce of men, that is, it can be legally be the subject of commercial transaction. b. Impossible things or service cannot be the subject of contracts. c. It must be in existence or capable of coming into existence. d. The object of every contract must be determinate as to its kind. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine the same, without the need of a new contract between the parties. 3) CAUSE Art. 1350. In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other; in remuneratory ones, the service or benefit which is remunerated; and in contracts of pure beneficence, the mere liberality of the benefactor. Meaning of Cause Cause (Causa) is the essential or proximate purpose which the contracting parties have in view of entering into the contracts. Meaning of Motive Motive is the purely personal or private reason which a party has in entering into a contract. It is different from the cause of the contract. Cause distinguished from motive: a. Cause is the immediate or direct reason, while motive is the remote or indirect reason. b. Cause is always known to the other contracting party, while motive may be unknown. c. Cause is the essential element of a contract, while motive is not. d. The illegality of the cause affects the validity of a contract, while the illegality of one’s motive does not render the contract void. TOPIC 5. CONSTITUTIONAL PROVISIONS IN THE HOSPITAL SETTINGS AND GUARANTEED RIGHTS THE BILL OF RIGHTS What is Bill of Rights? It is a formal declaration or enumeration of the fundamental rights secured and guaranteed by the Constitution to the individuals. What is the purpose of the Bill of Rights? Its purpose is to protect the people against arbitrary and discriminatory use of police power. Legal Aspects in Tourism and Hospitality What is Due Process of Law? It is a law that hears before it condemns which proceeds upon inquiry and renders judgment only after trial. What are the Elements if Due Process? The elements are the following: 1) Notice 2) Court 3) Jurisdiction 4) Hearing 5) Decision What is Equal Protection of the Law? It means that no person or class of person shall be denied the same protection of the laws which is enjoyed by other person or group of persons in the same place an under like circumstances. Criminal Rights of the Accused What are the Criminal Rights of the Accused? 1) The right to be informed of his right to remain silent and to counsel. 2) The right to bail. 3) The right to be presumed innocent until the contrary is proven and the right to be heard by himself and counsel. 4) The right to be informed of the nature and cause of the accusation against him. 5) The right to a speedy, impartial and public trial. 6) The right to meet the witnesses face to face. 7) The right to a speedy disposition of his case before judicial, quasi-judicial or administrative body. 8) The right against self-incrimination. 9) The right against excessive fines. 10) The right against double jeopardy. TOPIC 6. LAW ON PARTNERSHIP AND CORPORATION 6.1 What is the PARTNERSHIP? Partnership – an association of two or more persons to carry on as co-workers od a business for profit. Partnership contract is based on trust and confidence. Essential requisites of a partnership: 1) An agreement to contribute money, property, industry to a common fund. 2) Intent to divide the profits among themselves. ADVANTAGES of forming partnership: 1. Easy to form 2. Improved growth possibilities – this proves that two heads are better than one. More people could contribute more ideas in developing the business. Legal Aspects in Tourism and Hospitality DISADVANTAGES of forming a partnership: 1. Unstable 2. Difficulty in obtaining large sums of capital 3. Firm is tied to the acts and of judgement of one partner. Dissolution and Winding Up of a Partnership Article 1830. Dissolution is caused: 1. Without violation of the agreement between the partners: (a) By the termination of the definite term or particular undertaking specified in the agreement. (b) By the express will of any partner, who must act in good faith, when no definite term or particular undertaking is specified. (c) By the express will of all partners who have not assigned their interests or suffered them to be charged for their separate debts, either before or after the termination of any specified term or particular undertaking. (d) By the expulsion if any partner for the business bonafide in accordance with such power conferred by the agreement between the partners; 2. In contravention of the agreement between partners, where the circumstances do not permit a dissolution under any other provision of this article, by the express will of any partner at any time; 3. By any event which makes it unlawful for the business of the partnership to be carried on or for the members to carry it on in partnership; 4. By the death of any partner. 6.2 Law on Corporation Corporation – is an artificial being created by operation of law, having the right the right of succession and the powers, attributes and properties expressly authorized by law to its existence. Kinds of Corporation 1. Stock corporation – one which has a capital stock divided into shares and is authorized to distributed to the holders of such shares/ dividends or allotments of the surplus profits. It is organized for profit. (they are selling stocks/shares to the public) 2. Non-stock corporation – is a corporation organized principally for public purposes such as charitable, educational, and cultural and does not issue to stock to its members. 3. Corporation De Jure – a corporation organized in accordance with the requirements of law. 4. De facto Corporation – a corporation where there exists a flaw in its incorporations. 5. Public Corporation – one formed or organized for the government of a portion of the State. It is created by its own charter for the exercise of a public function. Examples: Barangay, City, Municipality 6. Private corporation – one formed for some private purpose, aim or end. Legal Aspects in Tourism and Hospitality 7. Domestic Corporation – a corporation formed, organized and existing under the laws of the Philippines. ADVANTAGES of a Corporation organization: 1. Limited liabilities to investors 2. Free transfer of units of ownership 3. Centralized management through the Board of Directors 4. Professionalism 5. Easier to sell small amounts of stock to raise capital DISADVANTAGES of a Corporate Organization: 1. Extensive government regulation 2. Double taxation 3. Activities are limited by charter and various laws. Distinction Between a Partnership and a Corporation 1. A partnership is created by the agreement of the parties, while corporation is created by law. 2. In a partnership, the liability of the partners extends to their personal properties, while the liability of the stockholders in a corporation is limited only to the extent of the shares of stock subscribed by them. 3. A partnership may be organized by only two persons; while a corporation requires at least five (5) but not more than 15 incorporators to organize. 4. A partnership has no right of succession, while a corporation has such right. 5. A partnership may be established for any period of any time stipulated by the partners, while a corporation may exist for a term of 50 years to be extended for another term not exceeding 50 years. Dissolution of a Corporation: Corporation are dissolved as follows 1. Voluntarily, by filling the paper the proper papers with the Securities and Exchange Commission. No hearing is required if there are no creditors affected. 2. Involuntarily upon verified complaint filed with the Securities and Exchange Commission, upon notice and hearing and on grounds authorized by law as in the following: (a) Fraud or misrepresentation as to paid up capital of the corporation (b) Ultra vires acts which are persistent despite SEC warnings (c) Continuous inactivity of the corporation for at least 5 years (d) Refusal to adopt or approve by-laws (e) Serious dissension in the corporation. 3. Expiration of the term of the corporation 4. Shortening of the corporate term 5. Failure to organize and commence business within two years from the date of issuance of certificate of incorporation. 6. Legislative dissolution.