MGT393 - Legal Environment of Business I

Lesson 1 - When we have a case we have facts, we identify issues, the law shows a difference between title and possession, then we have to do some analysis. (FILAC) Rolex watch case The thief got possession but not ownership. Because you can only give what you have, the thief gave possession to the buyer, therefore, you still own the watch. In terms of insurance, you either have to return the money or the watch. You sell the watch and the cheque bounces and the person sells the watch. The analy

1. Classifying Law - Positive law → International and Domestic Substantive law - rights and duties of each person to society Procedural law - rules that deal with how substantive rights and duties may be enforced. Criminal & civil procedure. Public law - constitutional, criminal, taxation. About government. Private law - contracts, torts, property law. 2. Who Makes Law? Government through federal, provincial or even local legislation or courts through case decisions. 3. Legal Systems - Civil L

1. Liability of Professionals Arises from Three types of relationships: Contractual, fiduciary, duty of care owed in tort. Contractual obligations - A breach of the explicit or implicit promise to provide services competently is a breach of contract. Fiduciary duty - A duty that may apply in relationships of trust with a professional. This duty has three characteristics: The fiduciary can exercise some discretion of power He can use this power to affect the beneficiary’s interests The beneficiar

1. The Role of Contract Law Prime example of voluntary legal relationships. Only after parties agree to make a contract, they are bound to comply to its terms. 2. The Nature of a Contract A promise the law will enforce. Those require to have an offer, acceptance, consideration, and intention. 3. The Nature of an Offer An offer is a description of a promise one party, the offeror, is willing to make, subject to the willingness of the other party, the offeree, to agree to the same promise. A mer

1. The Meaning of Consideration Consideration is required to turn an accepted offer into an enforceable contract. The consideration is the price at which the other’s promise is bought through the creation of a bargain. 2. Gratuitous Promises A promise made without a bargain is a gratuitous promise and it’s not enforceable in law. A charity can sue the estate of donors who died before completing a large pledge. If they undertook a new project as the price of the pledge or give something in retur

Fine print terms 1960’s ticket cases. Valet to squeeze in more cars. Pay, get a ticket, put in pocket. Come back to no car, someone tells you the lot closes and puts the key under driver’s seat. Ticket says that lot is not responsible for any loses. Is the fine print part of the contract? Decided that not. Signs were put up. When you sign a form you are bound to the provisions whether you read them or not. Mr. Clandely v Tilda rent a car: Fine print - if you drink any alcohol you are liable for

1. The Narrow Meaning of Mistake A mistake is not quite the same as a legal mistake. Only certain kinds of mistakes will make a contract void and thereby qualify for equitable relief. If the benefits from the contract have been consumed, the party loses the right to rescind (ask to set the contract aside). The mistakes must also be about the facts, not the law. 2. Void and Voidable Contracts A void contract means that in law it was never formed at all. If a contract is void, there was no contra

1. The Distinction between Substance and Form The benefit of a written record - Contracts can exist entirely in the parties’ heads or online therefore the substance isn’t the form. Human memory is imperfect and it’s harder for judges to understand the exact form with oral contracts. Written evidence is always best. Legislation dealing with writing: In many cases, oral and written contracts are equally enforceable. However, common law identifies high risk contracts that must be written on paper o

The Interpretation of Express Terms Two approaches to interpretation Strict or plain meaning approach: ordinary or dictionary meaning. Liberal approach: Looks at intention behind the contract and stresses the circumstances. How the courts apply the approaches - The court decides for each case how far beyond the dictionary they should look. How the courts choose between conflicting testimony - Often seek corroboration from a non party and when needed decide themselves which testimony is more rea

1. Privity of Contract The limited scope of contractual rights and duties: In general, a contract is imposed only on the parties who agreed to it. Sometimes, contracts, however, do affect others. To win in a lawsuit, the plaintiff will have to prove privity of contract; that is, him and the defendant both being parties to the same contract. Therefore, a third party or a stranger generally cannot sue. Comparison with the rights and duties in tort Liability of sellers of goods - When buying goods,

Discharging a contract is canceling or ending obligations. Can be discharged by performance, agreement, frustration, and operation of law. 1. Discharge by Performance Nature - When both parties perform, the contract ends. Tender of performance - an attempt to perform (ready, willing, and able). If a party refuses to accept a tender, the tending party is under no obligation to try again. However, a debtor must find their creditor to repay but if they were refused generally interest and court cos

1. The Sale of Goods Act Consumer protection legislation - since the Sale of Goods act doesn’t apply to consumers, this was created to protect private consumers. Contracts of sale - in the SGA a contract of sale is the transfer of goods by a seller for money consideration which is the price. Therefore, a barter isn’t a part of the statute. A sale is the transfer of goods at the moment of contract and an agreement to sell is a transfer at a later time. This includes goods to be manufactured/grow

1. Sole Proprietorship A person who starts a business, a sole individual. There are no special regulations but all business regulations apply. They might need to acquire a license like plumber or car dealer. The business income is the owners income. The business entity is the business (accounting) but the legal entity is the person. You can register a business name, if it’s free, but your name is the legal entity name. The owner of the business can’t be an employee but it can hire employees. The

1. Corporation vs Partnerships Liability - A shareholder in a corporation can’t lose more than the price of the shares. Shareholders have limited liability. Directors, however, have some personal liability. Transfer of ownership - Since shareholders don’t have liabilities, they can cut all connections with a corporation simply by selling the shares. Management - Shareholders have no authority to bind their corporations to contractual obligations. A partnership usually requires unanimity while co

1. What is Corporate Governance? The management of the business (external relationship between the corp and those who deal with its business) & affairs (internal relationship between those running the corp and those who benefit from it) to reach its objectives and responsibilities. 2. The Business Structure of the Modern Business Corporation The shareholders, board of directors, and officers are the three groups in common to all corporations. Public corps must have an Audit Committee of indepen

1. Liability Arising from Business Responsibilities Types of liability - Proactive protective requirements are designed to prevent problems before they occur while punitive requirements are designed to punish bad behaviour. Some of these are regulatory offences. Offences less serious than criminal that are created by specialized legislation. The requirement of Mens Rea (guilty mind) - For most offences, the prosecution has to prove that a person has done what’s attributed to him beyond a reasona