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A Law is a rule that can be enforced by the courts (distinguish from moral obligation). Duty to Rescue Scenario: You are in a canoe, all alone. You see a person thrashing about in the water, about 100 feet away, in distress. The water is cold, and you do not have a life jacket. You are an adequate swimmer. What do you do, for the person in distress? Do you have a moral obligation to save the person- if so, why? What is the source of that obligation. Do you have a legal obligation to rescue the person? If Yes, what is the source of that obligation? What is the consequence of a failure to comply with any moral obligation in the circumstances, as set out? What is the consequence of a failure to comply with any legal obligation in the circumstances, as set out?
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The Nature of Law

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Chapter 1 Overview
Sources of law: 1) the Constitution 2) the Parliament and the legislatures 3) The Courts Relevant for Consumers generally but particularly relevant for Business people. Legal Education plays a critical role in Risk Management: the process of identifying, evaluating and responding to the possibility of harmful events (i.e. avoid getting sued).

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Why Study Law?

Examples of questions that may arise in Business: Contract Law does a contract for products and services have to be in writing? Is an Offer to Lease a vacant store in a shopping mall a valid contract? Is a contract with a Minor a valid contract: does the validity of this contract depend upon the purpose of the contract? Employment Law Do I have to warn my employee of her poor performance, before I fire her? Tort Law If somebody slips and falls on the icy sidewalk outside my store, am I legally liable? u My competitor wrote a letter and circulated it in my community, alleging that the products that I sell are defective: can I sue my competitor to have him stop the circulation of this letter? u As an auditor, do I need to be concerned as to the audience for the information in my financial statements? What about Other obligations must I comply with municipal Copyright 2011 Pearson Canada Inc. restrictions?

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Concept of Risk Management

A Business person must manage legal risks: Risk Management is the process of identifying, evaluating and responding to the possibility of harmful events. 1. Identify the Risk i.e. Whats the likelihood that Ill get sued, if I continue to sell a defective product? 2. Evaluate the Risk: What is the likelihood of liability? Is it worthwhile to manage the risk or should I simply accept the risk? How serious is the risk that I will get sued? Is it likely that the lawsuit would be successful, against my company? 3. Response to the Risk: Reaction to the risk: What should I do, about the risk? What are my options?
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Forms of Risk Management

Forms of risk management: (1) Risk avoidance: elimination of risk withdraw dangerous product from market (2) Risk reduction: minimization of risk i.e. modify product to reduce danger Practical example: A bank manages its risk in lending monies on a commercial mortgage by registering an interest (i.e. a lien) on title: if the bank does not get its monies back, it may seize the property and sell it, to recoup its monies.
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Forms of Risk Management contd

(3) Risk shifting: Transfer the risk to someone else Use an exclusion clauses, Hire an independent contractor Buy liability insurance for losses caused by danger (4) Risk acceptance: Accept the risk Do nothing: when is this a suitable strategy?

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3 Methods to Manage Risk 1. Insurance : a contract in which one party agrees, in exchange for a price, to pay a certain amount of money if another party suffers a loss. Insurance basically shifts the risk. i. Liability insurance [Note: Duty to Defend Concept] ii. Property insurance i.e. motor vehicle insurance 2. Exclusion and limitation clauses: These are clauses which are contractual terms that change the usual rules of liability or that limit the amount of compensation available. u At a ski resort, you will have to sign a waiver that you will not sue for injuries no matter what. u At a parking lot, there may be a sign stating that customers park at their own risk and the parking company is not liable for property damage that occurs on site.
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Examples of Risk Management

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Methods to manage Risk

3. Incorporation: An individual who chooses to act in a personal capacity may be held personally liable for any debts or liabilities incurred by the business. To avoid some of those risks, many businesses are set up as companies or corporations. The result is that it is the company itself and not the directors or shareholders that may be held liable for the debts. Note: the concept oflimited liability means directors and shareholders are not usually liable for debts of the company. But, employees, directors and officers may still be held personally liable for the torts they commit.
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rules and laws A law is a rule that can be enforced by the courts. all laws are rules but not all rules are laws rule against handling soccer ball is not law Distinguish between morality and law moral wrongs are informally sanctioned If you cheat on your partner, is that a moral wrong or a legal wrong? What is the consequence? legal wrongs are formally sanctioned Imprisonment or damages are a penalty for a legal wrong
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Jurisdiction refers to a geographical area that uses the same set of laws. There are 2 types of legal systems: 1. Civil law jurisdictions can be distinguished from common law jurisdictions. These trace their history to ancient Rome, France, etc. 2. Common law jurisdictions trace their history to England. Some types of laws are the same across Canada, i.e. criminal laws and constitutional laws. (i.e. There is a federal Criminal Code that applies to all Canadian citizens) All provinces in Canada rely upon the common law system, other than the province of Quebec which uses the civil law system.
Note: *Civil Law refers to a legal system as per above but it also refers to Private Law as distinguished from Public Law. Copyright 2011 Pearson Canada Inc.

Civil Law and Common Law

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The Law

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A Map of the Law

public law vs. private law
Public law: matters of public concern Includes constitutional law, administrative law, criminal law, and tax law.
Note: Criminal law and tax law are federal in nature, the Criminal Code is applicable across Canada.

Private law: matters of private concern Includes the law of torts, the law of contracts, and the law of property.
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1. constitutional law rules governing basic operation of law and politics. Constitutional Law determines who is entitled to create and enforce laws and it establishes the fundamental rights and freedoms that Canadians enjoy. 2. Administrative law rules governing creation and operation of agencies, boards, tribunals, and commissions that exercise delegated authority. Administrative law is concerned with the creation and operation of the regulatory bodies, agencies, commissions and tribunals that derive power from being delegated or assigned responsibility from Copyright 2011 Pearson Canada Inc. government.

Public Law

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Public Law
3. criminal law Deals with offences against the state. It is concerned with people who break rules that are designed to protect society as a whole (i.e. prescribes punishment for assault) It is applicable across Canada.

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Criminal continued: crimes in the business world: white collar crimes (committed by people in suits) corporate crimes (committed by a company itself) a company can now be convicted under the Criminal Code on the basis of acts performed by directors, officers, managers, partners, employees and agents s.217.1 Note: A singular act may be both a criminal act and a tort (a type of private wrong). If Mark punches John, Mark may be convicted of assault and also may be sued by John civilly for damages. 4. Tax law Is concerned with the rules that are used to collect money for public spending.

Public Law

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Private Law
Private Law is concerned with rules that apply in private matters. (Note: private law can also apply to governments (i.e. a private person can sue government). 3 Categories: 1. Tort Rules governing wrongs against persons This can be sub-divided into: i) intentional torts (ie. assault and false imprisonment); ii) business torts such as deceit and conspiracy; and iii) negligence (i.e. I dont shovel my icy sidewalk and you slip and fall and sue me)
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Private Law
2. contract law Rules governing creation and enforcement of agreements This can be sub-divided into: i)sale of goods; ii)use of negotiable instruments; iii) real estate transactions; iv) the operation of corporations; and v) employment relationships

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Private Law
3. property law rules governing acquisition, use, and disposition of property This can be sub-divided into: i) real property which involves lands and things affixed to land ii) personal property; and iii) intellectual property.
Note: There are also several areas of law that deals with all forms of property like the law of succession and the law of trusts
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Sources of Law
Hierarchy of Sources of Law: 1) Constitution: The Constitution Act, 1982 2) Legislation: law created by Parliament or the legislature i.e. the Criminal Code of Canada 3) Courts: courts interpret legislation and make decisions, these decisions form law called common law.

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The Constitution
Provides basic rules for legal and political systems General rule: every law in Canada must be consistent with the Constitution. If it is not compatible, the law is of no force or effect (section 52) Difficult to amend amending formula requires consent of both Parliament and 2/3 of all provinces with at least 50% of population.
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Federalism
Canada is a federal country: it has 2 levels of government (provincial and federal) 1. Federal government represents entire country Parliament located in Ottawa governs the country as a whole; composed of two parts: MPs who are elected and the Senators who are appointed. Queen of England (because Canada began life as a British Colony).

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Federalism
2. Provincial and territorial government represents province and territory Members elected (MLAs) that sit in the Legislative Assembly (elected) The leader of party forming government is the premier

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Division of Powers
The Constitution creates division of powers Areas of authority are divided into federal or provincial authority: (1) Section 91 specifies matters under Federal control, such as: crime, bankruptcy, copyright, etc. (2) Section 92 specifies mattes under Provincial control: property, civil rights, etc. Federal government holds residual power (areas not specifically allocated to federal or provincial responsibility will fall within federal authority (i.e. telecommunications)
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Division of Powers
Doctrine of federal paramountcy: this doctrine determines which law is pre-eminent if there is a conflict between a federal statute and a provincial statute (it will be the federal) ultra vires legislation This is legislation which is created outside scope of governments authority, it literally means beyond the power). Such legislation is of no force or effect (section 52).

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Charter of Rights and Freedoms

Introduced in 1982, when it was written into the Constitution Introduced to protect basic rights and freedoms: Fundamental freedoms include freedom of conscience and religion (section 2); Freedom of mobility protected (section 6) Equality rights protected (section 15) every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination
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Charter continued
Prohibited grounds of discrimination include race, sex and religion, but not poverty. interests not protected by Charter: economic and property interests

Note application of Charter: It is not applicable to private disputes.

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1. The Charter was introduced to govern the relationship between the individual and the state (section 32) So, the Charters rights and freedoms have full effect only if a person is complaining about governments behavior. It does not apply directly to disputes involving private parties.
2. The Charter does not generally apply against corporations. It probably does not apply in favor of private corporations. In other words, a private corporation would probably not succeed in bringing an allegation that a piece of legislation was infringing a Charter right. (This is related to No. 1 above).

Limitations on Charter Rights

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Charter
3. Charter rights are subject to reasonable limitations Section 1 states rights and freedoms are subject to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society. So, although a particular legislation may infringe upon an individuals Charter right, the infringement may be deemed to be acceptable, because the infringement is considered reasonable in all the circumstances.

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Charter
4. The Charter is subject to the notwithstanding clause The government can override some rights and freedoms. An individuals Charter rights may be infringed by a particular legislation, however, the government can get away with the infringement because the government has invoked the notwithstanding clause. Note: this clause (s.33) is used very rarely. uQuebec used section 33 to enact a law that violated the Charters right to freedom of expression, to enact Bill 101, a Bill which prohibited the use of languages other than French on outdoor signs.

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Charter Remedies
section 52: Constitution as supreme law If a law is law inconsistent with Charter, it is of no force or effect. What are the remedies if a Court finds that a law is inconsistent with the Charter? Refer to Section 24: enforcement of rights and freedoms: 1) Declaration: A Court may simply declare (i.e. announce) the Charter has been violated. The legislature then must find a solution to the problem.
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Charter Remedies
2 ) Injunction: A Court may impose an injunction that requires the government to address the problem in a certain way. 3)Striking down: A Court may strike down or eliminate the statute, this may take effect immediately or may be temporarily suspended. 4)Severance, reading down or reading in: A Court may save a statute by re-writing part of it, or if only part of a statute is offensive, that part may be severed or cut out, or if a statute is written too broadly, it may be read down so that it applies only where it can be justified. In contrast, if a statute is written too narrowly, a court may read in a broader interpretation. 5.Damages A Court may award damages to aggrieved party.
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The Process: Parliament creates laws through legislation Courts identify Charter violations Parliament may respond by amending or enacting laws to conform with Charter

Charter Dialogue

Doctrine of Parliamentary Supremacy While Judges are required to interpret constitutional and statutory documents, they must also obey them. Members of Parliament are elected and accountable. Judges are appointed and unaccountable. Should ultimate authority therefore rest with parliament? How does this impact the decision of a Court to strike down, read in, or sever an offending portion of a statute?
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Legislation
laws created by Parliament or legislature
statutes, regulations, by-laws,

legislative process : Introduction of Bill, majority

support through series of readings, finalized by Royal Assent.

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Courts
The 1st source of law is the Constitution (which includes the Charter). The 2nd source of law is legislation. This is law that is created by Parliament or the Legislature. The 3rd source of law is the Courts. The Courts interpret and apply legislation and create and apply common law. Statutes often permit an entity other than Parliament or the legislature to make rules without the need to go through the entire legislative process: these regulations are subordinate legislation. i.e. Parliament created the CRTC and gave it power to regulate broadcasting in Copyright 2011 Pearson Canada Inc. Canada.

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An important type of subordinate legislation involves municipalities. The Constitution gives the provinces the power to create municipalities and when a province creates a municipality it gives that new body the authority to pass by-laws, which is a type of subordinate legislation that is created by a municipality. By-laws are used to license business, impose some sorts of taxes, plan commercial developments and regulate parking.

Courts

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The Common Law

common law
Means the legal system inherited from England
compare: civil law inherited from ancient Rome

Also refers to the law made by Judges in Court when they interpret legislation.

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Common Law and Equity

historical developments Phase I: law only one set of courts in England, rules often rigid and harsh Phase II: law and equity King of England asked Chancellor, his legal and religious advisor to act on his behalf. The Chancellor got busy and appointed others. This new court was less concerned with rigid rules and more concerned with justice, their decisions were based one quity (fairness), and the court became known as the court of equity. Phase III: fusion law and equity combined into single court so every court today is a court of law and a court of equity.
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Nature of equity traditional equity disputes resolved by conscience of king or chancellor modern equity disputes resolved by rules (essentially same as law) occasional differences remain between law and equity (e.g. damages at lawspecific performance at equity) equitys trust property held for benefit of another person trustee holds legal title to property beneficiary enjoys equitable title to property

Equity

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The End of Chapter 1

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