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Business lawLecture 1Saturday, 25 November 20178:44 pmIdeas embraced by term 'law'Law as ruleso Standards or norms which prescribe the conduct appropriate in particularcircumstanceso Law is more than just a set of rules but ultimately is prescriptive nature of lawo 'Rule' cannotes the idea of govt....

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Business law

Lecture 1 Saturday, 25 November 2017 8:44 pm

Ideas embraced by term 'law'

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Law as rules o Standards or norms which prescribe the conduct appropriate in particular circumstances o Law is more than just a set of rules but ultimately is prescriptive nature of law o 'Rule' cannotes the idea of govt. being connected etymologically (through history) with rex, king, regulus, petty king, regulo, are, to direct or regulate and hence regulation/rule so that the concept of govt is intimately bound up with the idea of law

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Law and justice o Justice means that everybody's legal rights and corresponding duties are enforced or that we all get what we deserve o Justice is a concept intimately connected with concept of law and especially with its administration and implementation o Justice and law are quite different and on occasion incompitable o As a democracy we should not tolerate unjustlaws o While law should be capable, in theory, of being objectively determined - the answer to the question of what is just or unjust much more subjective

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Law as rights o Matrix of rights and corresponding obligations for members of society o From this it follows that te application of law is to determine exact nature and extent of rights of an individual / group of individuals o A right in law cannot exist in isolation ; there must generally be a corresponding duty of obligation on the part of some other individual, group of on part of society as a whole o    o

Enrolment in this course gives you certain contractual rights Receive prescribed instruction To be assessed appropriately Have marks and grades recorded to be awarded the relevant qualification These rights imply corresponding obligations on part of university

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Law as a system o Further concept or idea which the term law encompassess it that of the system or apparat of the law, courts, judge, officials, practisioners, documents including books o It is in this sense the word is used in such phrases as a career in the law or idiomatic, and somewhat archiac expression 'ill have the law on you; o This latter may refer to informing of enforcement agencies such as police

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The study of law equated with predicting the likely outcome of a legal action - the American realists

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This is somewhat advanced topic but it is quite different way of looking at what the discipline of law comprises 'The prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law' This is not the place to examine validity or otherwise of this approach which in effect is a denial of the law as rules applied in a legal system

When is a rule a legal rule i.e. what makes a rule 'law' o Not all rules are law

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It is not enough to merely state this, on the basis of an impression, or because you just know that the Crimes Act must be law or perhaps that theft or stealing must be against the law - you need to justify your contention that the latter is law

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The justification lies within the source of the rule

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Parliament of NZ have supreme authority to make laws in NZ

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Thus we can say  A rule that has been made by an Act of the Parliament of NZ or under a power conferred by an Act of the NZ Parliament is law in NZ

The decision of judges as a source of law o NZ inherited its legal system from England, in addition to law made by parliament or under a power conferred by Parliament, law can also be made by judges in the course of deciding a case o Thus the principle that a contract is made as a result of an other by one party or parties being accepted by the other party or parties to the contract is a principle developed entirely by the courts; parliament has had little hand in it o

A principle that has been stated to be law by a judge or judges in the course of deciding a case is also part of the law of NZ

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Most of the law of tort and much of the basics of contract law have been developed by the courts in the case of tort hardly any statutory intervention. In recent times parliament has modified the common law of contract

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This view of what is law in NZ naturally raises the question of the source of the power of parliament and of the courts to make law

Law, Ethics and Morality 

Law and morality

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Jeremy Bentham, John Austin, 19th Century england Extremely critical of existing legal writing in which morals and law were not treated seperately and were confused  Austin set out to define his subject, jurisprudence as being positive law that is 'law simply and strictly so called; or law set by political superiors to political inferiors'

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In essence we are concerned with what law is , rather than what it ought to be. The statement of what the law is on a particular matter is generally clearer and less open to dispute than a statement of what law ought ot be.

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The fundamentally opposed views of sections of society on issues such as abortion, marriage between persons of same sex, euthanasia, illustrate the difficulties in this area

The ethical basis of law in a democratic society o However it is difficult for the state to enforce the law if it doesn't command general acceptance by society. o This is the corollary of the point made in opening this lecture that the decision of the courts must have general acceptance by the majority of society. o

In a democratic society it is unthinkable that the law does not in a general way conform to the accepted moral and ethical standards of at least the majority.

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The law tends to be, at least often, more conservative than the attitudes of society, the law changes but more slowly that attitudes of society. The law responds to demand for change; it can rarely initiate changes in attitudes but it might

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The fact that the law is conservative and slow to change means that sometimes the law is out of step with ethical and moral attitudes of society as a whole. In other cases there is no general agreement on what is moral or ethical and whether the law is changed often depends on what is moral or ethical and whether the law is changed often depends on who shouts the loudest rather than what is the view of the majority

Law changes via legislation require political will o In a democracy such as NZ changes in statute law or legislation are political acts. Thus the change will be made if the politicans in power velieve that this is what the people want or at least that the change will not lose votes and may gain votes for the political party or parties it supported o o o

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In many areas, especially those areas of the law with which this course is concerned the majority of society does not care one-way or the other. Amendments to the Companies Act 93 or to the law of contract do not interest the majority of the voters. As an example the changes to te minors contracts act 69, provided for in the minors contracts amendment act 2005 were not mentioned in any of the media reports on the progress of legislation The pressure for changes in these areas must come from professional groups like the real estate institute and the law society, or user groups like retailers federation and the

manufacturers association

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In others areas, such as those referred to above, the politicans must be alert to current public opinion although in some areas public opinion is not enough 1999 election 2 citizens initiated refernda were put to the public and although over 80% of the electorate voted in favour of them, little or no legislative change has resulted.

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Examples include same sex marriage

Ethics and Morals o Ethics are defined as  The science of morals; the department of study concerned with the principles of human duty o Mortality is defined as  Moral virtue; behaviour conforming to moral law or accepted moral standards, especially in relation to sexual matters; personal qualities judged to be good o o

It can be seen that the two words describe closely related ideas or concepts. In most cases the words are synonymous, i.e. they can be used interchangeably. However when talking of standards which may, or may not govern the conduct of business, the term 'ethics' is more generally used since I generally implies a system of beliefs and standards against which conduct may be measured

Internal and external ethical standards  

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Ethical standards may be internal o Do I feel good about doing this or not? Or external o What will people think if they discover I done or not done this? This distinction is not an absolute one since feeling good or bad about one's act or omission may depend in part on one's perception of society;s likely attitude.

Legal Standards  Law does not in theory depend on subjective interpretations. Whether an act or omission is or is not contrary to law may be determined objectively. While there may be room for debate as in the interpretation of legislation or the application of a legal principle to the facts, the debate may be resolved by objective criteria. 

However, there are areas where a degree of subjectivity is inevitable. In case of unconscionable bargain the court will have to decide whether there has been an overreaching, the taking of an unfair advantage which does involve an element of subjectivity on the part of the judge in relation to particular facts of the case. Here we disagree with the american realist again; they think the whole process depends on the judge's values and politics

Businesses, ethics and the law  Businesses must operate within the law. Even the most rabid supporter of the new right philosophies would agree with thie even though they may feel the law in many areas is ridiculously erstrictive when applied to business.

Are businesses required to act ethically?  Everyone would answer affirmatively but what is meant by 'acting ethically' o One view is that the sole ethical duty of business managers is to maximise profits and resulting returns to shareholders. Any act or omission that derogates from this principle is seen as unethical, if not unlawful o

It must be remembered that most business, and certainly those of any size, are managed by people who do not own the business themselves. In other words the money they are responsible forr is not theirs but ultimately belongs to the shareholders or creditors

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There is another view, quite often formulated by business ethicists or academic that says there are ethical standards beyond the mere maximising of profits to which busienss managers should adhere. Such view normally refer to the stakeholders or constituents of the business and see management as owing ethical duties to employees, customers, the community as a whole and the environment in additino to shareholders in a business. The adherents of the New Right, Free Market School vehemently deny that these stakeholders have any legitimate interest to which business managers need have regard.

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Apart from philosophical question of whether managers should have regard to these wider questions, there is the question of whether in law; managers are permitted to have regard to such matters, especially where this would mean additional expenditure or putting the funds of the organisation at risk.

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The law is clear in the case of directors of companies  A director of a company, when exercising powers or performing duties, must act in good faith and in what the director believes to be the best interests of the company

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The test is subjective i.e. it is what the director believes to be in the best interests of the company. This would permit the directors to pay bonuses or gratuities to employees since a contented work force will be more productive than a disaffected one.

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Note the law permits the directors to go beyond the direct benefit to the company. Section 132 of the companies act 1993 provides that the directors may confer benefitso n past employees and their dependants so long as the employees were not also directors of the company. This allows directors of a company which has ceased to trade to pay bonuses or other compensation to the former employees.

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The makign of donations to political parties can be justified on the basis that the election of a pro-business government will be of benefit to the company. Donations to charity,

sponsorship of sporting events and arts can all be sipported on the basis that they promote the company's image and thus increase sales. o

Companies like the Body Shop trade on the fact that their cosmetics are not tested on animals and are environmentally friendly

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Thus although the proponents of the new right may argue that the only ethical duty of a manager is to maximise profits, they nevertheless compelled to act in a way that conforms to the ethical code of their customers and potential customers in order to achieve maximum profits

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It should be noted that according to the classical view of ethics, this sort of behaviour is not ethical at all. An act is only ethical if it is performed because it is ethical. If it is performed for some material or other reward then it ceases to be an ethical act. Unfortunately people, including business operators are rarely capable of such selflessness and hence need for the sort of inducements to behave in what appears to be an ethical fashion, referred to above.

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One problem that confronts large business undertakings is how ethical is the way in which their raw materials or the products are produced - this isnt new - Cleaning Clothing  Clean clothes campaign is dedicated to improving working conditions and support the empowerment of workers in global garment and sportswear industries  Although campaign has been existent since 1989 - the problem of companies sourcing product to sell reasonably cheaply to clients in more affluent nations, by selecting suppliers without any concern for the rights of the employees who actually produce the garments, continues.

Nordic fashion brands need to tackle abuse of Syrian refugees in Turkish garment factories  The most recent issue highlighted by the campaign is the plight of cambodian workers left without jobs, income, or compensation following the closure of their factory which supplied leading european and canadian outlets.

Thursday, 1 February 2018 4:50 pm

The law derived from the decisions of judges is described as case law or precedent. What is a precedent? A precedent is something that has been done or happened in the past and which serves as a model for future conduct in that area. When lawyers say precedent they mean one of two distinct things. 1. A model document or clause which has been developed in some cases, tested in the courts and found to work. 2. A decided case which lays down a principle of law

Language of precedent. The fundamental principle Stare decisis 'The decision must stand' The principles of law laid down in earlier cases should be followed. Also connotes the need for certainty in the law.

Jones v. Sky City Auckland LTD. 

Their honours' reasoning was that in a case of 'a question statutory construction turning on the meaning of particular words and their context in a complex statute' then: o

Where the competing views have been exposed and analysed in such a case and a particular construction is reached and as in this case, is confirmed by a later decision, there will rarely be occasion to enquire into the matter again

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In this case, no clear or patent error has been demonstrated

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The decisions were not per incuriam for example where the court had not had access to an important relevant document.

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It has not been demonstrated that the construction (interpretation) preferred by the earlier courts has produced unintended consequences such as to throw real doubt on the decision

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No court in another jurisdiction has arrived at an opposite result on similar legislation

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To the extent that it is suggested that the construction preferred by the earlier courts does not reflect the intention of the legislature, it may not be noted that parliament could have, but has not, moved to amend the legislation.

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In other words, no basis has been demonstrated for the reconsideration of the earlier decisions

Do judges make law? The 2 extreme positions. Yes - if the law based on precedent produces an unjust result - the law should be changed "A conutrry whose admin of justice did not afford redress in a case of the present description would not be in a state of civilisation" Per Knight-Bruse LJ in Slim v Croucher (1860) 29 LJ Ch 273

Quoted with approval by Lord Denning in Candler v Crane Christmas & Co (1951) 1 All ER 426

The opposite POV would be No - the role of the judge is to declare what the law is; Fiat Justitia ruat caelum "The first duty of a court is to administer justice according to law" Stephens J viro v. The Queen (1978) 141 CLR 88 at 129 Reform of the law is the task of Parliament not that of judges Viscount Simonds in Scruttons v Midland Silicones (1962) 1 All ER 1

Cessante ratione cessat ipsa lex 'If the reason for a law cease to be valid, then let the law itself cease' Ipfill v Wright [1911] 1 KB 506 Ratio decidendi 'The reason for the decision' The principle of law on which the decision in the case was based. The part of the decision that is binding on lower courts or on the court itself. 'in my opinion the doctrine of precedent only involves this; that when a case has been decided in a court it is only the legal principle or principles on which that court has so decided that bind courts of concurrent or lower jurisdictions and require them to follow and adopt them when they are relevant to the decision in later cases before those courts" Per May LJ Ashville Investments Ltd v Elmer Contractors Ltd [1998] 2 All ER 577, 582

Not every single principle of law referred by a judge in the course of a judgement forms the basis of the eventual decision. Obiter dicta 'things said by the way' Statements of legal principle which were not required for the decision - persuasive only. Hedley Byrne v Heller and partners [1964] AC 465 (HC); [1963] 2 All ER 575 Binding and persuasive precedents.

Following and not following. 'followed' or 'applied' Means that the precedent was regarded as correct

'Not followed'  May mean that the earlier precedent was considered to have been wrongly decided  Or that the facts in earlier case were materially different

Overruling.  

A superior court declares that an earlier case was wrongly decided. The earlier case loses its authority but the result of the earlier case remains unchanged.

Reversing On appeal from a lower court the appellate court allows the appeal. The ratio of the lower court loses its authority and the decision is reversed

Distinguishing. By identifying a difference in the material facts, a judge can avoid following a binding precedent that s/he does not wish to follow

Material Facts. These are facts that bear directly on the decision A difference in the material facts could lead to a different decision.

The Ra...