Ch.1 note - ch1 textbook summary - Canadian Business and the Law PDF

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Ch.1 Knowledge of Law as a Business Asset Business law in Practice Story: Lionel Garfield-> decided to go into the chicken processing business by himself Jumped at the opportunity purchase the business- buildings and equipment 1. List: rebrand the operation (new name); Chelsea Chickens-> distinctive business name to boot 2. Advertise in the industry under the name “Chelsea Chickens”- 간판, website,related office supplies 3. Received increase number of orders for broiler (male meat) chicken 4. Suddenly went downhill a. In northern Canada Chelsee Eggs and Poultry Ltd demanded Lionel stodp doing under the name of “Chelsea Chickens”-> misldeading customers into thinking that Chelsea Chickens associated with them. (re-doing website, sign) b. Client of Lionel’s business is angry becuz failed to deliver an order of processed chicken .-> breach of contract-> Lionel concluded that the deficiency was not his fault. (he had done every possible things) c. Potential customer was touring Lionel’s production facility but she slipped and fell on the freshly mopped floor in the holding barn-> customer suffered concussion(뇌진탕) and will be off work for 6 months.

d. About 100 chickens froze to death when transported on a flatbed trailer about 2 hrs away in very cold conditions. -> charged under the Health of Animals Act causing undue(지나친, 과도한) suffering to birds.

The law impacts virtually every aspect of society, including the business environment-> affects most business decisions. Ex) Lionel starts his business, he will be involved in a number of transactions and events with significant legal implications. He needs to decide whether to form a corporation, operate as a sole proprietor, or find partners. Also need to do financing decisions All of these decisions have legal aspects. By understanding the role of law in the multitude of business decisions that entrepreneur can maximize the protection that the law extends while avoiding its pitfalls. Knowledge of the law is a business asset that can assist owners and managers in reaching their goals and objectives. Because the BUSINESS LAW (;A set of established rules governing commercial relationships, including the enforcement of rights) -

Defines general rule of commerce

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Protects business ideas and more tangible forms of property

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Provides mechanisms that permit businesspeople to select their desired degree of participation and exposure to risk in business venture.

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Seeks to ensure(보장하다) that losses are borne by those who are responsible for then

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Facilitates planning by ensuring compliance(준수) with commitment(약속)

Lack of knowledge may result in failure to maximize opportunities or in losing out on them altogether. They might be fined, forced to pay penalties, closed down altogether.

International Perspective (Canadian craft brewery changes name in Light of possible trademark infringement) -

Ward opened a craft brewery “Gray Stone Brewing”

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Got a call from Sone Brewing Co. and said the name and logo of Gray Stone Brewery infringed on Stone Brewing Co’s trademark (;A word, symbol, design or any combination of these used to distinguish a person’s products or services from those of others).

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When someone infringes another’s trademark, the important concern is that public will be confused to think there is an association.

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Suggestions: - Change name to Graystone Brewing-> costs for sinage,logos (including on beer cans), legal documents, all merchandise

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Ward learns a lesion in the importance of managing legal risks proactively (사전에).

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Globalization and internationalization of business means that the actions of a small brewery may well infringe on the rights of a very much larger corporation 1000km away.

Law (; the set of rules and principles guiding conduct in society), primarily by 1. protecting persons and their property, 2. facilitating personal and commercial interactions, and 3. providing mechanisms for dispute resolution. Protecting Persons and Their Property -

Most familiar purpose of the law: provide protecton

o Ex) breaking into another person’s house, assaulting someone- are subject to criminal sanctions. o Legal obligation-> businesses are required to adequately protect their customers’ personal information under PIPEDA (personal Information Protection and Electronic Documents Act). PIPEDA is legislation passed by the federal government. Goal: regulate how the private business sector collects, uses, discloses personal information (; uniquely and directly connected to one person) from its customer. Ex) age, name, ID numbers, income, etc.

People who believe their privacy has been breached under PIPEDA may make a complaint to Privacy Commissioner (independent from government). BUSINESS AND LEGISLATION -

Breaches of privacy under PIPEDA includes a broad range of activity. It can be trifling (가 볍고) and largely inoffensive (악의 없음). Ex) 1. Gym member complained because the employer said his employer how often he used his gym membership. 2. Privacy Commissioner determined that the complaint was well founded because the the gym disclosed his personal information without his permission. 3. He sued the gym seeking $85000 in damages, BUT the court refused because it did not cause any injury or loss.

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Some breaches of privacy are more offensive and cause distress anxiety, or embarrassment in their victims. Ex) 1. A woman recently given birth in a hospitals’ maternity information (name, contact information, and dates of hospital vists) were handed over RESP company in exchange for money. 2. The Privacy Commissioner determined that the complaint was well founded because personal information had been exposed and recommended changes to the RESP company procedures. 3. $400 million being pursued against the hospital over 8000 patients. 4. Two employees involved in privacy breach guilty to criminal charges. They were sentenced to 3 months house arrest, 2 years’ probation, 340 hours community service.

The law offers protection in 2 related ways 1. Sets rules to safeguard interests 2. Sets penalties and other consequences for breach of those rules to ensure accountability and encourage future compliance. Ex) (Breach of contract; failure to comply with a contractual promise) Lionel, and those with whom he deals, are obliged and abide by the law on a variety of fronts, since failure to comply can have severe consequences, including financial penalties and legal prosecution. ETHICAL CONSIDERATIONS (Maple Lodge Farm’s Conviction)

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One of the largest chicken producer in Canada was sentenced for violating “Health of Animals”-> inhumanely transported chicken, many died from exposure to cold weather.

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25340 chickens dies inhumanely, court fine Maple Lodge Farms $80000 and probation for 3 years.

BUSINESS AND LEGISLATION (Regulating Recreational Drones) -

Recreational drones are posing increasing concerns, both privacy and safety fronts. Ex)-1. Vancouver resident reports the drone camera was pointing directly at him through the 36th floor condo window 2.Former astronaut said he is afraid that a drone would hit a plane and result massive accident.

- Federal government made rules for drone and if individual violates the rules fines of up to $3000. Facilitating interactions Ex) marriage, adoption, disposal of property upon the owner’s death The law of contract provides a way for parties to enter into binding agreements, thereby creating a measure of security and certainty in their business operations.

Contract law (; rules that make agreements binding and, therefore facilitate planning and the enforcement of expectations) allows business enterprises to plan for the future and to enforce their expectations.

Legal rules provide definition and context to doing business.-> Ex) Contract law allows Lionel to accomplish this end by providing a mechanism through which Lionel and the supplier can describe their commitments to each other. The creation of certainty in business relationships is one of the most important contributions that law can make to the commercial arena. No contract can recite and provide for all contingencies ( 만일의 사태), there will be some issues but most parties find ways to overcoming the omission themselves. There is no good reason to risk this relationship and devote resources to litigation (; The process involved when one person sues another).

Providing Mechanisms for Dispute Resolution -

Conflict can resolved outside the formal legal system depends on the circumstances

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Maintain a good business relationship with the party in breach is often more important than proving yourself to be right in a court of law.

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Parties to try to come to a resolution between themselves and if does not work, o legal system offers 

mediation (; A process through which the parties to a dispute endeavor to reach a resolution with the assistance of a neutral person) and

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arbitration (; A process through which a neutral party makes a decision that resolves a dispute) as ways of avoiding litigation.

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Essential to a workable business environment that the last-resort solution provided by litigation process be available to the disputant.

o The liability (; Legal responsibility for the event or loss that has occurred) can be established. How and Why the Law Works -

Canadian legal system demands that both the process for determining liability and the rules or laws that are applied in that process are impartial, fair, and free from bias. o Ex) A judge can never be fully impartial because she arrives in court with her own personal background-> these differences can be very helpful in advancing the development of law in a healthy way.

Knowledge of the Law as a Business Asset -

An effective way to avoid Lionel’s mistakes is to implement a legal risk management plan (; A comprehensive action plan for dealing with the legal risks involved in operating a business)-> identify the legal risks-> implementing concrete measures  identify and plan for risks before they occur

Law and Business Ethics Business ethics (; Moral principles and values that seek to determine right and wrong in the business world) provide an increasingly important overlay. o Requires entrepreneurs to conform to principles of commercial morality, fairness, and honesty. ETHICAL CONSIDERATIONS (UBER) -

There are some rules for taxicab to operate legally.

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Uber’s business model is constructed on taxi regulations because it’s not a cab company but a transportation service company. -> lower costs...