Lecture notes - Introduction to Business Law - complete PDF

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Introduction to Business Law - complete...

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Comm 304 Notes January 7 - Law o Rules and regulations - Current 2014 law comes from two sources o Statues  Act, code, legislation, government laws, enactments by law o Common law  Precedent, judge made laws, stare decisis (latin)  Previous court decisions - Ignorance of the law is no excuse o You can’t say “I didn’t know” o The system could otherwise not function - Quick summary o Statute  Skeleton to the rules and regulations o Common law  Flesh to the skeleton, using interpretations and precedents - Mental cruelty o Conduct/putting a person in a situation that a normal person would find offensive - Grounds for divorce o Mental breakdown o Mental cruelty o Treats badly January 14 - Administrative tribunal o Tribunal created by a specific statute to carry out the objectives of that specific statute o Ex. A highway traffic board, liquor licensing board, workers comp board, health regions, school boards, gaming commission, human rights, U of S board of governors - Quasi-judicial o Grey area, not administrative and not judicial o Most serious thing they can do is take license away o Cannot put anyone in prison - Justice of the peace o Role has been considerably diminished

o Most often an elderly individual appointed by the government o Take oaths and deal with many administrative functions

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o Was a time when they dealt with criminal matters o A very important role that the JP plays today is that if you just arrested and you want to get out right away, phone the JP o Saskatoon and other major centres have 24 hour JPs available Jurisdiction of provincial court o 97% of criminal law o All preliminary hearings o Civil claims up to $20000 o All quasi criminal cases Criminal law o Relationship between state and individual o When the crown has a claim against me, no person has to prove themselves innocent. The onus rests upon the crown to prove me guilty upon all reasonable doubt. o Ex. John Brown -> Plaintiff  Sues lawyer -> defendant Civil law o Individual and individual o Balance of probabilities o Judge hears all evidence o Beyond a moral certainty o Judges asks themselves if the plaintiffs claim is a valid claim Most criminal cases are dealt within provincial court Criminal law o Summary conviction  Less serious  Some penalties fixed  Provincial court has absolute  Ex. Theft under $5000, impaired driving, minor sexual offenses o Indictable offense  More serious  Ex. Assault with a weapon, serious sexual assault, fraud (large amount), armed robbery, breaking and entering, criminal negligence, manslaughter o Information -> legal document that sets out the charge of an individual regardless of whether it is a summary conviction or indictable offense

Most often filled out by the police. Police has to swear the truth of the document which is usually done in front of a JP In Canada we have murder 1 and murder 2 o Murder 1  You can apply for parole after 25 years  Pre-meditated o murder 2  Apply for parole after 10 years  Not pre-meditated Cops can only enter a home with a search warrant or during a chase (your home is your castle, no one has a right to invade your privacy) Right of election o Very serious offenses, you are given a choice of whether to be tried o A procedure must take place called a preliminary hearing o Purpose of preliminary hearing  To provide accused persons the right to hear all the witness’ evidence against said accused person  Allows the accused to question all witnesses (called cross examination)  Gives the accused’s lawyer a chance to see how witness’s will stand up in court and act during cross examination o Accused under no obligation to call any witnesses during preliminary hearing o Prosecution must open up and show al witnesses (nothing to hide) o Not a trial: judge decides if there is sufficient evidence against accused to send them to Queen’s Bench o If there is sufficient evidence, accused will be committed to stand trial o If not sufficient evidence, accused is discharged o The onus rests upon the court to prove guilty upon all reasonable doubt, must be resolved in favor of the crown Cost claims court (also known as small claims court) o Don’t necessarily need a lawyer o Fine claim, summons issued, served on person you’re suing 

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If trial takes place in front of judge alone it is the exact same place as taking place in front of provincial court When the accused is to stand in front of the judge and jury, a different procedure takes place o Jury listens to evidence and makes a decision based on what the judge says the law is

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Who sits on a jury o 12 reasonable people Divorce (court of Queen’s bench (family law division)) o Annulment of marriage o Maintenance  Spousal relationship other than marriage (family maintenance act)  Ex. Custody issues -> what is in the best interest of the children  Multiple factors taken into consideration o Custody o Access o Adoption  Two types  On agreement between mother and adopting parents is one o Filiation (paternity)  Naming the father of children who are born of un-wed mothers o Apprehension  Deals with neglected children  Children can be neglected in many ways: education, nutrition, environment o Matrimonial property A spousal relationship refers to two lawfully married husband and wife o Also refers to two persons regardless of sex, cohabitating continuously for a period of 24 months Defining cohabitating continuously o Arrangements concerning shelter o Domestic services o Social activities o Financial affairs o Arrangements concerning children o Personal behaviour (intimacy)  Not every factor has to be present but that is what is looked for Judge can make three decisions (childrens law act) o Leave children with parents o Temporary order of apprehension -> overcome neglect o Permanent order of apprehension -> take children away from parent(s) Family property act

o Everything wife and husband have/own goes into common fund. Presumption to equal possession of assets. January 21 - Contact o An agreement between two or more capable persons for a legal consideration to do or not to do some lawful and genuinely intended act  Creates rights and obligations between parties  Forms the type of society that is an orderly law abiding society - Five essential elements of a contract o Capable persons and capacity of parties o Agreement = mutual agreement o Genuine intention o Legal consideration o Lawful subject matter  Each of these points has to present for there to be a contractual relationship. If any of these elements are missing, there is no contractual relationship.  Writing is not a requirement for a contract  Many different forms of contract -> verbal, implied, letters, writing, formal - 1) capacity of contract o Everyone has legal capacity to contract, however there are certain categories we have to take a closer look at  Infant: a contract made by an infant is void (null/repudiated) or voidable (either be repudiated or enforced) at the option of the infant (unless it is a contract for necessaries)  Any person under the age of 18 years is an infant at law o Once you turn 18, you reach the age of majority  Civil law  Criminal law o Not an adult for criminal law purposes until the age of 18 (used to be 14)  If a person is under the age of 12, they cannot be charged with an offense  Ex. Given a set of facts and attempting to apply the law  Sept 2013 – 17 year old enrolled in university  Nov 2013 – 10th Monday, offers $5000 for a car, gives deposit of $500, be back on Friday to pay the rest  Buys the car on Friday

Jan 2014 – goes back to the car lot to undo the deal o Joe wont give money back o Kid is now suing for his money back o What are his rights?  The infant returned the car and is entitled to his money back  He put a deposit on the car and Joe said it for $2000. The kid wants the $5000 plus the $2000 profit (yes he in entitled)  How long does an infant have to repediate a contract? o They can do it until they reach the age of majority (18) and thereafter for a reasonable amount of time  Ex. 6 year old throws a rock at your eye and as a result you lose your vision. Can you do anything about it? Are parents legally responsible for the wrong doings of their children? o No parents are not civilly responsible for the wrong doings of their children  One except, if parent is in direct control of their children and that parent knows that child has a propensity to commit a wrongful act then the parent could be held liable  It is presumed in law that an infant does not always have the capacity o The superior person (parent) could potentially brainwash/influence  Necessaries -> includes the necessities of life and goes beyond o Befitting the infant’s situation in life. Those things that an infant is accustomed to  If an infant who comes from an impoverished background, their befitting will be different from an infant who comes from a wealthy background o anything purchased to accommodate our life is a necessary at law  ex. Student loans mentally handicapped 

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is liable for necessaries, not liable for non-necessaries to be not liable they would have to prove you know it (infant or mentally handicapped) o ought you to have known it o a witness may be necessary intoxicated drug/alcohol  at the time of entering the contract a person claims to be intoxicated, they are not liable. If they can in fact prove their intoxicated state, and the other person ought to have known their Alien  Has full capacity to contract the same as a Canadian citizen  Enemy alien o A contract made by an enemy is unlawful and illegal  A contract made by an alien is perfectly valid  If an alien makes a contract and then becomes enemy alien, after the contract is made the contract becomes suspended Spouse  Spouses can only bind one another to contracts where there has been holding out in the past of an obligation to pay  When she charges a bill to husband, he has an obligation to pay  He has an obligation to pay until he notifies the store because he has paid them before  Until that holding out is renounced, the husband must pay  Children -> agents of necessity of the parents Capacity of corporation to contract  What are they? What are the advantages/disadvantages o Sole proprietorship o Partnership  

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o Corporation January 28 - A corporation must conclude its name with one of these words o Corporation o Company limited

o Co. Ltd o Incorporated

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o Inc. o Limited Business o An association with a view toward making a profit Sole proprietorship o If any profits that one person enjoys all the profits. If there are any losses, that one person will endure all the losses o All income falls into the same income tax o That one person makes all decisions o Simplest form of carrying a business o Their personal name must be recognized with the company name o One person owns the entirety of the business Partnership o Two or more persons carry on a business in common with a view toward the sharing of profit and loss o Known as a firm (SP and corporation are not) o Dangerous ship to sail in o A partnership is related to an area of law called law of agency o Master and servant  Relates to three things  Employers -> employee relationship  Owner -> independent contractor  The principle -> agent (whenever one person acts upon the behalf of another. When one person appoints another) o Agent is someone who acts upon the principle o A relationship of Uberia Fidei (fiduciary relationship) (of utmost faith) o Agent must always act in best interest of principle o The agent must not withhold any information o Joint and several liability  This is what makes a partnership a dangerous ship to sail in  together liable  individually liable  they are all bound by the action of the other partner o LLP  Limited liability partnership

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Applies only if one of the partners is negligent in what they are doing, and result in a loss to the client. The injured person can only go after the one that caused the liability if there is a claim against a partnership, their assets are at stake (liabilities in a partnership are personal) a partnership can end  upon the death of one of the partners  one of the partners goes into bankruptcy  any partner can declare the partnership finish, it then becomes a matter of dividing assets law of partnership is very similar through Canada and USA Salary is NOT available to partners in the partnership. What they receive is a drawing There is a predetermined formula for what the partnership would be worth is one partner wishes to retire Quite often a partnership agreement is accompanied by a buy-sellagreement  Outlining the right to buy and sell shares in the partnership If one partner dies, there is often insurance money that can be used to buy that share in the partnership A partner has no legal status  Descriptive names  Ace Holdings  Ace and Company A partnership is a personal thing If you are an employee of the partnership and the partners want to put your name on the letterhead that would be a dangerous position for you. The law would deem you to be a partner even if you are not. As far as the public is concerned, there has been a holding out that you are a partner. Limited partnership (silent partner)  Must be registered under the provincial partnership act as a limited partner  Usually just invests money in partnership, and MUST NOT involve his or herself in the partnership business (ex. No attending meetings, no names on letterhead)  Hopes to make profit on investment

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If there is a claim against the partnership, the limited partner is not involved Advantages  Inexpensive made of association  The income you earn in added to income you already have, no extra tax returns Disadvantages  Personal liability  Fiduciary relationship

Corporations o Individual person (millions of cells)  No one can own this person o Corporate person (thousands of shares)  Comes from the latin word corpus (English corpse)  Autre vie (another life)  Artificially created person  Law refers to this person as a legal entity  You cannot own a corporation but you can own shares in it o Person can come into existence by  Articles of association  Private corporation  Public corporation o Has to go on document for registering a corporation  Initial subscribers and directions  Where is the head office  Share structure  Preferred  Common – no par value (we don’t give fixed value to the share)  Common shareholders will elect board of directors o Preferred sharholders  May not carry voting rights  Pay annual dividend (dividends must be declared) o Canada business corporations act  When do we choose to set up under the provincial vs. federal  If in Saskatchewan -> go provincial  If you want to expand to Alberta after that you could reincorporate through the extra provisional corporation

o A corporation can not conduct business unless it is registered in the province in which it wishes to conduct business o Two corporations cannot use the same name o Bylaws  Make provisions for the shareholders of directors  Contain certain limitations on the right of directors  A corporation has full capacity to contract unless restricted or limited by its bylaws or articles of association o Certificate of incorporation  From the day it is signed it is in effect o Authorized share capital  The amount of shares a corporation is given o Promissory note  A signed document containing a written promise to pay a stated sum to a specified person or the bearer at a specified date or upon demand o Debenture  A claim against all the assets of a corporation  Floating charge (black cloud hanging there)  you don’t have to go to court to enforce debentures o 1896 Solomon vs Solomon  Case in England about shoes o Oldest corporation in Canada -> Hudson Bay Company  Incorporated in 1670 o Haw to file its own income tax returns o Possibility of personal liability in corporation o How to kill a corporation  Don’t renew the annual license  Dissolve it  Bankruptcy Feb 4 - 2) mutual agreement o Offer – definite o Acceptance  Unconditional  Communicated  Manner  Time

o In order or an offer to be lawful it must be definite  Ex. I hereby offer to purchase your car for $10,000  Ex. When the Bay said they won’t sell the man the jacket, that is allowed o In law it is always the consumer making the offer and it is up to the retailer to accept or reject that offer o Invitation to treat  You the consumer are invited to make an offer and it is up to the retailer to accept or reject that offer o Acceptance has four requirements  Unconditional  You accept the offer without making any material change to the offer  Conditional acceptance (counter offer) -> opposite of unconditional (makes change to offer, if not accepted offer is void) o Once you make a counter offer it rejects any prior requirements of the offer  Communicated  The person who made the offer is the person who communicated it  An offer can be withdrawn at any time before it is accepted. An offer, once accepted, cannot be withdrawn.  Ex. Farmer examples o FA  Offer made Feb 1/13  Offer to sell land  $300,000  Possession May 1/13  Offer open for acceptance until April 30/13 o The offer shall be irrevocable farmer a and b signed o FA wants to take his offer back, what is the legal position of the parties  He can withdraw his offer due to the word “irrevocable” means absolutely nothing  If FB would have accepted the offer, he would have mutual agreement. If FA tried

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to withdraw, he would suffer the consequences of breech of contract o Option to purchase  FA -> offers FB the exclusive right to purchase the land for $300,000 possession may 1/13 open for acceptance april 30/13 provided you pay FA $5000 for exclusive Assignment of agreement -> type of contract when you sell to someone The communication of acceptance must be made in the manor instructed by the offer ex) phone, fax, email If there is no manor stipulated for acceptance than accept in same way the offer was made

Time  Communication must be made in the time frame of the offer. If no time is stipulated communication must be made within a reasonable amount of time o Reasonable time = depends on the nature of the goods and the situations. Contingent of the circumstances  Ex. MFB inc. Saskatoon o May 1/13 by letter offers to sell truck load of goods to Browns MFB in Regina for $100,000 o Letter arrived may 2 at 10am o May 2 -> 5:10 letter went in mail saying offer accepted o May 2 K inc in Winnipeg at 1:30pm phones Saskatoon asking if they have any goods. Saskatoon tells about truck load. Offer and acceptance are both made. Goods are now on way to Winnipeg. o Saskatoon then sends email to Browns saying offer is withdrawn at 5:30pm on May 2 o Acceptance means communication to person making the offer o At 5:10pm May 2 the letter then belonged to Jones. The moment a letter is posted, communication of acceptance takes place  Postal acceptance rule

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o Provides communication of acceptance takes place as soon as the letter is posted Electronic acceptance o Personal info privacy and electronic document act… if you designate the electronic method and I use it, the moment the document enters the system and it is capable of being retrieved and procured that recipient is in receipt of that offer o If you did not designate, then you become aware of the offer once you have retrieved it The offer to the public at large -> an example of this is a reward. You accept the offer by providing the information that is outlined in the offer.

3) genuine intention o Misrepresentation  Fraud -> cheat, dishonesty  Innocent -> without knowledge o Under influ...