BU231 - Fall 2012 Final Slides

7/26/2019 BU231 - Fall 2012 Final Slides

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BU231 EXAM AID

Tutors: Prasana DevanandCo-ordinator: Rachel Mahal

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Laurier SOS raised over $15 000 last year to

build a primary school in Cero del Padre,Nicaragua. This could not have been done

without generous donations like yours.

Kevin and James are the sons of the

community leader, Jose Domingo. They

became like brothers to the volunteers whoparticipated on this outreach trip.

The affection among their whole family was

inspiring and made the volunteers feel more

than welcome, like they too were part of thecommunity. Laura & Charlie, SOS

Outreach volunteers, 2011

Contact: [email protected] more information about these amazing outreach

opportunities!


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Agenda

Chapters:

15,17,18,24,25,26,27,31 & 32.

Review of concepts, translation fromlegal terms and examples.

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BU231 Chapters 14 and 15


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Breach of Contract

Sometimes it can discharge a contract however a breachmust be of the entire contract or an entire term of acontract which makes performance inadequate

Essential terms are known as conditions

Non-essential terms are known as warranties There are a few types of breaches

Minor: Non-essential term of a contract. It could be a breach of amajor term but of a minor aspect

They can sue but they still have to finish/act out the contract

Major: Breach of the whole contract or an essential term of thecontract where the essential point of the contract is defeated

Non breaching party has the option to 1) Discharge or 2)Continue to bind both parties to the contract


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How a Breach May Occur?

A party to a contract may break it by:

Expressly repudiating its liabilities

I am telling you up front that I cannot perform

Option to non-breaching party: A fine, but they reserve theright to sue OR they can insist on performance and wait till it

comes due They run the risk of an intervening event and losingthe right to sue. It depends on the remedy sought Acting in a way that makes its promise impossible to perform Failing to perform at all, or tendering inadequate performance of

its promise

Whenever breach occurs before time agreed forperformance, it is known as anticipatory breach Can use immediately and does not need to waitfor performance to be due


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How a Breach May Occur?

Party Renders Performance Impossible: Adeliberate or negligent act that makesperformance impossible amounts to repudiation;

Rather than words in express repudiation this is often implied byconduct, such as a form of self-induced frustration

Only a willful or negligent act of the promisorconstitutes a breach of contract, doesnt include

acts that are beyond their control


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Failure of Performance

Usually becomes apparent only when the time forperformance arrives or during performance itself

Doctrine of Substantial Performance / Test forseriousness of breach

States that a promisor is entitled to enforce a contract when it hasbeen substantially performed, even though its promise doesntcomply in some minor way with requirements

Promisors claim is subject to a reduction for damages caused by itsdefective performance

Effect is that a promisor cant seize upon a trivial failure to avoid itsown obligations

For example, when building a house You broke the contract byputting on the wrong shuttersdoesnt entitle you not to payfor the whole house


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Failure of Performance

When the Right to treat a Contract asDischarged is lost

Two situations where an aggrieved party is entitled only to damages:

1) Aggrieved party has elected to proceed with the originalcontract and accept benefits from it despite the breach

2) Aggrieved party may have received benefits and not learned ofthe breach until performance was complete

Possible Criminal Consequences of Breachoccur whenparties break the contract with knowledge that theirbreach will endanger human life, expose valuableproperty, etc.


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(cont)

Exemption Clauses

A clause in a contract that exempts a party fromliability for failing to perform some of all of itscontractual obligations

Firm may insists on an exemption clause, excludingitself from any liability for the risk and transferringthe risk of harm to its customer

Courts have developed techniques to cut down theadvantage of parties drafting exemption clausesNeed to post adequate notice

Strict interpretationsFundamental Breach


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Types of Remedies**

1)

Damages: Primary remedy in contracts

The purpose of an award of damages

Mitigation of Damages

Prerequisites for an Award of Damages


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(cont)

2) Equitable Remedies: Sometimes common law remediesare just not good enough

Equitable remedies are discretionary (must fulfill these

criteria)

Damages are inadequate

Plaintiff must come to court with clean hands

If plaintiff delays unreasonably, court will deny equitableremedy

No innocent third party involved

Will not grant remedy when plaintiff has not paid substantialconsideration for defendants promise (if its seal, you onlyreceive damages)


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(cont)

Specific Performance

Order requiring a defendant to do a specified act, usually tocomplete a transaction

Injunction

Court order restraining a party from acting in a particular manner,such as committing a breach of contract (Also known as a negativecovenant

Interlocutary Injunction: Temporary restraining order

Injunction against an Employee

Mandamus: Opposite of injunction such as apologize

Declaration: A public declaration to demonstrate to thepublic youre right Rescission: Restoring parties to the positions they would

have been before they entered a contract


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Chapter 17


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Def: Transfer of possession of personal property ONLY (notincluding land but can include documents (notes, bonds, stocks,etc.)) without a transfer of ownership

Transferor / owner of property is the bailor Still havepossession, and that the item will go back in the hands ofthe bailor eventually

Party that receives custody is the bailee

Can be contractual or non-contractual, contractual and

involuntary

Bailment


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Benefit of Bailment

A gratuitous bailmentmay benefit both parties such aswhen a car is left with a friend for safekeeping, but the

friend has permission to use it occasionally A bailment for valuecan go both ways as well such as

when a car dealership gives you a car to play with for aweekend (and hopefully buy) so you can enjoy it

Bailment


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The baileehas a duty of care to take care of thepossession

In contract often the terms (express or implied) outlinethe duties and liabilities of the bailee

Exemption clauses written into contracts for liability ofbailees are construed very strictly by the court

If goods are damaged for any reason not related toperformance related to the contract, bailee is notprotected by the exemption clause

The standard of care required by the law of tortsapplies in circumstances not covered expressly orimpliedly by the bailment contract

Liability Under Contract andTort


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Law of bailment places the burden on bailee of showingthey were not negligent, must offer a reasonablealternative explanation (reverse onus) Easier to sue in bailment vs. tort

Eg. You send your car in for repairs and it gets blown upthere, you need only establish the condition of the carwhen you dropped it off, and the condition it was in whenyou received it

(cont)


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A sub-bailee is when a bailee gives the objects toanother person Eg. Lady took her ring to a jewelry store in Sault-Ste

Marie. Jeweler was unable to do the repair on the ring

and gave it to another jeweler in Toronto. The ring wasvalued at $11,000. When the ring was courier, the customof the trade was to list the value as $100. The lady suedeveryone. As bailees (Sub or regular), they all owed aduty to the lady.

(cont)


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Gratuitous bailment for benefit of Bailor

Lowest standard of care is owed on the gratuitous benefitwhere the benefit is to the bailor (Not being paid for the favour No benefit to you, just the bailor)

Bailee should not be under a particularly high duty towardsbailor because the bailee is doing a favour for bailor

Eg. Can I put my car in your garage for the winter?

Gratuitous bailment for benefit of Bailee Bailor receives no consideration, thus the bailee should

compensate the bailor when damage occurs to goods as resultof any slight carelessness

Eg. Can I borrow your lawnmower?

Standard of Care


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Bailment for Value Contractual bailment Standardfails between gratuitous bailment for the bailor andbailee

Falls between the two above where the bailee for value isexpected to take the same care of goods as a prudent and

diligent person should take care of goods Eg. My car will be at your shop while you service it

**Standard of care is higher if product is very valuable, easily stolenand easily damaged**

Standard of Care


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Repair and Storage Liens Act

Liensgive the bailee a right to retain possession ofgoods until the bailor pays what is due for the services

Allows the bailee to retain possession until the bailorpays the price requires.

If they obtain the goods back lawfully without fraud,the right of lien is lost. The rights of possession muststill be in the bailee

Arises only when the service has already been performed andpayment is past-due

Liens


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There is no common law right of sale The only way toget this right is when its under the statue or youcontract for it

For a gratuitous situation, you cannotget the right ofsale

Bailees now have a statutory right to sell the goods Certain time needs to elapse after payment is due (Notice is

set-out Pay up or we are going to exercise our right to sale)

Advance notice must be given to bailor of the intention to sell

Sale must be advertised or held by public auction

Note: The proceeds of the sale first go to reimbursebailee for costs of sale, then the overdue charges, anyin excess goes back to original bailor

Right of Sale (Still in the Liens)


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1)

Storage and Safekeeping Standard of care depends on the circumstances in the contract

but the owner is still required to exercise due care of the goods

Not required to insure unless it is listed in the contract butnormally, insurance sits on the bailor unless the bailor wasnegligent

Not customarily obliged to insure goods against fire, but whenexpressly contracted to do so and they fail, they owe the bailorthe insured value of the goods

Warehouse owners in Canada have a lien on goods, and may sellby public auction

However for professional storages, they have the right of lienbut the lien must be put it in the contract

Special Types of Bailment - STIR


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2) Repairers They are required to effect the repair in proper

manners and expect a due care (It is seen as aprofessional because you are paying for it and peopleare relying on it)

Failure to performance = Breach of contract Bailor is entitled to get back the goods, might not have to pay

for service done and can use for damages

Standard of care is same for warehouse

Ordinarily, a bailor gives repairers implied authority toorder replacement parts unless stipulated in contract

Common law gives the repairers a lien on goods, someprovinces do not allow for sale, but in Ontario, theyallow sale if payment is three months overdue

(cont)


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3) Transportation Gratuitous Carrier Help Andrew move down the street

Private Carrier Move a specific kind of thing and theydont do it all the time, reserve the right to choose their

clients

Common Carrier Move anything anywhere Anyone thatholds themselves out to public as a carrier to get rewardsor payment Holds the highest standard of care: They arean insurer and a bailee. They indemnify the customers

regardless of fault

All three have a duty of care, even the gratuitous care andmust reach the standard of a reasonable person. They mustbe competent and diligent in their line of business

(cont)


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3) Transportation (Cont)

Liability: Shipper (Bailor) need only prove that the carrier received the

goods in condition, and delivered them in bad condition. Unlessotherwise agreed, common carriers are liable for the full valueof the good

Thus, the burden is on the carrier to establish cause of losswithin a recognized defence

Defences against liability: Act of God Fire is not an act of god, unless lightning started

Cannot work as a defense if the carrier took the risk knownabout the potential damage it may cause

Inherent Vice in the Goods Something is wrong with the goodsitself

Default by Shipper Contract contains implied promise that the goods are safe to

carry, thus make the movers pack everything themselves --Implied duty on the shipper that the goods must be safe fortransportation

(cont)


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4) Innkeepers

Innkeepersare any people who maintain aestablishment offering lodging to any member of thepublic As long as you can pay, you can stay there

Must keep the belongings of their guests and patronssafe. They have duty to take reasonable care of theguests belongings They must avoid negligent acts ofthemselves and their employees from suffering fromlost or thief

(cont)


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4) Innkeepers (cont)

The Innkeepers Act limits their liability to $40 andthey must illustrate that they make a contractualagreement with the guests listing the liability to $40

If a customer specifically states that they would wantsomething to safe-keeping, they are fully liable BUTthey are free from liability if they can prove that it wasthe negligence of the guests for their loss

(cont)


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Liability: Innkeepers are typically only liable where the goods have

been stolen, lost or injured through the willful act,default, or neglect of the innkeeper or an employee, orwhere goods have been deposited expressly for

safekeeping

If a hotel refuses to accept a guests goods for safe custodythen it loses the benefit of reduced liability

Burden is on hotel guest (bailor) to demonstratecarelessness of employees

Often less responsible for damages, therefore it is betterto have something stolen than damaged

Only have a lien, some provinces can sell goods Ifthere is no payment, they can take the customersgoods and sell them.

(cont)


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Pawnis a bailment of personal property for securityfor a repayment for a loan where the possession istransferred to the creditor

Borrower is pledgor; creditor is pledgee (eg. Bank,pawnbroker) Pledgee is similar to bailee for value in their exercise of a

standard of care

Pledges of Pawn


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Pledgees obtain liens on the property pledged, andthe pledgor gives authority to the pledgee to sell thepledged goods upon default

They can obtain the costs and debts, but anysurplus funds remaining belongs to the pledgor Same things as the lean-holder

However, pawn actually obtains title of thegood pledged

Must post notice and advertise the final notice to thepledgor After they receive they take title of theitem and can keep all surplus funds

Governed by the Pawn Brokers Act in Ontario

Pledges of Pawn


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Chapter 18


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Nature of an agency

Agency is a relationship in which one person, knownas an agent, is authorized to bring its principalintocontractual relations with third parties

Agents can be people who enter into a contractual

relationship for their principle under the principlesauthority

Very hard to draw the line between the employeesand agents Employees have very limited opportunity to bind their employer to

a contract

They act for the principle An exception to privity rule, allows insurance company to sue you

for default of payment.


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Agents

Dependent Agents Act exclusively for a single principal

Functions of agency and employment may be entirelyseparate, ie. an agent need not be an employee just as anemployee need not be an agent

By law, the employer must give the employee notice Theyhave a vicarious liability


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Agents

Independent Agents Not an employee and acts on behalf ofseveral principals or clients. Eg. Lawyers or stock brokers whoact as agents for their clients when dealing with purchases ofland, buildings, shares

So called real-estate agent does not have authority to sell the

property of a client and thus is not a true agent

Real estate agent can also act on behalf of buyer and sellerwhich creates a conflict of interest

Note: Once a person begins to act as an agent in a particulartransaction, that person is bound by all the duties of acontractual agent.


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Agency relationships

*An agents power to contract on behalf of her principal islimited to the capacity that the principal possesses* Agent and Principal Agency Agreement

Agent act under the principal It is a normal contract

The authority of the agent must be expressly set out inthe agreement If it includes issuing notes and signing checks, they must be in

writing Power of attorney: Able to sign the documents on behalf of the

principle This also must be in writing If there is something not included in the contract, and the

agent has the right to do something similar, it is implied thatthey are able to do the similar thing.


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(cont)

Principal and third party Agent makes contracts between these two parties on

principals behalf

Principal must ratify the contract

If the principal becomes insane or dies, the ratification is

not valid Ratification must be timely and the principal has to interact

with the third party.

A principal need not ratify it expressly, it can do soimpliedly by assuming the benefits of a contract

Conditional acceptance is not ratification


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Estoppel

Apparent Authority In apparent authority, circumstances may make it appear to third parties

that an agent has authority to make the bargain, when in fact they donthave any real authority

Agents may exceed their real authority by venturing into sideline activitiesor act in violation of special restrictions

So when can a principal legally refuse to be bound by a contract? Test is whether a third party should have been aware of the agents

lack of authority, or had reason to be suspicious A third party is expected to act with a reasonable measure of business

acumen and common sense

Presumption of authority of agent.


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Holding Out

When a business impliedly represents someone to betheir agent and will not be permitted to deny theexistence of an agency

It is the responsibility of a principal to inform third

parties that the agency has ended. If not, you arebound by their contracts


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Agent by Necesscity

Agent has to act in dire circumstances and it is notrecognized as legitimate authority

Eg. Neighbours roof collapses

While there may be a moral duty to ratify, as a generalrule our law does not force liability on a person againsthis will


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Duties of Agent to the Principal

1) Duty to comply with the contract Determined by terms, explicitly and implied of the contract Punished by breach of contract Agent has a duty to be diligent in keeping her principal

informed about important developments

2) Duty of Care Agent owes duty of care to principal Reasonable care, diligence and skill when dealing with

transactions of the principal Will depend on their own degree of knowledge, skill and

their task


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Personal Performance

Another duty to principal

Cannot delegate agency status to another party withouttelling the principal

When an agent can act through a sub agent, there is

only privity between:

The agent and sub agent

The principal and the original agent


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Good Faith

Fiduciary Relationship Agents must place the interest of the principal ahead of their

own interest

Duty also requires that an agent inform the principal of anyinformation that may influence the principals decisions

Acting for two principals

Generally not acceptable nor very wise An agent can act for both parties in a transaction if they are aware

of the arrangement and have agreed to it


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Duties of Principal to Agent

Any principal that uses agent implies that theywill reasonably pay the renumeration byquantum merit or whatever was enlisted in thecontract

Translation: You will pay them for their services

You will reimburse their expenses


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Who Is Liable?

An agent should have no liability in a properlyconstructed contract because the contract is betweenthe principal and third party

An agent alone is liable if contracting for an undisclosed

principal, and acts as the principal themselves.

Both are liable if the agent acts as the principal, butthen discovers the actual principal.

Can sue the agent or the principal, but not both.

If real principal is discovered during litigation, can terminatethe lawsuit and sue the real principal.


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Liability for Torts

If agent is guilty of fraudulent misrepresentation, thecontract becomes voidable and the third party mayrescind it

Can also sue for deceit

If the agent was operating within apparent authority,the third party can sue the principal as well as theagent for deceit

Agents can be liable to negligent misrepresentation

because they owe a duty of care to the third party.


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Breach of Warranty of Authority

There is no contract if a person holds themselves out asan agent but has no authority (actual or apparent) andprincipal doesnt ratify

In this case a third party can take the so-called agent to

court for a tort known as breach ofwarranty ofauthority

Damages are awarded to put the third party in theposition in which they would have been if representationwas true.


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Terminating an AgencyRelationship

Authority is terminated when:

End of time specified in the agency agreement

With no specified time, it can be terminated by any party atany time.

If the agency is not ended by insanity or death, then the agencycan still be seen as a parent-authority and the principal may

still be liable to the third party Completion of particular project for which agency was formed Notice by principal or agent that they wish to end the agency

Death or insanity of principal or agent

Bankruptcy of principal

Event that makes the performance of the agency impossible

Loss of capacity


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Relationship of Employer andEmployee

Employment contract is what governs the relationship between theemployer and employee. It is a contractual relationship

Relationship of employer and employee is established by a contractthat gives one party, the employer, the authority to direct and controlthe work of another party, the worker.

Additional terms are implied relating to Common law (termination, notice) Statute (Statutory minimums, workers rights)

Terms of Contract Job Description (from HR)

Provides standard against which to evaluate your performance Rate of Pay Term Option to terminate (discussed later)


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(cont)

Compare with Independent Contractor

If an individual is found to be an independent contractorrather than an employee then the relationship is governed bythe terms of the contract and the general principles ofcontract law

IMPORTANT: You have to look at the whole picture to see ifthey are an independent contractor or an employee Itmakes a difference because the liability of an employee aredifferent from that of an independent contractor


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(cont)

Distinction is important as it affects agency and vicariousliability

When a firm undertakes work as an independent contractor, anyliabilities that it incurs are almost entirely its own, however thecontractor must take reasonable precautions to avoid endangeringthird parties

Injured party sues both the employee and the employer for tortliability because of vicarious liability The employers usually havethe more money

They can be sued because of bad hiring, wrongful referrals,careless references (For one employee to another company),vicarious performance where the person doesnt have toperform personally but it is the employer who remains liable.

Employers have a duty to pay, implied duty of a safe workplace

Employees have a duty to obey any reasonable and lawful request,duty to exercise skill and care in their job, duty of good faith andfidelity to the employer


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Amending Terms of EmploymentContracts

The ability of an employer to amend theterms of the employment contract will beimpacted by the terms of the contract

A unilateral substantial change to animportant term (I.e. salary, job position)can result in constructive dismissal Constructive dismissal - an employee claims

wrongful dismissal based on the unilateralchange of the terms of employment whichamounts to repudiation of the employmentcontract


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Employers Liability

Liability in Contract Employers are held responsible for improper work

done by employees just as a promisor is liable forwork that it subcontracts

Liability in Tort A business is vicariously responsible for damages toany third party for the consequences of any tortthat an employee commits in their course ofemployment

All the injured party need establish is that theemployee caused the damage while engaged attheir work (ie. on-delivery etc)

Employers can still sue the employee if it deems itworthwhile


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Notice of Termination of Ind.Employee Contracts

Most employment contract tend to be continuous in nature, inorder to terminate, a notice is required by both parties to endthe contract

First off, when an employer has hired an employee for a statedperiod of time, and that time has elapsed, no notice of

termination is required In common law, reasonable notice is required and it depends on

the circumstances of each individual


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Notice of Termination of Ind.Employee Contracts

Employment Standards Act They are minimums and notsufficient by common law !Notice = Time = $$

If the hiring is general or indefinite reasonable notice dependson the circumstances of employment In most provinces the minimum length of required notice is

specified by statute, any attempt to undermine this is void !Often 1 wk / year of employment

Allowed to have an option to terminate, terminate you at anytime provided you give me $###,###.00


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Grounds for Dismissal Without Notice(MIDD)

Dismissal without further obligation by the employerwhen the employees conduct amounts to a breach ofcontract (A major term in a major way) and they can suefor damages.

If they tried to terminate for a minor breach, they canbe sued


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Grounds for Dismissal Without Notice(MIDD)

The Contractual Basis An employer need not give notice when it can show that the

employee was dismissed for cause (ie. when an employeesconduct amounts to breach of the contract of employment)

Employer then becomes discharged from any furtherobligations

The courts have classified the breaches into differentbreaches that are accepted grounds for cause ofdismissal


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(cont)

Misconduct

Not cause a economic loss and it must be sufficient that theemployee cannot be trusted.

Anything illegal or immoral that would bring business into publicdisrepute, and or cause employer financial loss are grounds of

dismissal without notice

Disobedience Willfully disrespecting reasonable chain of command, bosswishes

Does not require notice


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(cont)

Incompetence

Expressed term requiring competence

Employee has stated specifically in their resume that theypossess the certain capabilities or that they are licensed =Expressidly stated

It can also be implied that requires a certain skill in the nature

of the job

If the employer does hire someone and discovers that they areincompetent, then the notice is not required to dismiss.

If you have condoned the act, then the Doctrine of Condonationis

applied

You have to give them the opportunity to change and learn thatskill

Cause for dismissal becomes more difficult to justify the longer anemployee is hired for


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(cont)

Illness Frustrating event

Reality is that if it is a serious illness or a recurring illness, it is byfrustration because it is outside of the employers contract

You can fire people, but it looks bad better to hand over toinsurance !You still pay them

You also have a duty to accommodate, if you can accommodate theperson (flex-time, accessibility) you must!

In a layoff condition, the statue states that the employer must givenotice. However, if it a short term layoff (3 months), you dont

have to give notice and giving money or providing them certaintime


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Non-Competition Clauses

Courts are hesitant to enforce these as theyoften violate public policy with respect torestraint of trade

Exceptions are sale of business and employee/employer (trade secrets or using old contacts tobetter yourself)

Terms of clause must be reasonable with

respect to time, geography and the activityitself


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Wrongful Dismissal

Either they didnt cause the breach of contract,they didnt give enough time to train, and theydidnt give notice

The employers defense includes: They weredismissed because of cause, or when adequatenotice is given


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Wrongful Dismissal

Even though the employer has given money insteadof notice, even though it is found after the fact,they can still use to get that money back because of

a breach (Illegal activity, fraud, etc.)

Usually, the employer should keep a file in order toavoid complications when there is a lawsuit Building the document/evidence in the HR file


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(cont)

Damages

For an employee to succeed in an action against heremployer for wrongful dismissal, they must show thatthe employer has broken the contract by failing to give

employee notice they were entitled

As for adequate notice, the courts can believe that theindustry standard isnt enough notice, therefore theygive it themselves. How do they decide?

Task of court is to first determine the length of time

that should have been reasonable given circumstances Employment Standards legislation is just a minimum


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(cont)

Next, court reviews whether bad faith adds to the harmcaused, the court may award extra damages (Wallace v.United Grain)

Finally, the court will consider any other damagesflowing directly from breach, such as the transportationcosts of finding a new job

How the courts will examine the case of the noticeperiod is by the Bardel factorslisted above Howmuch money would they have gained if they ?

Note: Partys injured by the breach of contract are expected to

mitigate their losses by taking other (similar) job opportunitiesif possible

If they didnt mitigate, the amount that they would havegained if they didnt get enough notice and received damages,this amount can be reduced from the damages amount


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Change in Employment Law -IMPORTANT

Realized that some contracts became a personal element Courts have realized that this can apply in employment as well Wallace vs. United Grain Grower

He was promised security till retired He was convinced to takethe job and quit his old one

Shortly after he was hired, his new manager started to harass him

and it became intolerable and Mr. Wallace was fired It was donein a humiliating and high-handed manner This was bad faith fromthe employer

The Supreme Court of Canada stated that the employer acted inbad faith, harshly, cruelly, or high-handedly and the employee hassuffered from terrible mental distress and additional award abovenotice was granted

He didnt get much money but this opened the door

HUMAN ELEMENT MUST BE CONSIDERED NOW IN EMPLOYMENTLAW


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(cont)

Damages that are considered above and beyond noticeinclude: Ruined reputation

Physical health is damaged

Expenses incurred when looking for another job

Equitable Remedies of Reinstatement Symmetry fails but is permitted

Employee can obligate the employer to reinstate them

They allow this because of the impersonal nature of

corporations. They can just them in a differentdepartment

To put people in the position in close and personalrelations in a small company, the courts will not allowthis and they will state that damages is sufficient


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Employee Welfare Legislation

Employee Rights

Human Rights (Human Rights Code Ontario) Cant ask questions during interviews about age, race, gender,

disability, religion, sexual orientation, marital status, family

status, or conviction when a pardon is granted Have to hire people if theyre capable of doing the work


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Employee Welfare Legislation

Newest problem is the wrongful failure to hirewhenyou feel you were discriminated against in some formwhen you really deserved to be hired

Pay Equity

Equal pay for equal work, prohibiting different levels of pay forthe same kind of work in the same establishment

Comparative valuewith respect to skills / training in addition tothe type of work set up a scorecard on different aspects of jobswhen jobs arent identical but have equal value

Trying to amend between women and men, but the changes havebeen really slow and there are still discrepancies


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(cont)

Employment Equity

Employment equity act require employers with over 100 employeesand under the federal jurisdiction based on the Constitution Act toobtain relevant information about personal characteristics of theiremployees in order to determine under-representation ofdesignated groups, results in preferential hiring

They can pick someone over another if they require it to even out

the group Mandatory Retirement

No longer any mandatory retirement in Ontario

Regulation of work conditions (Employment Standard Act)

General work conditions

All provinces now provide annual vacations with pay, statholidays

15 minute break, every 4 hrs

1 yr. Maternity/Paternity leave

Working hours for older people/ No child labour

Minimum wage


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(cont)

Employment Insurance

Employment Insurance act requires employers and employeesto contribute to the government controlled fund that entitlesthe employee to collect these funds they are unemployed

Does not apply to: Retired and self-employed people , peopleworking for their spouse or on strike

Employer must account for all contributions and send them to

the government

Occupational Health (Occupational Health and SafetyAct)

Proactive / preventative approachto preventing dangeroussituations

There are areas that must be considered in employment

situation and now they are talks if the industry or governmentshould control these standards

Firefighters have respiratory problems because of the firethey inhale


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(cont)

Workers Compensation (Workplace Safety & Insurance Act)

No-fault system, keeps employer-employee relationsbetter after injury

All the employer must prove is that the injury was causedby a contributory negligence for the employee and theydont need to pay If the employer can prove that another employee

caused the harm They need to make sure that theyare competent and did training

If there is a voluntary assumption of risk, then theemployer is off the hook Because they accepted

these risks when they took the job


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(cont)

Workers Compensation (cont)

Employers must contribute to the fund which is then usedto pay claims however, if it was willful misconduct on thepart of the employee, then the employee cannot claimfor these funds. However if they become severely disableor die, the family members can still use even if there waswillful misconduct on the part of the employee


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Chapter 24-26


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Sole Proprietorship

Unincorporated business owned by a singleperson

Subject to many regulations common to all

businesses. Must have a license to carry on that type of

business

Must keep proper accounts and tax deductions

Must observe human rights and safetyregulations

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Partnerships

Relation between two or more peoplecarrying on a business with a view to profit

Advantages:

Pool knowledge and skills Physical and financial resources

Disadvantages:

Disagreements & incompetence Lost time in arguments

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The Partnership Act

Partnership rules under a body of law.

Developed over numerous cases supported

by general legal principles

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Nature of a Partnership

Four basic elements to a partnership:1) The partnership relationship

Consentual and contractual agreement

Without written agreement, found to be partners ifthey have acted as such

2) Between persons

3) Business Nature

4) Profit Motive

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Legal Nature of a Partnership

Legal Personality Partnership has no independent existence

Adding/subtracting partners makes a new partnership

Continuing Relationship

Partnership assumed to continue Can make express terms for adding/subtracting partner

Property No partner owns the property, each have an interest

Creditors Cannot distribute wealth until creditors are paid

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Creation of a Partnership

Partnership Agreement

An agreement between persons to create a partnership usuallysetting out the terms of the agreement

Partnership comes into existence by the agreement, explicit orimplied

Deals with: Identity of partners

Name of firm

Nature of business

Duration of relationship

Method of termination Etc

Limited partnership formed by registration

Do not have to register if partner names are in company title.81


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Liability of a Partner

Contractual liability

Agency Principles Every partner is an agent of the firm & other partner

Joint Liability If firm is sued, both partners are liable

If one partner is sued, can be indemnified by the firm andcan then sue co-partner personally

Apparent Partners

For partner to leave firm, must have novation (waiver) of allother partners and must notify creditors.

Breach of Trust Similar to vicarious liability, firm is liable for partners actions82


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Termination of a Partnership

Express Provision

Agreement includes a provision to terminate thepartnership

Implied Statutory Rules

Without express provision, Partnership law has:Termination by notice or expiry

Termination on death of insolvency

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Partnership Dissolution by Law

A court can dissolve a partnership if:

A partner is found to be mentally incompetent

A partner becomes permanently incapable ofperforming his part of the agreement

A partner has been guilty of conduct likely toprejudicially affect the business

A partner commits a breach of the agreement

It is just and equitable that the partnership be dissolved

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Effects of Dissolution

Must sell off all assets in partnership, paycreditors, then divide surplus betweenpartners.

Sequence of payments is: Payment of the debts of the firm owed to non-partners

Repayment of loans made to the firm by partners

Repayment of capital contributed by partners Sharing any surplus among the partners according to

their entitlement to share in profits

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Joint Ventures

A business venture undertaken by two ormore parties (usually companies)

Comes in two forms:

Contractual Joint Venture

Does not create a separate legal entity

Equity Joint VentureCreate a jointly owned corporation owned by both

companies Ability for recourse changes with each

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Limited Partnerships

Covered under the Limited Partnership Act A partnership in which some of the partners limit their

liability and amount of capital contributions

General Partner One who has unlimited liability, and takes part in the day to dayfunctions of the business.

Limited Partner

Has limited liability to the amount invested in capital. Cannot takepart in the day to day functions.

If a limited partner interferes with the day to dayfunctions too frequently, he can be sued as a generalpartner. 87

Limited Liability Partnerships


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Limited Liability Partnerships(LLP)

A partnership in which non negligentpartners are not personally liable for lossescaused by the negligence of a partner

Used primarily for professional organizations

Limits fiduciary duty of partners to the onewho breaches/creates the error

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Chapter 27


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Corporations

Corporations create some of their own rulesin their bylaws and articles.

Differ from other forms of companies on:

IdentityLiability

Transfer of Ownership

Participation in Management

Continued Existence

Separation of Ownership and Management

Fiduciary Duty

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Corporations - Identity

Have a separate identity, recognized as alegal person

Legal Person:An entity recognized by law as having its own legal

personality and having rights and duties of its own.

Distinct from natural person (human being)

Corporation: A legal person formed by incorporationaccording to a prescribed legal procedure

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Corporations - Liability

Liability of owners (shareholders) is limitedto the amount of their capital contribution

Large advantage to incorporation

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Corporations Transfer of


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Corporations Transfer ofOwnership

Allowed to sever ownership, unlike soleproprietorship and partnerships

Ownership is transferred without issue by

simply selling shares

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Corporations - Management

In partnerships, each partner can be an agentfor the company.

Corporation owners cannot contract for thecompany

Officers/management contract for the company

Management in corporations is delegated to anelected board of directors

Separation of ownership and management allowsshareholders to receive a return on theirinvestment without risking loss further than theirinitial investment.

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Corporations Continued


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Corporations ContinuedExistence

Partnerships, if a partner dies or leaves thepartnership is dissolved

Corporations exist on their own irrespectiveof death or sale of an owners share

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C i Fid i D


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Corporations Fiduciary Duty

Shareholders owe no fiduciary duty to thecompany

Company owes no fiduciary duty to theshareholder.

However, managers must still act in good faithto the shareholder

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Consequences of Separate Legal


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Consequences of Separate LegalPersonality

A corporation can only act through its human agent. The question then arises whether the agent had authority

to contract.

Saloman vs Saloman

The one man company States that employees assets have nothing to do with the

corporation

The agent is not liable for anything if acting in good faith

Exceptions are:

CBCA

Bankruptcy and Insolvency Act

Lifting the Corporate Veil97

E ti t Li it d Li bilit


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Exceptions to Limited Liability

Canadian Business Corporations Act If a dividend payment is made without any profit,

shareholders are liable for other debts

Bankruptcy & Insolvency Act

Receiving payment from a property right before bankruptcy,may have to repay amount paid to them.

Lifting the Corporate Veil Sometimes courts will disregard incorporation to lift the

veil and get to assets.

Must:

Control the corporation

Exercise control to commit a wrong

Cause injury to plaintiff98

M th d f I ti


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Methods of Incorporation

Corporations Act Letters patent

Ontario Business Corporations Act (OBCA)

Canada Business Corporations Act (CBCA) Both state articles of incorporation and bylaws

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I ti P


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Incorporation Process

CBCA/OBCA

Articles of Incorporation:

Corporation name/number

Head office

Share structure/class

Number of directors Type of business

Corporation Bylaws: Who the officers are/how the company runs

Qualify as a director

Calling a meeting

Notices Quarum (# of people necessary to make a meeting legally functional)

Signing authority

Job description of officers

Dividend process 100

T f C ti


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Types of Corporations

Public Widely held, shares are traded by those of the

general public

Private

Closely held, shares cant be offered to the publicand there are no more than 50 shares. All corporations start this way

Professional Corporation

Special type of corporation formed by members ofthe professional community (doctors, lawyers, etc)

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R i i C it l


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Raising Capital

Equity Issue shares

Initially has par value at prospectus date

Preferred shares vs common shares

Dividends, share repurchases and restructuring

Debt

Bonds and debentures

Options and redemption dates

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Chapters 31 and 32

E C


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E-Commerce

The delivery of information, products, servicesand payments by telephone, computer or otherautomated media.

Largest percentage of transactions are from

business to business

Not just the internet

E-Commerce Act (2000)

Rules on forming a contract

Consumer Protection Act

Same rules that protect online consumers 104

Establishing an Online Business


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Establishing an Online Business

Negotiate a Web site development agreement

Negotiate a Web site hosting agreement Usually with an internet service provider

Liability for interruption of service

Negotiate internet access agreement with the internetaccess provider

Register a domain name (trademark issues)

Want security and reliability among service 105

E-Commerce Contracting


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gIssues

Acceptance Capacity

Proof

Jurisdiction Amending Contract

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Accepting Online Contracts


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Accepting Online Contracts

Click Wrap vs Browse Wrap Click Wrap: Having an I agree button for

terms and conditions

Browse Wrap: Having terms and conditions on aseparate page that the user needs to navigateto

For exemption clauses, click wrap is easierto prove case as it is more difficult for theplaintiff to browse past.

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Online Capacity & Proof Issues


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Online Capacity & Proof Issues

Issues with proving capacity. What if the person is under 18?

What if they did not mean to click the button?

Must prove requisite intent and capacity topurchase an item. Which is very difficult todo.

Proof that it was the plaintiff thatpurchased is difficult to find.

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Jurisdiction Issues


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Jurisdiction Issues

If the seller is in Ontario, but the buyer is inTexas, where is the case heard?

Different laws from different areas mean

that each side may want the case to betried in a different area.

Court decides where the dispute will be heardand which laws and rules will be used.

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Amending an Online Contract


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Amending an Online Contract

Kanitz v. Rogers Cable Kanitz sued for poor service. Rogers countered

by saying that there was a term that forcedbinding consumer arbitration.

Outcome was Ontario government placed a newlaw saying binding consumer arbitration is avoid legal term.

Proves that amending an online contract isdifficult.

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E Commerce Tort Issues


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E-Commerce Tort Issues

Negligent Misrepresentation Cannot misrepresent product in order to gain a sale.

Must have knowledge of product

Fraud

Intentional deceit is punishable in the same way as aphysical sale

Defamation

Defamation for inflammatory comments on your site

Possible defamation for linking to a site withdefamatory statements

Duty to protect clients information

Privacy 111

E-Commerce Intellectual


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Property Issues

Copyright Infringement Easier to prove as it is written and available online

Conversion of Intellectual Property

Covers patented information transferred to the internet

Trademark Infringement

Under the tort of passing off

Cybersquatting

Address or name.

Using someone elses trademark to gain popularity/hitsfor your website.

I.E. If I used studentsofferingsupport.com to sell mygoods 112

Copyright


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Copyright

The right or ownership that exists in original worksof authorship in any medium of expression.Includes literary, musical, etc

Protects expression, not the idea.

Allowed to build on an original idea, but protectsprofiting off of the original idea.

Works for published or unpublished work, as longas it is copyrighted.

Exists for the life of the author + 50 years Remedy is damages ($$$) or injunction (halting

production)113

Trademarks


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Trademarks

Distinctive mark used to distinguishproducts or service.

Can be a word, name, symbol, package, etc

Needs to be registered

Under the tort of passing off

Intentionally using another idea and makingyours similar to profit.

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PIPEDA


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PIPEDA

Personal Information Protection andElectronic Documents Act

Information includes any personal informationthat is used for identification (name, address,etc)

Imposes restrictions on the use and misuse ofpersonal information

Applies to every organization that collectsinformation.

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PIPEDA II


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PIPEDA II

Limits on collection and consent for information:

Collection: Cannot collect more information than is needed.

Must be able to explain why you are collecting it

Consent

Need to have written consent for the collection and use of theinformation you take

Use of information Can only use information for the purpose it was collected

Disclosure

Must tell the person if you are sharing it with someone else

Security

Must keep the information safe

Must appoint person for policy, check accuracy and research breaches116

Conducting International


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Business

Three basic types, each has different lawsyou need to follow

Export/import

Licensing Direct Foreign Investment

Branch Plant

Foreign Subsidiary

Joint Venture

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Export/Import Issues


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Export/Import Issues

Proper law of the contract Intent, which laws are used

Common understanding of terminology

Commercially accepted standard

Currency

Price, payments, countertrade

Time

Dispute resolution

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International Business Contract


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Issues

Delivery Issues

Delivery (responsibility and risk)

EXW (ex works seller released at warehouse)

FOB (Free on board)

Buyer arranges own shipper and seller delivers to buyers carrier

CIF (cost, insurance, freight paid for)

DDP (delivery and duty paid)

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International Business Contract


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Issues II

Jurisdiction Where the lawsuit is commenced and heard

Standing Does the plaintiff have the right to start an action in the

jurisdiction (I.E. Canadian in the US?) Choice of Law

Which law of the contract will be applied (Canadian vs USlaw)

Enforcement

Collection, assets in the jurisdiction, recognition of foreignjudgements

Recognition is bringing claims and assets from otherjurisdictions to your own 120

Commercial Arbitration


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Commercial Arbitration

Sometimes used to settle international businessdisputes.

Voluntary and must be stated in original contract

Advantages:

Pick the arbitrator and panel (no home advantage)

Speed & cost are better

Agree on enforcement (both agree to honouroutcome)

Disadvantages:

No appeal (decision is final)

Bound by outcome of agreement 121

International Legislation


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International Legislation

GATT General Agreement on Tariffs and Trade

Gives member countries goods and services most favourednation status

NAFTA North American Free Trade Association Regional free trade area & dispute resolution

WTO World Trade Organization

Dispute resolution process between countries. Appoints ajudicator to see if there was a breach in the agreement.

If a breach, the country that suffers can retaliate122


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That is the END!Thank you so much for your support!

So study hard and good luck!