Part 1 Introduction to Law 1
Chapter 1 Risk Management and Sources of Law 1
Why Study Law? 2
Risk Management 2
■ BUSINESS DECISION 1.1 3
An Introduction to the Legal System 6
The Nature of Law 6
■ ETHICAL PERSPECTIVE 1.1 7
A Map of the Law 8
Sources of Law 12
■ YOU BE THE JUDGE 1.1 21
■ BUSINESS DECISION 1.2 25
Chapter 2 Litigation and Alternative Dispute Resolution 29
The Litigation Process 30
Who Can Sue and Be Sued? 30
Legal Representation 33
Pleadings 35
Pre-Trial Activity 36
The Trial 37
The Remedy 38
Enforcement 39
■ BUSINESS DECISION 2.1 39
Appeals 39
Costs 40
■ ETHICAL PERSPECTIVE 2.1 43
The Court System 43
The Supreme Court of Canada 43
Court of Appeal 44
Superior Court 45
Federal Court 45
Provincial Court 45
Court Hierarchy 47
■ YOU BE THE JUDGE 2.1 50
Administrative Tribunals 50
Alternative Dispute Resolution 52
Negotiation 53
Mediation 54
Arbitration 54
Canadian Case Study for Part 1 60
Part 2 Torts 61
Chapter 3 Introduction to Torts 61
Introduction to Tort Law 62
Torts and Crimes 62
Torts and Contracts 63
Types of Torts 64
General Principles of Tort Law 67
Liability Insurance 67
Vicarious Liability 69
■ ETHICAL PERSPECTIVE 3.1 70
■ BUSINESS DECISION 3.1 71
Remedies 71
■ YOU BE THE JUDGE 3.1 72
Alternative Compensation Schemes 75
Chapter 4 Intentional Torts 81
Assault and Battery 82
Invasion of Privacy 84
False Imprisonment 87
■ BUSINESS DECISION 4.1 90
Trespass to Land 91
■ YOU BE THE JUDGE 4.1 93
Interference with Chattels 94
Trespass to Chattels 94
Conversion 94
■ ETHICAL PERSPECTIVE 4.1 95
Detinue 96
Defences to Intentional Torts 96
Complete Defences 97
Partial Defences 99
■ CONCEPT SUMMARY 4.3 100
Chapter 5 Miscellaneous Torts Affecting Business 105
The Business Torts 107
Conspiracy 107
■ ETHICAL PERSPECTIVE 5.1 108
Intimidation 108
Interference with Contractual
Relations 110
Unlawful Means Torts 111
■ YOU BE THE JUDGE 5.1 112
False Statements 113
Deceit 113
Defamation 115
Injurious Falsehood 121
Torts Related to Land 122
Occupiers’ Liability 122
■ BUSINESS DECISION 5.1 124
Nuisance 126
■ BUSINESS DECISION 5.2 128
The Rule in Rylands v Fletcher 129
■ YOU BE THE JUDGE 5.1 132
Chapter 6 Negligence 137
Duty of Care 139
■ ETHICAL PERSPECTIVE 6.1 139
Test for Determining the Existence of
Duty of Care 139
■ BUSINESS DECISION 6.1 141
Breach of the Standard of Care 145
The Standard of Care for Professionals:
Professional Negligence 147
The Standard of Care for Manufactured
Products: Product Liability 148
■ ETHICAL PERSPECTIVE 6.2 151
Causation of Harm 152
■ YOU BE THE JUDGE 6.1 152
Remoteness 153
■ BUSINESS DECISION 6.2 155
Defences 155
Contributory Negligence 156
Voluntary Assumption of Risk 157
Illegality 157
Part 3 Contracts 163
Chapter 7 The Nature and Creation of Contracts 163
Comparing Torts and Contracts 165
Intention to Create Legal Relations 165
■ YOU BE THE JUDGE 7.1 167
Offer 167
The Nature of an Offer 167
Invitation to Treat 168
Communication of an Offer 168
The Life of an Offer 169
■ ETHICAL PERSPECTIVE 7.1 170
■ BUSINESS DECISION 7.1 170
■ BUSINESS DECISION 7.2 174
Acceptance 174
Acceptance by Promise 174
■ BUSINESS DECISION 7.3 178
■ YOU BE THE JUDGE 7.2 180
Acceptance by Performance 181
Chapter 8 Consideration and Privity 187
Consideration 188
Sufficient and Adequate Consideration 188
■ YOU BE THE JUDGE 8.1 190
Past Consideration 190
■ ETHICAL PERSPECTIVE 8.1 191
Pre-Existing Obligation 192
Promises Enforceable without
Consideration 196
Privity of Contract 199
Assignment 200
■ BUSINESS DECISION 8.1 202
■ BUSINESS DECISION 8.2 202
Trusts 203
Statute 204
Employment 205
Himalaya Clause 205
Chapter 9 Representations and Terms 211
Pre-Contractual and Contractual Statements 212
Misrepresentation 212
The Nature of Misrepresentation 213
■ BUSINESS DECISION 9.1 214
■ ETHICAL PERSPECTIVE 9.1 215
■ YOU BE THE JUDGE 9.1 217
The Legal Consequences of
Misrepresentation 217
Types of Misrepresentation 219
Honest Performance 220
Contractual Terms 221
Express Terms 221
■ BUSINESS DECISION 9.2 223
Implied Terms 224
Standard Form Agreements 225
■ BUSINESS DECISION 9.3 226
■ YOU BE THE JUDGE 9.2 227
Using Plain Language in
Contracts 228
Boilerplate Clauses 230
Chapter 10 Contractual Defects 240
Incapacity to Contract 241
Personal Incapacity 241
Business Corporations 244
■ BUSINESS DECISION 10.1 244
Associations 244
Indian Bands and Aboriginal
Persons 245
Public Authorities 246
Absence of Writing 246
Statute of Frauds 246
■ YOU BE THE JUDGE 10.1 248
Consumer Protection and Writing
Requirements 249
Mistakes 249
General Principles 249
Mistakes Preventing the Creation of
Contracts 250
■ BUSINESS DECISION 10.2 250
Mistakes Rendering Impossible the
Purpose of the Contract 251
The Doctrine of Frustration 251
Documents Mistakenly Signed 253
■ ETHICAL PERSPECTIVE 10.1 254
Unfairness During Bargaining 255
Duress 255
Undue Influence 255
Unconscionable Transactions 257
■ ETHICAL PERSPECTIVE 10.2 258
Illegality 258
Agreements Prohibited by
Statute 259
Common Law Illegality 259
The Doctrine of Public Policy 259
Chapter 11 Discharge and Breach 265
Discharge by Performance 267
Time of Performance 267
Tender of Payment 268
Tender of Performance 272
Termination by Agreement 273
Option to Terminate 274
Conditional Contracts 274
■ BUSINESS DECISION 11.1 275
Rescission 276
Accord and Satisfaction 277
■ YOU BE THE JUDGE 11.1 277
Novation 278
Release 278
Waiver 279
Termination by Operation of Law 280
Frustration 280
Lapse of Limitation Period 280
■ ETHICAL PERSPECTIVE 11.1 281
Bankruptcy 281
Discharge for Breach of Condition 281
Types of Terms 282
Types of Breach 285
The Effect of Discharge 287
Rescission 288
Chapter 12 Contractual Remedies 293
Rescission 294
Damages 295
Expectation Damages 295
■ YOU BE THE JUDGE 12.1 297
■ YOU BE THE JUDGE 12.2 297
■ BUSINESS DECISION 12.1 302
Reliance Damages 303
■ BUSINESS DECISION 12.2 303
■ ETHICAL PERSPECTIVE 12.1 304
Account of Profits 304
Nominal Damages 304
Liquidated Damages 305
Punitive Damages 306
Equitable Relief 307
Specific Performance 307
Injunctions 309
Exclusion Clauses 310
Unjust Enrichment 312
Chapter 13 Special Contracts: Sale of Goods 318
The Sale of Goods Act 319
A Sale of Goods 320
Passing of Property 322
■ BUSINESS DECISION 13.1 323
■ BUSINESS DECISION 13.2 323
■ BUSINESS DECISION 13.3 324
■ BUSINESS DECISION 13.4 324
■ BUSINESS DECISION 13.5 325
Terms in Contracts of Sale 326
Title to Sell 327
Nature of the Goods 327
Delivery and Payment 331
Remedies 332
General Remedies 332
■ YOU BE THE JUDGE 13.1 333
Special Remedies for the Seller 334
■ ETHICAL PERSPECTIVE 13.1 335
■ BUSINESS DECISION 13.6 336.
Part 4 Property 343
Chapter 14 Real Property: Interests and Leases 343
Interests in Land 344
Estates in Land 345
■ ETHICAL PERSPECTIVE 14.1 346
■ BUSINESS DECISION 14.1 349
Non-Possessory Interests in Land 350
Leases 355
Duration 356
Assignments and Subleases 357
Commercial Leases 358
■ YOU BE THE JUDGE 14.1 361
Residential Leases 362
Chapter 15 Real Property: Sales and Mortgages 368
Registration Systems 369
Registry System 369
Land Titles System 370
Unregistered Interests 372
■ ETHICAL PERSPECTIVE 15.1 373
Land Sales 373
Risk Management 373
Agreement of Purchase and Sale 376
Conditional Contract 376
■ YOU BE THE JUDGE 15.1 377
Closing 377
Remedies 378
■ BUSINESS DECISION 15.1 379
Mortgages 379
Nature of Mortgages 381
Terms of the Contract 383
Remedies for Default 384
Chapter 16 Personal Property: Bailment and Insurance 393
Acquiring Personal Property Rights 394
Losing Personal Property Rights 396
Bailment 397
■ BUSINESS DECISION 16.1 399
Liability of Bailors 399
Liability of Bailees 400
■ YOU BE THE JUDGE 16.1 401
Sub-Bailment 403
Personal Property, Risk Management,
and Insurance 406
Property Insurance 407
Other Forms of Business Insurance 410
■ ETHICAL PERSPECTIVE 16.1 411
Part 5 Business Law in the Digital
Economy 417
Chapter 17 Intellectual Property 417
Ideas as Property 418
The Nature of Ideas 418
The Economics of Ideas 419
Intellectual Property Law 419
■ CASE BRIEF 17.1 420
Copyright 420
■ ETHICAL PERSPECTIVE 17.1 427
■ BUSINESS DECISION 17.1 428
Trademarks 429
■ BUSINESS DECISION 17.2 431
■ YOU BE THE JUDGE 17.1 432
Patents 434
■ ETHICAL PERSPECTIVE 17.2 436
Industrial Designs 440
Confidential Information and Trade Secrets 441
Confidential Information 441
Trade Secrets 442
Chapter 18 Electronic Commerce 449
Domain Names 451
■ BUSINESS DECISION 18.1 454
Websites 454
Terms of Use 455
Privacy Policies 457
User-Generated Content 460
■ ETHICAL PERSPECTIVE 18.1 462
Intermediary Liability 462
Internet Service Providers 463
■ YOU BE THE JUDGE 18.1 465
Online Service Providers 466
Online Transactions 468
Automated Transactions 468
Cryptocurrencies 469
■ ETHICAL PERSPECTIVE 18.2 471
Jurisdiction 471
■ CONCEPT SUMMARY 18.2 473
Identity Theft 473
■ ETHICAL PERSPECTIVE 18.3 474
Collection of Personal Identifiers 475
Misuse of Personal Identifiers 476
Privacy Breaches 478
■ YOU BE THE JUDGE 18.2 479
Consumer Protection 479
Code of Practice 480
Canadian Case Study for Part 5 488
Part 6 Business Organizations 490
Chapter 19 Agency and Other Methods of
Carrying on Business 490
Basic Rules of Agency 492
Creation of an Agency Relationship 492
When Is the Principal Liable? 494
When Is the Agent Liable? 497
The Agent’s Duties to the Principal 498
The Principal’s Duties to the Agent 500
Termination 500
Risk Management Issues 501
Contract Liability 501
Tort Liability 502
■ YOU BE THE JUDGE 19.1 502
■ ETHICAL PERSPECTIVE 19.1 503
Business Relationships in which
Agency Issues Arise 503
Joint Ventures and Strategic
Alliances 503
Distributorships 504
Franchises 504
Agents Governed by Special
Statutes 505
■ BUSINESS DECISION 19.1 506
Chapter 20 Basic Forms of Business Organizations 510
Sole Proprietorships 512
Legal Requirements for Sole
Proprietorships 513
General Partnerships 513
Characteristics of General Partnerships 513
Partnership Statutes and Partnership
Agreements 514
Creating A Partnership 514
■ YOU BE THE JUDGE 20.1 516
Risk and Liability in General
Partnerships 516
Internal Organization of Partnerships 519
Dissolution of Partnerships 520
■ BUSINESS DECISION 20.1 521
Limited Partnerships 521
Corporations 522
Incorporation Process 522
Characteristics of Corporations 524
■ ETHICAL PERSPECTIVE 20.1 526
Corporate Finance 527
Chapter 21 Legal Rules for Corporate Governance 532
Management and Control of the
Corporation 533
How Directors and Officers Exercise
Power 534
Directors 534
Officers 535
Management’s Duties to the Corporation 535
Fiduciary Duty 535
Duty of Care 538
Protection for Creditors 539
Other Sources of Personal Liability for
Directors and Officers 540
Managing Liability Risk for Directors and
Officers 540
■ ETHICAL PERSPECTIVE 21.1 541
■ BUSINESS DECISION 21.1 541
How Shareholders Exercise Power 542
Shareholders’ Access to Information 543
Shareholders’ Agreements 544
Shareholder Remedies 545
Derivative Action 545
Relief from Oppression 545
■ YOU BE THE JUDGE 21.1 546
Other Shareholder Remedies 546
Securities Regulation 547
Corporate Governance in Practice 548
Corporate Social Responsibility 549
■ ETHICAL PERSPECTIVE 21.1 551
Corporate Liability for Contracts, Crimes, and
Torts 551
Contracts 551
Crimes 552
Tort 554
Part 7 Dealing with Secured Credit,
Bankruptcy, and Insolvency 558
Chapter 22 Secured Transactions 558
Risk Management Strategies for Creditors 559
How Security Interests Are Created 560
Granting a Security Interest in a Specific
Asset 560
Granting a Security Interest in All of the
Debtor’s Assets 563
Special Security Interests of Banks 564
Provincial Rules for Secured Transactions 565
Facilitating Risk Management for
Creditors 566
Scope of Application 566
Protecting Security Interests under Personal
Property Security (PPS) Legislation 567
■ BUSINESS DECISION 22.1 569
Priorities under PPS Legislation 569
Security Interests When Collateral Is
Transferred 571
Enforcement of Security Interests 573
■ YOU BE THE JUDGE 22.1 574
Special Rules for Consumers 575
Guarantees 576
■ ETHICAL PERSPECTIVE 22.1 578
Chapter 23 Dealing with Bankruptcy and Insolvency 582
Bankruptcy and Insolvency Law 584
Bankruptcy and Insolvency
under the Bankruptcy and
Insolvency Act 586
Business and Consumer Bankruptcy 587
Officials Involved in Bankruptcy
Procedures 588
Superintendent of Bankruptcy and
Official Receivers 588
Trustee in Bankruptcy 588
Bankruptcy Court 589
Registrar in Bankruptcy 590
Inspectors 590
The Process of Bankruptcy 590
Assignment into Bankruptcy by the
Debtor 590
Application by Creditors for a Bankruptcy
Order 591
Distribution of Assets 592
■ ETHICAL PERSPECTIVE 23.1 595
■ YOU BE THE JUDGE 23.1 596
Prohibited Pre-Bankruptcy Transactions 596
Liability of Directors of Bankrupt
Corporations 597
Proposals 597
Approval Requirements 598
Other Statutes Dealing with Financial Distress
and Failure 599
■ BUSINESS DECISION 23.1 601
Part 8 Government Regulation of
Business 605
Chapter 24 Government Regulation of Business 605
Taxation 606
Types of Taxation 607
Taxation of Corporations and
Shareholders 608
Income Tax Administration and Audits 609
Competition 610
Competition and the Common Law 610
The Competition Act 611
■ YOU BE THE JUDGE 24.1 615
■ BUSINESS DECISION 24.1 619
Consumer Protection 620
Misleading Advertising and Other Deceptive
Marketing Practices 621
■ ETHICAL PERSPECTIVE 24.1 624
Other Federal Legislation Relating to
Standards, Packaging, and Labelling 624
Provincial Consumer Protection
Legislation 625
Canadian Case Study for Part 8 630
Part 9 Employment and Labour Law 632
Chapter 25 Individual Employment 632
Pre-Employment Matters 633
Job Descriptions 633
Advertising Positions 633
■ BUSINESS DECISION 25.1 633
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