Professional Documents
Culture Documents
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2. ACCEPTANCE
CONTRACT
3. CONSIDERATION
4. INTENTION
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OFFEREE
the person to whom an OFFER is made
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Termination of an Offer
AN OFFER MAY BE TERMINATED BY:
Revocation: withdrawal of an OFFER Lapse: expiration of an OFFER after a specified or reasonable period Rejection: the refusal to accept an OFFER Counteroffer: turning down an OFFER and proposing a new one in its place Death or Insanity
Copyright 2011 by Nelson Education Ltd. 6-13
Termination of an Offer
REVOCATION
the OFFEROR can revoke an OFFER at any time before acceptance upon notifying the OFFEREE of withdrawal upon revocation the OFFER ceases to exist .
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Termination of an Offer
LAPSE
offer may expire on a specified date offer ends and can no longer be accepted if no expiry date is specified, then it remains open for a reasonable time reasonable time depends on the circumstances of the case
Copyright 2011 by Nelson Education Ltd.
6-15
Termination of an Offer
REJECTION
offer is automatically terminated if rejected by offeree
COUNTEROFFER
a form of rejection it is a rejection of original offer and a proposal of a new offer in its place
DEATH OR INSANITY
offer generally dies if the offeror or offeree dies as a general rule, someone who becomes insane would not be bound
Copyright 2011 by Nelson Education Ltd. 6-16
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Interpretation of Contracts
HOW COURTS INTERPRET CONTRACTS
Rules of construction guiding principles for interpreting or constructing terms of a contract Parole evidence rule rule that limits the evidence a party can introduce concerning the contents of the contract Business efficacy judge is entitled to imply terms necessary to make the contract workable Contractual quantum meruit awarding one party a reasonable sum for the goods and services provided under
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CONDITIONAL AGREEMENTS
condition subsequent a condition that, when it occurs, brings an existing contract to an end condition precedent a condition that, until it occurs, suspends the parties contractual obligations to perform their contractual obligations
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Managing Liability
LIABILITY MAY BE MANAGED BY:
limitation of liability clause a term of a contract that limits liability for breach to something less than what would otherwise be recoverable exemption clause a term of a contract that identifies events causing loss for which there is no liability liquidated damages clause a term of a contract that specifies how much one party must pay the other in the event of breach
Copyright 2011 by Nelson Education Ltd. 7-31
Terms of a Contract
STANDARD FORM CONTRACTS
a contract in which the main terms cannot be changed through negotiations Common for obtaining a credit card, renting a car, buying insurance or signing a guarantee of anothers debt Parties are expected to protect their own interests and ensure they understand the terms before accepting them
Copyright 2011 by Nelson Education Ltd. 7-32
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MINORS
General rule minors are not obligated by the contracts they make usually voidable at the option of the minor alone minors are obligated by contracts for essentials know as necessaries.
MENTAL INCAPACITY
Parties must understand the nature and consequences of the agreement. Those impaired through illness, alcohol, or drugs may not appreciate the nature and consequence of actions.
Copyright 2011 by Nelson Education Ltd. 8-36
UNDUE INFLUENCE
unfair manipulation that compromises someones free will the contract is voidable at option of the victim
UNCONSCIONABILITY
unfair contract formed when one party takes advantage of the weakness of another
Copyright 2011 by Nelson Education Ltd. 8-37
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ILLEGALITY
a contract is illegal if it:
a) is contrary to a specific statute and/or b) violates public policy
Copyright 2011 by Nelson Education Ltd. 8-40
Writing as a Requirement
STATUTE OF FRAUDS REQUIRES THAT
CERTAIN CONTRACTS MUST BE IN WRITING TO BE ENFORCEABLE For example:
guarantees- a promise to pay the debt of someone else contracts not to be performed within a year contracts dealing with land
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The methods of enforcing contracts The concept of privity Remedies for breach of contract
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Termination by Agreement
PARTIES MAY AGREE TO:
parties may decide to end the contract vary certain terms of the contract substitute a party transferring one partys rights and obligations to someone else; a limited form of novation parties enter into a whole new contract, known as novation
Novation the substitution of parties in a contract or the replacement of one contract with another
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Termination by Frustration
FRUSTRATION Termination of a contract by an unexpected event or change that makes performance functionally impossible or illegal Must establish:
was dramatic and unforeseen neither party had assumed risk of the matter occurring arose without being either partys fault makes performance functionally impossible or illegal
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Enforcement of Contracts
Non-performance of contractual obligations may result in breach of contract and a lawsuit BALANCE OF PROBABILITIES - proof that there is a better than 50% chance that the circumstances of a contract are as the plaintiff contends
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Enforcement of Contracts
PLAINTIFF MUST DEMONSTRATE THREE ELEMENTS ON THE BALANCE OF PROBABILITIES:
1.
2. 3.
Breach of contract the other party failed to keep a promise or term in the contract Entitlement to a remedy plaintiff must demonstrate he/she is entitled to the remedy claimed
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Termination by Breach
CLASSIFCATION OF THE BREACH 1. BREACH OF CONTRACT
Condition an important term, which, if breached, gives the innocent party the right to terminate the contract and claim damages Warranty a minor term, which, if breached, gives the innocent party the right to claim damages only
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Termination by Breach
2. BREACH OF CONTRACT
Innominate term a term that cannot easily be classified as either a condition or a warranty Exemption or limitation of liability clause clause limiting or excluding liability for breach Fundamental breach a breach of contract that affects the foundation of the contract such a breach may render the entire contract, including the exclusion clause, inoperative Anticipatory breach a breach that occurs before the date for performance
Copyright 2011 by Nelson Education Ltd. 9-55
Termination by Breach
3. ENTITLEMENT TO A REMEDY
Damages monetary compensation for breach of contract or other actionable wrong Defendant is responsible for reasonably foreseeable damages suffered by the plaintiff pain, suffering, and emotional distress are not generally accepted as being a consequence of breach of contract
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Termination by Breach
RESTRICTIONS ON DAMAGES
Remoteness
1. damages could have been anticipated 2. damages reasonably foreseeable
Duty to mitigate the obligation to take reasonable steps to minimize the losses resulting from a breach of contract or other wrong
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Equitable Remedies
EQUITABLE REMEDIES
Where damages are an inadequate remedy for breach of contract
Specific performance - court order for the party who breached the contract to do exactly what the contract obligated him to do
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Equitable Remedies
Injunction promise not to engage in specified activities Interlocutory injunction order to refrain from doing something for a limited period of time Rescission to restore the parties to the situation they were in before the contract was formed
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Equitable Remedies
Restitutionary Remedies
Unjust enrichment occurs when one party has undeservedly or unjustly secured a benefit at the other partys expense
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Outcome
pay compensation for injuries caused
Copyright 2011 by Nelson Education Ltd.
Outcome
fine, imprisonment, or both
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Liability in Tort
NO-FAULT SYSTEMS Workers Compensation legislation provides no-fault compensation for injuries, instead of a right to sue in tort LIABILITY AND JOINT TORT-FEASORS Joint tort-feasors two or more persons whom a court has held to be jointly responsible for the plaintiffs loss or injuries
LIABILITY AND CONTRIBUTORY NEGLIGENCE Contributory Negligence a defense claiming that the plaintiff is at least partially responsible for the harm that has occurred
Copyright 2011 by Nelson Education Ltd. 10-66
Liability in Tort
PRIMARY AND VICARIOUS LIABILITY Two kinds of liability in tort law: primary arises due to ones own personal wrongdoing vicarious liability the liability that an employer has for the tortious acts of an employee committed in the ordinary course of scope of employment
Copyright 2011 by Nelson Education Ltd. 10-67
Damages in Tort
PURPOSE OF DAMAGES to compensate a victim for loss caused by the defendant TYPES OF DAMAGES pecuniary damages compensation for out-ofpocket expenses, loss of future income and cost of future care nonpecuniary damages compensation for pain and suffering, loss of enjoyment of life, and loss of life expectancy
Copyright 2011 by Nelson Education Ltd. 10-68
Damages in Tort
DAMAGES IN TORT punitive damages an award to the plaintiff to punish the defendant for malicious, oppressive, and high-handed conduct
aggravated damages compensation for intangible injuries such as distress and humiliation caused by the defendants reprehensible conduct
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What is Negligence
NEGLIGENCE a careless act that causes harm to another CARELESSNESS a failure to show reasonable care REASONABLE CARE the care a reasonable person would exhibit in a similar situation
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Standard of Care
the standards of behaviour that would be observed by the reasonable person in society
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Negligent Misstatement
(or Negligent Misrepresentation)
negligent misstatement (or negligent misrepresentation) an incorrect statement made carelessly; negligence taking the form of words
professional someone engaged in an occupation requiring the exercise of specialized knowledge, education and skill third party one who is not a party to an agreement
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Other Torts
TOPICS: The range of torts that are relevant to business organizations How torts arise from the use of property How torts arise from business operations How a business can manage the risk of liability in tort
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Business-to-Business Torts
TORTS INVOLVING OTHER BUSINESSES passing off presenting anothers goods or services as ones own interference with contractual relations incitement to break the contractual obligations of another
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Business-to-Business Torts
TORTS INVOLVING OTHER BUSINESSES defamation the public utterance of a false statement of fact or opinion that harms anothers reputation libel written slander oral
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Business-to-Business Torts
DEFAMATION defendant has made a statement to at least on other person about the plaintiff the statement presents the defendant in an uncomplimentary light. the statement would have had the effect of lowering the plaintiffs reputation in the mind of a reasonable person hearing it
Copyright 2011 by Nelson Education Ltd. 12-98
Defamation Defense
QUALIFIED PRIVILEGE- defamatory statement being relevant, without malice, and communicated only to a party who has a relevant interest in receiving it ABSOLUTE PRIVILEGE- freedom of expression is so vital in such venues that no successful defamation action can be brought FAIR COMMENT- permits person to offer commentary on matters of public interest despite the commentary being defamatory
Copyright 2011 by Nelson Education Ltd. 12-99
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Sole Proprietorship
SOLE PROPRIETORSHIP: An unincorporated business organization that has only one owner Owner has unrestricted legal responsibility for obligations Oldest, simplest form of business organization No legislation pertaining to sole proprietorship as such
Copyright 2011 by Nelson Education Ltd. 14-107
Sole Proprietorship
BUSINESS OBLIGATIONS ARE PERSONAL OBLIGATIONS Unlimited liability-unrestricted legal responsibility for obligations Bank loan- owner must repay the loan The breach of contract- owner personally liable for breach
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Sole Proprietorship
PROS:
Simplicity Speed and independence Profit motive Lower costs
Tax benefits
Copyright 2011 by Nelson Education Ltd. 14-109
Sole Proprietorship
CONS: Unlimited personal liability Working alone Limited access to capital Limited life span Tax disadvantages
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Partnership
PARTNERSHIP A business carried on by 2 or more persons with the objective of making a profit Similar to a sole proprietorship, in that neither has a legal personality or legal existence separate from the people who comprise them
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Partnership
RULES GOVERNING PARTNERSHIP
SOURCES
Partnership legislation (in place in every province) Contract law Agency law
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Partnership
FINANCIAL LIABILITY Partners are fully responsible for all debts of the partnership Joint liability liability is shared by 2 or more parties (partners) where each is personally liable for the full amount of the obligation Creditors can proceed against the partner with the most assets
Copyright 2011 by Nelson Education Ltd.
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Partnership
THE PARTNERSHIP ACT
Provides mandatory rules with respect to existence of partnership and what the relationship of partners is to outsiders The Partnership Act- a partnership exists when two or more people carry on business with a view towards profit The statutory definition of partnership covers people who expressly intend to be partners as well as people who may not necessarily intend to be partners but act as if they were
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Partnership
THE PARTNERSHIP ACT (contd)
Relationship to each other the Partnership Act provides that partners are agents of one another as well as agents of the firm in matters relating to the partnership business Partners also owe a fiduciary duty to each other
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Partnership
RELATIONSHIP BETWEEN PARTNERS Partnership Act provides for:
All partners are to share equally in the capital and profits of the
business and contribute equally to the losses Property acquired shall be used exclusively for the partnership Partner shall be indemnified by the other partners for any liability incurred on behalf of the partnership A payment made by a partner in excess of his agreed subscription shall earn interest
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Partnership
RELATIONSHIP BETWEEN PARTNERS (cont)
Each partner may take part in the management of the business
No partner is entitled to remuneration for acting in the partnership business No new member admitted without consent of all partners Disputes may be decided by a majority-must have consent of all the members Partnership books shall be kept on partnerships place of business No simple majority may expel any partner
Copyright 2011 by Nelson Education Ltd. 14-117
Partnership
RELATIONSHIP BETWEEN PARTNERS AND OUTSIDERS Joint and several liability- individual and collective liability for a debt. Each liable party is individually responsible for the entire debt as well as being collectively liable for the entire debt
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Partnership
PARTNERSHIP AGREEMENTS
Partnership
HOW AND WHY A PARTNERSHIP ENDS
Act provides for termination If entered into for a fixed term, by the expiration of the term If entered into for a single venture, by the termination of that venture By any partner giving notice to the others of intention to dissolve the partnership following the death, insanity, bankruptcy of a partner
Copyright 2011 by Nelson Education Ltd. 14-120
Partnership
PROS: Simplicity Lower costs Greater access to capital Profit motive Tax benefits
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Partnership
CONS: Unlimited personal liability Loss of speed and independence Limitations on transferability Profit sharing Tax disadvantages
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Partnership Variations
LIMITED PARTNERSHIP A partnership in which the liability of some of the partners is limited to their capital contribution At least one partner has unlimited liability while others have limited liability General partners have unlimited liability Limited partners have a liability limited to the amount that they have contributed to the partnership capital
Copyright 2011 by Nelson Education Ltd. 14-124
Partnership Variations
LIMITED LIABILITY PARTNERSHIP (LLP) A partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners malpractice Designed to address concerns of professionals who are not permitted to use incorporation as a means of achieving limited liability
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The Corporation
Corporation is a distinct legal entity in law and capable of assuming its own obligations
SHAREHOLDER a person who has an ownership interest in a corporation DIRECTOR a person elected by shareholders to manage a corporation LIMITED LIABILITY responsibility of obligations restricted to the amount of investment DIVIDEND a division of profits payable to shareholders
Copyright 2011 by Nelson Education Ltd. 14-126
The Corporation
PROS: Limited liability Flexibility Greater access to capital Continuous existence Tax benefits Transferability Potentially broad management base
Copyright 2011 by Nelson Education Ltd. 14-127
The Corporation
CONS: Higher costs Public disclosure Greater regulation Dissolution Tax disadvantages Possible loss of control Potential bureaucracy
Copyright 2011 by Nelson Education Ltd. 14-128
Business Arrangements
FRANCHISE an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or trade name Disclosure requirements- franchisors are required to deliver a disclosure document to prospective franchisees 14 days prior to franchisee entering into binding agreements or paying money
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Business Arrangements
Franchisees have the right to rescind or cancel the franchise agreement within certain time periods if they do not receive a disclosure document Fair dealing and good faith- parties to a franchise agreement have the duty of fair dealing in the performance and enforcement of the agreement Right of association- franchises have the right to associate with one another and form or join an organization of franchisees
Copyright 2011 by Nelson Education Ltd. 14-130
Business Arrangements
JOINT VENTURE - a grouping of two or more businesses to undertake a particular project STRATEGIC ALLIANCE a cooperative arrangement among businesses that may involve joint research, technology sharing or joint use of productions DISTRIBUTORSHIP OR DEALERSHIP a contractual relationship where one business agrees to sell anothers product
Copyright 2011 by Nelson Education Ltd.
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Business Arrangements
SALES AGENCY an arrangement in which a manufacturer or distributor allows to sell products on its behalf PRODUCT LICENSING an agreement whereby the owner of a trademark or other property right, grants to another the right to manufacture and distribute products associated with the trademark or other proprietary rights
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Pre-Incorporation Issues
ISSUES TO CONSIDER: Whether to incorporate federally or provincially What types of shares will be available and to whom What to name the corporation
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Availability of Shares
Widely held corporation- shares are normally traded on the stock exchange (available to the general public) Closely held corporation- does not sell its shares to the public Securities legislation- corporations are subject to regulations in those provinces in which the securities are issued or traded
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A Corporate Name
CORPORATE NAME
All jurisdictions require a company to be identified by a name or designated number Must be distinctive Must not cause confusion with any existing name or trademark Must include a legal element Must not include any unacceptable terms NUANS report- a document that shows the result of a search for a business name
Copyright 2011 by Nelson Education Ltd. 15-140
Process of Incorporation
Newly upgraded automated search (NUANS) report Articles of Incorporation Notice of registered office Notice of directors Filing fee payable to the Receiver General of Canada
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Process of Incorporation
ARTICLES OF INCORPORATION- defines the basic characteristics of corporations and set out the basic features of the corporation including:
Name and place of corporations registered office
Class and number of shares Any restrictions on the transferring of shares The number of directors Restrictions on the business that can be carried on Any other provisions that an incorporator requires to customize the corporation
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Securities Legislation
SECURITIES LEGISLATION
To provide the mechanism for the transfer of securities To ensure that all investors have the ability to access adequate information in order to make informed decisions to ensure that the system is such that the public has confidence in the marketplace To regulate those engaged in the trading of securities To remove or punish those participants not complying with established rules
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Securities Legislation
ANY CORPORATION WISHING TO SELL SECURITIES TO THE PUBLIC MUST: Register File a prospectus a statement by the issuing company of prescribed information Insider trading restrictions insiders must report any trading they have engaged in
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Securities Legislation
INSIDER TRADING RESTRICTIONS Insider a person who has a special relationship with a corporation Insider trading transactions in shares based on confidential information of a material nature Tippee a person who acquires confidential information from an insider
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Operational Matters
CORPORATE LIABILITY
Liability in tort primary liability and vicarious liability
Primary corporation is regarded as the entity that actually committed the tort in question Identification theory a corporation is liable when the person committing the wrong is the corporations directing mind Vicarious liability liability when the tort has been committed by an agent or employee who is not otherwise a directing mind of the corporation Same principle applies whether a natural employer a human being, or an artificial employer a corporation
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Operational Matters
CORPORATE LIABILITY Agency law generally determines when a corporation is liable on a contract Outsiders can now generally rely on the apparent authority of agents the corporation would be liable on the contract To avoid personal liability, contracts signed should clearly indicate that the person is signing on behalf of the corporation and is not signing in a personal capacity
Copyright 2011 by Nelson Education Ltd. 16-152
Operational Matters
CRIMINAL AND REGULATORY LIABILITY Criminal liability judiciary adapts the identification theory. The person who committed the crime was a directing mind of the corporation CRIMINAL CODE PROVISIONS Liability for organizations Elements of a crime New legal duty Penalties-some with no prescribed limits
Copyright 2011 by Nelson Education Ltd. 16-153
Operational Matters
REGULATORY OFFENSES an offence contrary to the public interest Corporation and sometimes even its directors and officers face penalties, including civil liability for damages Corporation faces liability in areas of taxation, human rights, pay equity, employment standards, consumer protection, unfair or anticompetitive business practices, occupational health and safety, and environmental protection
Copyright 2011 by Nelson Education Ltd. 16-154
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Shareholders
SHAREHOLDER LIABILITY No duty to act in the best interests of the corporation Generally no responsibility for the debts and liabilities of the corporation Lifting the corporate veil determining that the corporation in not a separate legal entity from its shareholders (Salomon principle)
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Shareholders
SHAREHOLDER RIGHTS Three broad categories
the right to vote the right to information financial rights
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Shareholder Rights
DIFFERENT CLASSES OF SHARES Common share a share that generally has a right to vote, to share in dividends, and to share in proceeds on dissolution Preferred share a share or stock that has a preference in the distribution of dividends and the proceeds on dissolution
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Shareholder Rights
RIGHT TO VOTE INCLUDES RIGHT TO: Annual general meeting of shareholders Be given notice of the meeting Attend the meeting Ask questions Introduce motions Proxy a person authorized to exercise a shareholders voting rights
Copyright 2011 by Nelson Education Ltd. 16-161
Shareholder Rights
RIGHT TO INFORMATION INCLUDES RIGHT TO: Inspect the annual financial statement Apply to the court to have an inspector appointed if it can be shown there is serious concern about mismanagement Inspect certain records, including minute books Know whether directors have been purchasing shares of the corporation
Copyright 2011 by Nelson Education Ltd. 16-162
Shareholder Rights
FINANCIAL RIGHTS INCLUDE: Right to receive any dividend declared by the corporation Cumulative dividend rights of preferred shareholders Share in the assets of a corporation on dissolution
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Shareholder Remedies
A DISSATISFIED SHAREHOLDER MAY: Sell her shares Exercise dissent and appraisal rights Bring a derivative action a suit by a shareholder on behalf of a corporation to enforce a corporate cause of action Bring an oppression action a statutory remedy available to shareholders and other stakeholders to protect their corporate interests (oppression remedy)
Copyright 2011 by Nelson Education Ltd. 16-164
Shareholder Remedies
REMEDY UNDER AGREEMENTS: Shareholder agreement an agreement that defines the relationship among people who have an ownership interest in a corporation Unanimous shareholder agreement an agreement among all shareholders that restricts the powers of the directors to manage the corporation
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Creditor Protection
LEGISLATIVE PROVISIONS PROTECTING CREDITORS CANDIAN BUSINESS CORPORATIONS ACT FORBIDS:
Corporation paying dividends to shareholders if doing so would jeopardize its ability to pay own debts as they fall due (liquidity test) Paying dividends if that would make the company insolvent Directors who consent to such a dividend are personally liable to restore to the corporation any amounts so paid
Copyright 2011 by Nelson Education Ltd. 16-167
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Risk in Hiring
RISKS IN HIRING - critical to business success or failure Vicarious liability employer is liable when an employee commits a wrong while carrying out assigned duties or authorized tasks. Negligent hiring if the employer is careless in hiring, training, or supervising there may be an action against the employer in negligence due to the actions of employee
Copyright 2011 by Nelson Education Ltd. 20-174
Discrimination
DEFINED Treating someone differently on the basis of a prohibited ground Adverse effects discrimination discrimination that occurs as a result of a rule that appears neutral but in its effects is discriminatory Systemic discrimination discrimination that results from the combined effects of many rules, practices, and policies
Copyright 2011 by Nelson Education Ltd. 20-177
Discrimination
DEFENSES TO DISCRIMINATION Bona fide occupational requirement (BFOR)
a defense that excuses discrimination on a prohibited ground when it is done in good faith and for a legitimate business reason
Duty to accommodate
the duty of an employer to modify work rules, practices, and requirements to meet the needs of individuals who would otherwise be subjected to unlawful discrimination
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Discrimination
PENALTIES Failure to avoid or eliminate discriminatory practices can result in a complaint to the Human Rights Commission Board of inquiry investigates the complaint If complaint is valid, it can order the employer to stop its practices, hire a particular individual, pay monetary compensation, write a letter or apology, reinstate employee or institute an affirmative action plan
Copyright 2011 by Nelson Education Ltd. 20-179
Discrimination
AVOIDING DISCRIMINATION IN HIRING Job description Advertisements Application forms Interviews
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Employment Equity
EMPLOYMENT EQUITY LEGISLATION Laws designed to improve the status of certain designated groups requires employers to take positive steps to make the workplace more equitable Employment Equity Act targets the underrepresentation of women, Aboriginal peoples, people with disabilities, and visible minorities in the workforce
Copyright 2011 by Nelson Education Ltd. 20-181
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Laws that specify minimum standards in the workplace including: Hours of work and overtime Minimum wage Vacations and vacation pay Termination and severance Statutory (paid) holidays Maternity and parental leave
Copyright 2011 by Nelson Education Ltd.
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Workplace Discrimination
WORKPLACE HARASSMENT
Any unwanted physical or verbal conduct that offends or humiliates the victim and detrimentally affects the work environment or leads to adverse job-related consequences for the victim including: Threats intimidation verbal abuse unwelcome remarks jokes about race, religion, sex, disability, age displaying sexist, racist, or offensive pictures sexually suggestive remarks or gestures unnecessary physical contact physical assault including sexual assault
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Pay Equity
PAY EQUITY Provisions designed to ensure that female and male employees receive the same compensation for performing similar or substantially similar work Designed to redress systemic discrimination in compensation for work performed
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Workplace Privacy
COLLECTION AND DISSEMINATION OF INFORMATION legislation gives individuals the right to control the collection and use of personal information Privacy Act- regulates the collection and use of personal information held by the federal government Surveillance and searches- surveillance of employees with video cameras or closed-circuit television is sometimes used to prevent, detect, or investigate fraud, theft and harassment
Copyright 2011 by Nelson Education Ltd. 20-192
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Serious Misconduct
SERIOUS MISCONDUCT Intentional, harmful conduct of the employee that permits the employer to dismiss without notice Progressive discipline policy a system that follows a sequence of employee discipline from less to more severe punishment Condonation employer behaviour that indicates to the employee that misconduct is being overlookedemployer must be fully aware of the wrongful behaviour
Copyright 2011 by Nelson Education Ltd. 21-201
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Other Causes
OTHER BASES FOR TERMINATION WITHOUT NOTICE Harassment including sexual harassment Disruption of corporate culture Consumption of alcohol or drugs in the workplace Drug abuse Each situation must be analyzed on its facts
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Constructive Dismissal
CONSTRUCTIVE DISMISSAL Employer has no entitlement to make a fundamental change to an employment contract without the employees consent
Employer conduct that amounts to a breach of a fundamental term of the employment contract Fundamental term a term that is considered to be essential to the contract Employee may accept the change and create a new employment contract or refuse to accept the change, quit, and sue
Copyright 2011 by Nelson Education Ltd. 21-208
Constructive Dismissal
MINIMIZING THE RISKS OF TRIGGERING A CONSTRUCTIVE DISMISSAL LAWSUIT Questions to consider
Is the change to a fundamental term? Is the change fundamental? Why is the change being made? Will the employee accept the change? Are there contractual provisions that permit the contemplated change? Employers must deal with complaints of bad behaviour
Copyright 2011 by Nelson Education Ltd.
Continued...
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Duty to Mitigate
MITIGATION Duty requires that an employee take reasonable steps to find comparable or similar employment Does not require an employee to take or look for a lower-level job Failure to mitigate will result in a deduction from the damage award
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Termination Settlements
NEGOTIATIONS offer should be fair to employee could include cash, benefits, counseling, and a reference release a written or oral statement discharging another from an existing duty once employee accepts a termination package, it is customary to have the employee sign a release
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Negotiation of Settlement
Termination settlements- costs associated with a wrongful dismissal suit can be high. Employer may offer a termination settlement rather than dismiss for just cause Severance pay- an amount owed to a terminated employee under employment standards Release- a written or oral statement discharging another from an existing duty
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Chapter 23
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Contract of Sale
KEY ASPECTS The terms of the contract relating to the product Remedies for breach of those terms The transfer of ownership of the goods Principles relating to the delivery of the goods
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Contract of Sale
TERMS RELATING TO THE CONTRACT Caveat emptor let the buyer beware or let the buyer take care Sale of goods legislation in Canada- is a specialized branch of contract law. It is governed by legislation and, where the legislation is not relevant, by the common law rules of contract provides a measure of protection for the purchaser
Copyright 2011 by Nelson Education Ltd.
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Legislation
SALE OF GOODS ACT Only applies to the sale of goods: personal property in its tangible, portable form as well as items attached to land that can be severed Protects buyers because it implies terms into a contract for the sale of goods Classifies them and provides remedies to the purchaser based on how the breached term has been classified
Copyright 2011 by Nelson Education Ltd. 23-224
Classification of Terms
TERMS ARE EITHER Conditions important or essential to the purpose of the contract OR Warranties a minor term that is not classified as a condition under sale of goods legislation
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Sale of Goods
TRANSFER OF TITLE Sale of Goods Act sets out a series of rules that determine when title changes in the absence of terms in a contract Specific goods goods that are identified and agreed on at the time a contract of sale is made Unascertained goods goods not yet set aside and identifiable as the subject of the contract at the time the contract was formed
Copyright 2011 by Nelson Education Ltd. 23-231
Sale of Goods
REMEDIES Damages for nonacceptance damages to which a seller is entitled if a buyer refuses to accept goods prior to title shifting Action for the price the sellers claim when the title to the gods has shifted to the buyer
Continued...
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Delivery of Goods
Bill of lading a shipping document that serves as a contract between the seller and the carrier Stoppage in transitu - the right of a seller to demand that goods be returned by a shipper at the sellers expense even after title has transferred, provided the purchaser is insolvent
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The Product
BASIC PRINCIPLES Anything a business sells Includes goods, services, or ideas DESIGN AND MANUFACTURE Governments impose minimum standards for many goods and services where they consider it to be in the public interest to reduce the risk or harm Governments also impose standards for patent protection and product design
Copyright 2011 by Nelson Education Ltd. 23-235
Promotion
INDUSTRY STANDARDS AND LEGISLATION Advertising Standards Canada (ASC) established to promote public confidence in its products and services ASC provides detailed code of industry guidelines Mechanism for public complaints concerning violations of the code, as well as business-tobusiness complaints
Copyright 2011 by Nelson Education Ltd. 23-237
Promotion
Canadian Broadcast Standards Council (CBSC) Specialized codes related to sexual stereotyping and violence The Television Bureau of Canada (TBC) must approve all television commercials before broadcast
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Promotion
FALSE OR MISLEADING ADVERTISING Promotion of goods is regulated by legislation
Promotional statements that either are false or have the ability to mislead a consumer as to their truth Competition Act defines false or misleading advertising
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Competition Act
UNDER THE COMPETITION ACT Prohibited offenses offenses under the Competition Act that are criminal in nature Reviewable matters offences under the Competition Act that are assessed according to a civil burden of proof and resolved by voluntary agreement or by order of the Competition Tribunal
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Competition Act
COMPLAINTS AND DEFENCES Competition Bureau investigates suspected cases of false or misleading Serious offenses may lead to criminal charges Civil track the process by which the Competition Bureau may order a halt to deceptive practices and/or an administrative penalty
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Competition Act
DEFENSES The best defense is that the elements of the offence have not been proven Due diligence a defense based on adopting reasonable steps to avoid the violation of a legal duty
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Competition Act
PERFORMANCE CLAIMS Statements about the performance of a product or a service may fall within the general provisions of misleading advertising It is reviewable conduct under the Competition Act to make a representation about a quality of a product that is not based on an adequate and proper test
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Chapter 24
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Price
PRICING PRACTICES BETWEEN PRODUCER AND COMMERCIAL PURCHASER The federal Competition Act prohibits unfair pricing practices, including those involving the producer and its (commercial) purchaser Objective is to create a level playing field with respect to channel power Channel power the ability of one member of the marketing or distribution channel may exert over one another
Copyright 2011 by Nelson Education Ltd. 24-248
Price
PRICING CONSPIRACIES Competition Act -addresses market manipulation through conspiring with direct competitors to control prices For a criminal offence to be proven, must be established an agreement or a conspiracy to set prices and that the agreement unduly lessened competition and the fact that it unduly lessened competition must be established Penalties include a term not exceeding five years in prison or a fine not exceeding ten million dollars or both
Copyright 2011 by Nelson Education Ltd. 24-249
Price
BID RIGGING Conspiring to fix the bidding process to suit the collective needs of those submitting bids Investigations are common Can take on the form of agreements to submit bids on a rotating basis or to split a market geographically
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Price
ABUSE OF DOMINATE POSITION Reviewable conduct consisting of anticompetitive acts by a dominant company that lessons competition PRICE DISCRIMINATION The offence of failing to provide similar pricing terms and conditions to competing wholesalers or retailers for equivalent volume sales at an equivalent time Criminal offense under the Competition Act
Copyright 2011 by Nelson Education Ltd. 24-251
Price
PREDATORY PRICING The practice of setting unreasonably low prices to eliminate competition Competition bureau refers complaints under the reviewable abuse of dominance provisions to the Competition Tribunal PRICE MAINTENANCE Reviewable conduct because it is an attempt to drive the final retail price of goods upward and impose recriminations upon noncompliant retailers
Copyright 2011 by Nelson Education Ltd. 24-252
Price
PRICING PRACTICES BETWEEN SELLER AND CONSUMER Sale or bargain prices- a reviewable offence for the seller to state that price is less than ordinary (on sale, reduced, clearance) when it is not An advertiser may claim a price to be ordinary if the price reflects items sold at a substantial volume within a reasonable period of time Offered the product for sale in good faith for a substantial period of time
Copyright 2011 by Nelson Education Ltd. 24-253
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Distribution (Place)
DISTRIBUTION- movement of goods and services from producers to customers Includes the process of ensuring that goods get into the consumers hands - that is, shipping and transportation How corporations are structured, including merger decisions resulting in horizontal or vertical integration, is part of the broad notion of distribution
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Organizational Structure
MERGERS, ACQUISITIONS, AND TAKEOVERS Competition Act provides for a two step merger review process Key issue- does merger or proposed merger prevent or lessen, or is likely to substantially prevent or lessen, competition
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Direct Marketing
DOOR-TO-DOOR SELLING The act of selling in person directly to a customers residence typical legislation requires licensing and cooling off periods during which they may cancel the contract TELEMARKETING Retailer advertises a product and makes it available through telephone orders, and outbound calls, where the focus is unsolicited calls to consumers in their homes Deceptive telemarketing is a criminal offence
Copyright 2011 by Nelson Education Ltd. 24-260
Online Sales
ONLINE SALES Applying provisions of the Competition Act Applying privacy legislation Security Application of existing law Establishing principles for protecting e-commerce customers
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