BUAD 808-BUSINESS AND COMPANY LAW

Module 1: Basic Concept and Tools

Study Session 1: Introduction (Law, its Administration and Enforcement)
✓ ITQ: What is a law?
✓ ITA: A law consist of a set of rules which are known or readily discoverable by those who must obey them.
✓ The Rule of law is an essential doctrine of the British constitution. It is not a written code of rules but a
general principle implicit in the common law which the courts will apply, unless some statute can be quoted
modifying its application. It has three important aspects:
o a. No person can be punished except for a definite breach of the law, established in the ordinary
law courts of the land.
o b. No person is above the law and everyone must bear the legal consequences of his own acts, i.e.
there is equality before the law.
✓ Schools of Legal Thoughts
o Legal Positivism: Law as Sovereign Command: Positivism is a philosophical movement that claims
that science provides the only knowledge precise enough to be worthwhile. Law is only law, in
other words, if it comes from a recognized authority and can be enforced by that authority, or
sovereign - such as a king, a president, or a dictator - who has power within a defined area or
territory.
o The Natural Law: that law should be based on a universal moral order. Natural law was
“discovered” by humans through the use of reason and by choosing between that which is good
and that which is evil
✓ Nature of Law
✓ Some philosophers have postulated the existence of natural law by which they mean the Law of God which
regulates the actions of mankind. This concept is often known as the principles of natural justice.
✓ ITQ: What are the types of law?
✓ ITA: Imperative law, Physical or Scientific law, Natural or Moral law, Conventional law, customary law,
International law, Civil law and Administration law.
✓ Sources of Law:
✓ There are numerous sources of law, including constitutions, legislatures, executives, judiciaries,
administrative agencies, and international organizations.
✓ Sources of Law may be classified into formal or material, and the latter further Subdivided into historical,
legal, authoritative and binding, or other sources.
o Formal Source: Where does the Constitution derive its power? The general will and power of the
people of Nigeria. This is the Ultimate Source. It can be traced to the “common consciousness” of
the people, or the “Divine Will.”
o Material Source: We are concerned here with the origin of the substance of the law – Where the
law derives from or the authoritative source from which the substance of the law has been drawn.
✓ ITQ: Define Business Law?
✓ ITA: Business law is also known as commercial law which deals with the creation of new businesses and the
issues that arise as existing business interact with the public, other companies and with the government.

✓ Functions Of Business Law:

✓ Keep the peace, (b) maintain the status quo, (c) preserve individual rights, (d) protect minorities against
majorities, (e) promote social justice, and (f) provide for orderly social change. Some legal systems serve
these purposes better than others.
✓ Organization Of Court:
o 1. House of Lords - (where civil and criminal appeals are heard)
o 2. Court of Appeal (Civil and Criminal Divisions) - Again, this court hears civil and criminal appeals.
o 3. Divisional Courts - Two or more High Court judges may convene to hear appeals from inferior
courts
 o 4. High Court of Justice - This consists of the Queen’s Bench Division
o 5. Crown Court
o 6. County Courts - These courts deal exclusively with civil cases involving smaller claims of less legal
complexity.
o 7. Magistrates’ Courts -where petty cases are heard
✓ Personnel of the Court
o Lord Chancellor: This officer is the chief peer of the realm acting as Speaker of the House of Lords.
o Lord Chief Justice: This officer is the head of the common law side of the High Court of Justice.
o Master of the Rolls: This is the custodian of the public record and by virtue of his office he is a
member of the Court of Appeal.
o Judges: Judges of the family court division should be assigned from among the judges of the highest
court of general trial jurisdiction.
o Referees; judicial officers: Only judges should perform judicial case decision-making functions.
o Court administrator: Assists judges
Study Session 2: Dispute Settlement
✓ Dispute Settlement:
✓ ITQ: What are the means of dispute settlement?
✓ ITA: They are: Negotiations, Consultations and Exchange of views.
✓ Procedure for settling Disputes
✓ First stage: consultation (up to 60 days).Parties consult each other and sometimes consult WTO to mediate
✓ Second stage: the panel (up to 45 days for a panel to be appointed, plus 6 months for the panel to
conclude). If consultations fail, the complaining country can ask for a panel to be appointed.
✓ The main stages under second stages are:
o Before the first hearing: each side in the dispute presents its case in writing to the panel.
o First hearing: The case for the complaining country and defense
o Rebuttals: The countries involved submit written rebuttals and present oral arguments at the
panel’s second meeting.
o Experts: If one side raises scientific or other technical matters, the panel may consult experts or
appoint an expert review group to prepare an advisory report.
o First draft: The panel submits the descriptive (factual and argument) sections of its report to the
two sides, giving them two weeks to comment. This report does not include findings and
conclusions.
o Interim report: The panel then submits an interim report, including its findings and conclusions, to
the two sides, giving them one week to ask for review.
o Review: The period of review must not exceed two weeks. During that time, the panel may hold
additional meetings with the two sides.
o Final report: A final report is submitted to the two sides and three weeks later, it is circulated to all
WTO members. If the panel decides that the disputed trade measure does break a WTO agreement
or an obligation, it recommends that the measure be made to conform to WTO rules. The panel
may suggest how this could be done.
o The report becomes a ruling: The report becomes the Dispute Settlement Body’s ruling or
recommendation within 60 days unless a consensus rejects
✓ Appeals:
✓ Each side can appeal the panel's ruling, they cannot re-examine evidences or examine new findings. Each
appeal is heard by three members of a permanent seven-member Appellate Body set up. The appeal can
uphold, modify or reverse the panel’s legal findings and conclusions. Normally appeals should not last more
than 60 days, with an absolute maximum of 90 days. The Dispute Settlement Body has to accept or reject
the appeals report within 30 days — and rejection is only possible by consensus.
✓ After a case has been resolved, the losing party must state its intention to comply by the rulings at a
Dispute Settlement Body meeting held within 30 days of the report’s adoption.
✓ Court Problems and Proposed Solutions:
 o There are also various less formal means for proffering solutions to problems collectively called
alternative dispute resolution (ADR).
o Arbitration: Ruling is binding and final
o Mediation: Mediates between parties and offer suggestions
o Conciliation: Advising both parties together
o ITQ: What are the methods used for closure of disputes?
o ITA: The variety of methods includes arbitration, mediation, and conciliation, to bring about
agreement or at least closure of the dispute.
Study Session 3: Law of Contract
✓ ITQ: What is a contract?
✓ ITA: A contract in the legal sense is a form of agreement which a particular person will recognize as legally
binding.
✓ The Law of contract consists of two parts:
o The General Part: contains provisions relating to the foundations of obligation relations (contracts
and torts): their origin, the effect, and termination
o The Special Part: Special Part is composed of various kinds of contracts.
✓ A third party cannot sue or be sued in a contract even if the contract is made on his behalf.
✓ Consensus ad idem is an agreement of parties to the same thing: as a meeting of minds.
✓ ITQ: What is Consensus ad idem?
✓ ITA: It is an agreement of parties to the same thing, as a meeting of minds. It is the coming together of two
minds with a common intention
✓ The Basis of Contract:
o The Will Theory - The basis of contract is the will of the parties (meeting of the minds of the
parties). If one party is in error as regards one of the vital elements of the agreement there is no
real agreement.
o Declaration Theory - According to this theory the basis of an agreement is not the underlying will of
the parties but the will of the parties as manifested in their actions.
o Reliance Theory: If there is a material mistake by one party or both and therefore no actual
consensus, the reliance theory acknowledges that there is a contract if one of the parties, in a
reasonable manner, relied on the impression that there was consensus.
✓ Principles and Nature of Law of Contract
✓ Offer; Acceptance; Consideration; Intention to create legal relations; Capacity.
✓ Offer: Announcement to enter into a contract
✓ ITQ: What are the ways in which an offer may be terminated?
✓ ÍTA: Revocation, Death, Lapse of time and Rejection.
✓ Acceptance: An acceptance is an unequivocal final expression by the offeree that he agrees to the terms of
the offer as conveyed to him by the offeror.
✓ Consideration: Consideration must include something of value given and received by each party.
✓ Intention to Create Legal Relations: Not every agreement is intended to create a legally binding
relationship. For example, most domestic agreements —such as the division of household chores —would
not constitute a contract recognized in law.
✓ Capacity: This is the capacity of parties involved in a contract, e.g. minors are exempted from certain
contracts
✓ The Concept of Bargain
✓ A bargain is an agreement of two or more persons to exchange promises, or to exchange promise for a
performance.
✓ Consideration may be either:
o a. Positive: e.g. Promise to give, to pay, to do, or
o b. Negative: to e.g. promise not to do something one is entitled to do; to suffer a forbearance or
loss.
 ✓ Unequal Bargaining Power: The fact that parties involve in contracts might have different bargaining power
doesn’t render the agreement void.
✓ Unconscionable Bargains: This can arise when there is unequal bargaining power. Oppression and
misconduct can take place.
✓ ITQ: What are the building blocks of a contract?
✓ ITA: They are: Offer, Acceptance, Consideration, Intention to create legal Relations and Capacity.
✓ Forms of Contract
✓ Contracts supported by consideration are essentially expected to be in writing. It is, however, important to
note that a contract may also be oral or implied and yet be binding.
✓ Contracts that must be in writing (i. Transfer of shares in a public company, ii. Marine insurance, iii. Hire
purchase agreements, iv. Bills of exchange, v. Promissory notes.)
✓ Contracts which must be evidenced in writing (Contracts of guarantee, Contracts for the sale of an interest
in land.)
✓ Classification Of Contract:
✓ Formal: A formal contract is a contract made by deed/seal
✓ Simple: All contracts other than formal ,may be written or oral
✓ Express and Implied: A contract is said to be expressed when the terms are clearly stated and implied
contract, when the terms are not so stated
✓ Bilateral and Unilateral: Bilateral when both parties are obliged to exchange services, Unilateral when only
one party is obliged
✓
✓ ITQ: What are the classification of contract?
✓ ITA: Formal contract, Simple contract, Express and implied contract & Bilateral and
✓ Unilateral contracts.
Study Session 4: Sale of Good
✓ Title to Goods
✓ A document of title to goods is one which entitles and enables its rightful holder to deal with the goods
represented by it, as if he were the owner. It is used in the ordinary course of business as proof of
ownership, possession or control of goods, e.g. cash memo, bill of lading.
✓ Price: The price means the money consideration for transfer of property in goods from the seller to the
buyer.
o The price may be expressly stated in the contact.
o The price may be left to be fixed in manner provided in the contract.
o Where the price is neither expressed in the contract nor there is any provision for its determination,
it may be ascertained by the course of dealings between the parties.
o It may be a ‘reasonable price’.
✓ A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in
goods to the buyer for a money consideration, called the price.
✓ Classes of Goods:
✓ Existing Goods and Future Goods.
✓ The goods which form the subject of a contract of sale may be either existing goods owned or possessed by
the seller, or goods to be manufactured or acquired by him after the making of the contract of sale, in this
Act called future goods”.
✓ Goods can also be:
o Specific: goods identified and agreed on at the time a contract of sale is made.
o Ascertained: goods identified by both parties, e.g. “two of those bottles of port.” In the Act, they
are treated as specific goods.
o Unascertained: goods are not defined by the Act, not identified as at the time of the agreement
✓ ITQ: Mention the classes of goods
✓ ITA: Existing goods, Future goods, Specific Goods, Ascertained good and unascertained goods.
 ✓ ‘Doctrine of caveat emptor’ or ‘let the buyer beware’. This applies to all sale contracts invariably, except in
following cases:
o When the buyer makes known to the seller the particular purpose for which he requires the goods
and relies on the seller’s skill and judgment.
o When the goods are sold by description by a manufacturer or seller who deals in goods of that
description, the seller is bound to deliver the goods of merchantable quality.
o When the purpose for which the goods are purchased is implied from the conduct of the parties or
from the nature or description of the goods, the condition of quality or fitness for that particular
purpose is annexed by the usage of trade.
o When the seller either fraudulently misrepresents or actively conceals the latent defects.
✓ Performance of a sale contract: Performance of a sale contract implies, as regards the seller to deliver the
goods, and as regards the buyer to accept the delivery and make payment for them, in accordance with the
terms of the contract. Unless there is a contract to the contrary, delivery of the goods and payment of the
price are concurrent conditions and are to be performed simultaneously.
✓ Hire: A contract of hire is a contract under which a person bails or agrees to bail goods to another by way of
hire.
Module 2: Internal and External Influences of consumer behavior
Study Session 5: Agency and Employment
✓ “He who does an act through another is deemed in law to do it himself.”
✓ If one person authorizes another to do an act on his behalf, that other becomes the agent of the first.
✓ Agency law often involves three parties—the principal, the agent, and a third party. It therefore deals with
three different relationships: between principal and agent, between principal and third party, and between
agent and third party.
✓ Principal - The “principal” is the person who agrees, expressly or by implication that another shall do an act
for and on his behalf, and that he shall be legally bound by that act.
✓ Agent - An agent is the person who acts on behalf of his principal, and binds his principal in law. An agent is
a person who acts in the name of and on behalf of another, having been given and assumed some degree
of authority to do so.
✓ Agency - Agency is a relationship which exists between two legal persons– the principal and the agent – in
which the function of the agent is to form a contract between his principal and a third party.
✓ Authority - The authority of an agent is the act(s) and thing(s) which he is permitted or is authorized to do
by his principal, and which will bind the principal.
✓ The common law provides six reasons why the principal may be bound by contracts made by the agent. The
reasons are:
o 1. Actual Express Authority: The principal has entered into an explicit agreement with the agent
authorising him to take particular action.
o 2. Actual Implied Authority: The principal has entered into an explicit agreement to employ the
agent, and although he has not specifically authorised the particular action at issue, the agent can
reasonably infer that authority for that action has been delegated to him.
o 3. Apparent Authority: The principal has no agreement with the agent authorising the action, but a
third party could reasonably infer from the principal's conduct that the agent was authorised.
o 4. Estoppel: The principal is "estopped" from objecting to the agreement made by the agent if the
principal could have intervened to prevent the confusion over authority; e.g., if the principal
overheard the agreement being made and failed to assert that the agent was unauthorized.

o 5. Ratification: If no other authority exists, but the principal agrees to the contract once he learns
about it, this ratification binds the principal. If the flour salesman has no authority to sell wheat, but
he makes a contract anyway, that contract is binding if the flour company agrees to it upon learning
of the salesman's actions.
o 6. Inherent Agency Power:
 ✓ Types of Agents:
o General Agent: Manages all affairs of principal
o Special Agent: Special affairs of the principal
o Mercantile Agent: In the customary course of business has authority to sell or consign goods for
sale, or to buy goods or to raise money on the security of goods.
o Broker: who ‘negotiates contracts for the sale and purchase of goods and other property but does
not have possession of the goods’.
✓ Authority of the Agent
o Express authority, implied authority and actual authority.
✓ Other Types of Relationship
o Master and Servant, Independent Contractor and Partnership
✓ ITQ: How can an agency relationship raise?
✓ ITA: An agency relationship can raise by express agreement or by implied agreement.
✓ ITQ: What are the duties of Contractual Agents
✓ ITA: Duty to Perform, Duty to obey instructions, Trade or Professional Custom, Duty to Perform the
Contract with Diligence.
✓ ITQ: What are the Fiduciary Duties of all Agents?
✓ ITA: Duty to Make Full Disclosure, Dealing with the Principal, Secret Profits and Bribes, Using his Position as
Agent to acquire Personal Benefit, Using Property of the Principal to Acquire a Benefit or Profit for Himself,
Money Received for Principal’s Account, Accounting Requirements and Acquiring Principal’s Property in his
Own Name.
✓ Rights of Agents against Principals; payment of fees

Study Session 6: Hire Purchase

✓ ITQ: What is the meaning of a hire purchase?
✓ ITA: Hire purchase is a mode of financing the price of the goods to be sold on a future date.
✓ A hire purchase agreement is defined in the Hire Purchase Act, 1972 as peculiar kind of transaction in which
the goods are let on hire with an option to the hirer to purchase them, with the following stipulations:
o Payments to be made in installments over a specified period.
o The possession is delivered to the hirer at the time of entering into the contract.
o The property in goods passes to the hirer on payment of the last installment.
o Each installment is treated as hire charges so that if default is made in payment of any installment,
the seller becomes entitled to take away the goods,
o The hirer/ purchase is free to return the goods without being required to pay any further
installments falling due after the return.
✓ Contract of Sale of Goods: A contract of sales of goods is a contract whereby the seller transfers or agrees
to transfer the property in goods to the buyer for a price. It includes both an actual sale and an agreement
to sell. Essential Ingredients of a Sale: A contract of sale is constituted of following elements:
o a. Two parties: namely the buyer and the seller, both competent to contract to effectuate the sale.
o b. Goods: The subject matter of the contract.
o c. Money consideration: price of the goods.
o d. Transfer of ownership: of the general property in goods from the seller to the buyer.
o e. Essentials of a valid contract under the Indian Contract Act.
✓ Sales versus Bailment: In sales, goods are transferred to the buyer and he can do whatever he likes with the
goods, in bailment, goods (possession of goods) are leased from bailor to Bailee.
✓ A mortgage is a transfer of interest in the goods from a mortgagor to mortgagee to secure a debt.
✓ A pledge is a bailment of goods by one person to another to secure payment of a debt.
✓ A hypothecation is an equitable charge on goods without possession, but not amounting to mortgage.
✓ A hire purchase agreement is a kind of bailment whereby the owner of the goods lets them on hire to
another person called hirer, on payment of certain stipulated periodical payments as hire charges or rent.
✓ Hire Purchase Agreement: The important clause in the agreements are;
 o Nature of Agreement: Stating the nature, term and commencement of the agreement.
o Delivery of Equipment: The place and time of delivery and the hirer’s liability to bear delivery
charges.
o Location: The place where the equipment shall be kept during the period of hire.
o Inspection: That the hirer has examined the equipment and is satisfied with it.
o Repairs: The hirer to obtain at his cost, insurance on the equipment.
o Alteration: The hirer not to make any alterations, additions and so on to the equipment, without
prior consent of the owner.
o Termination: The events or acts of hirer that would constitute a default eligible to terminate the
agreement.
o Risk: of loss and damages to be borne by the hirer.
o Registration and fees: hirer bears all costs.
o Indemnity clause: The clause as per Contract Act, to indemnify the lender.
o Stamp duty: Clause specifying the stamp duty liability to be borne by the hirer.
o Schedule: of equipment forming subject matter of agreement.
o Schedule of hire charges. The agreement is usually accompanied by a promissory note signed by the
hirer for the full amount payable under the agreement including the interest and finance charges.
✓ Terminologies:
o (a) Debtor: The debtor is the person who receives credit
o (b) Creditor: This is the person or organisation supplying the credit.
o (c) Supplier: This is the person who, or organisation which, supplies goods or services which are the
subject matter of the credit.
o (d) Credit: Credit is defined (in S.9 (1)) as a “cash loan or other financial accommodation”.

✓ ITQ: What are the types of credit?

✓ ITA: Running account credit, Debtor-Creditor-Supplier agreement, Credit Token agreement, Consumer hire
agreement and Exempted agreements.
Study Session 7: Instrument Negotiable and Notes
✓ A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on
demand, or at a set time, with the payer named on the document.
✓ ITQ: What is negotiation?
✓ ITA: Negotiation is the process of transferring the instrument to someone who is not one of the original
parties to it.
✓ ITQ: What are the kinds of negotiable instruments?
✓ ITA: Bills of exchange, Cheques, Promissory notes.
✓ Difference between Bill Of Exchange and Promissory Note:
o (1) Parties.: There are three parties to a bill of exchange, namely, the drawer, the drawee and the
payee; while in a promissory note there are only two parties – maker and payee.
o (2) Nature of payment. In a bill of exchange, there is an unconditional order to pay, while in a
promissory note there is an unconditional promise to pay.
o (3) Acceptance.: A bill of exchange requires an acceptance of the drawee before it is presented for
payment, while a promissory note does not require any acceptance since it is signed by the persons
who is liable to pay.
Study Session 8: Insurance
✓ Insurance is a form of risk management in which the insured transfers the cost of potential loss to another
entity in exchange for monetary compensation known as the premium.
✓ Insurance policy is a contract (generally a standard form contract) between the insurer and the insured,
known as the policyholder, which determines the claims which the insurer is legally required to pay.
✓ An insurance contract is an arrangement in which one party, the insurer, accepts significant insurance risk
from another party, the policyholder, to compensate the policyholder if a specific uncertain future event
impacts the policyholder.
✓ Risks- Life is full of risks, some are preventable or can at least be minimized, some are avoidable and some
are completely unforeseeable.
✓ The characteristics of an insurance transaction are
o • Pooling of resources
o • Accumulation of funds;
o • Distribution of funds to those who have losses;
o • Transfer of risk from one person to the group; and
o • Spread of risk among all members of the group.
✓ The primary benefits of insurance include:
o • payment of losses;
o • economic growth;
o • credit support;
o • loss prevention; and
o • peace of mind.
✓ Insurance Terminologies
o Insurer: This is the insurance company
o Insured: The person or company transferring the risk of loss to a third party through an insurance
policy.
o Insurance Rider/Endorsement: An attachment to an insurance policy that alters the policy's
coverage or terms.
o Insurance Umbrella Policy: When insurance coverage is insufficient, an umbrella policy may be
purchased to cover losses above the limit of an underlying policy.
o Insurable Interest: In order to insure something or someone, the insured must provide proof that
the loss will have a genuine economic impact in the event the loss occurs. Without an insurable
interest, insurers will not cover the loss.
✓ ITQ: What is a warranty?
✓ ITA: A warranty is a guarantee given by the seller to the buyer about the quality, fitness and performance of
the product.
✓ What are Conditions?
✓ Conditions are terms, obligations and provisions imposed by the buyer and seller while entering into a
contract of sale, which needs to be satisfied. The conditions are indispensable to the objective of the
contract.
✓ Types of Condition:
o a. Expressed Condition: The conditions which are clearly defined and agreed upon by the parties
while entering into the contract.
o b. Implied Condition: The conditions which are not expressly provided, but as per law, some
conditions are supposed to be present at the time of making the contract.
✓ Key Differences between Condition and Warranty:
o A condition is an obligation which requires to be fulfilled before another proposition takes place. A
warranty is a surety given by the seller regarding the state of the product.
o Condition is vital to the theme of the contract while Warranty is ancillary (supporting)
o Breach of any condition may result in the termination of the contract while the breach of warranty
may not result in the cancellation of the contract.
o Violating a condition means violating a warranty too, but this is not the case with warranty.
o In case of breach of condition, the innocent party has the right to terminate contract as well as a
claim for damages. On the other hand, in breach of warranty, the aggrieved party can only sue the
other party for damages.
✓ ITQ: What are the types of authority?
 ✓ ITA: Implied Authority, Actual or Implied Authority & Apparent or ostensible authority.
Module 3: Consumers Decision Making
Study Session 9: Business Organization
✓ Sole Proprietorship: This is one of the forms of business organisation. It is a type of business unit where
one person is solely responsible for providing the capital and bearing the risk of the enterprise, and for the
management of the business.”
✓ Characteristics of Sole Proprietorship:
✓ Single Ownership, b. No Separation of Ownership and Management, c. less Legal Formalities, d. No
Separate Entity, e. No Sharing of Profit and Loss, f. Unlimited Liability, g. One-man control
✓ Merits Of Sole Proprietorship: Easy to Form and Wind Up, Quick Decision and Prompt Action , Direct
Motivation, Maintenance of Business Secrets, Personal Touch (relationship with employee and customers)
✓ Limitations of Sole Proprietorship: Limited Resources, Lack of Continuity, Unlimited Liability, Not Suitable
for Large Scale Operations, Limited Managerial Expertise.
✓ Partnership is an association of two or more persons who pool their financial and managerial resources and
agree to carry on a business, and share its profit.
✓ Characteristics of Partnership:
✓ Two or More Persons, Contractual Relationship, Sharing Profits and Business, Existence of Lawful Business,
Principal Agent Relationship, Unlimited Liability & Voluntary Registration.
✓ Merits Of Partnership: Easy to Form, Availability of Larger Resources, Better Decisions, Flexibility, Sharing Of
Risks, Keen Interest, Benefits of specialization, Protection of Interest, secrecy
✓ Limitations of Partnership: Unlimited liability, Instability, Limited Capital, Non-transferability of share
&Possibility of Conflicts.
✓ Types of partners:
o Based on the extent of participation (Active or Sleeping partners)
o Based on sharing of profits, the partners may be classified as ‘Nominal Partners’ and ‘Partners in
Profits’.
✓ ITQ: What is the minimum and maximum number of people in a partnership?
✓ ITA: Minimum two members are required to form a partnership. The maximum limit is ten in banking and
20 in other businesses.
✓ ITQ: What is a corporation?
✓ ITA: A corporation is the dominant form of the business enterprise in the modern world, it is bound by laws
because it is a legal entity.
✓ Corporations can finance by selling freely transferable stock to the public or by incurring debt.
✓ Steps towards the formation of a corporation:
o Step 1: Choose a business name
o Step 2: Choose a business entity Type
o Step 3: Choose a state(Location for HQ too) and get the following: Business License, State License,
Federal License, TIN and Certificate of good standing
✓ General Sources of Corporate Funds:
o Plowback: is simply reinvesting earnings in the corporation.
o Debt Securities: borrowing through debit security such as bond.
o Equity Securities: (selling stocks)
✓ Other Forms of Funds Sourcing:
o Private equity, which involves private investors providing funds to a company in exchange for an
interest in the company.(venture capital)
✓ Classification of Corporations
✓ There are four major classifications of corporations:
✓ non-profit,
✓ municipal (public or governmental)
✓ professional,
✓ Business. Business corporations are divided into two types,
 o publicly held (shares are sold to the public)
o closely held corporations(shares held by limited and closely related people not more than 30)
✓ The Securities and Exchange Commission: The SEC’s fundamental mission is to ensure adequate disclosure
in order to facilitate informed investment decisions by the public.
✓ ITQ: What are the forms of business organization?
✓ ITA: They are: Sole Proprietorship, Partnership and Corporations.

9.3.2.2 Study Session 10: Torts of Importance to Business

✓ Torts are wrongful acts against an individual, a company or their property that gives rise to a civil liability
against the person who committed them. Torts are one of the two major branches of private obligations;
the other being contract law.
✓ Nature of Torts of Importance to Business:
✓ 1. Trespass to land (one or more of the following :( Entering land that is owned by the plaintiff, remaining
on the land. Placing objects or projections onto the land)
✓ 2. Nuisance: This occurs when occupant of land causes damages to the neighboring occupiers. This can be
Public or Private;
o Private Nuisance is the 'unlawful interference with a person's use, or enjoyment of land. Cases of
private nuisance often involve neighbors and are caused by noise, smell, vibrations, animals, trees
and incursions by other such items.
o Public Nuisance: Examples include obstructing the highway, takeaway restaurants creating litter,
and raves' that attract hundreds of people late at night creating noise and disturbance to a wide
area. They are criminal offences.
✓ 3. Trespass to the person: The acts of battery, assault and false imprisonment are commonly considered
within the scope of trespass to the person.
o Battery - Battery involves the intentional bringing of a material object into contact with another
person.
o Assault - Assault is the intentional act of putting another in reasonable fear or apprehension of
immediate battery. Telling someone you want to shoot them is not assault until a gun is pointed at
them.
o False imprisonment - False imprisonment involves unlawfully arresting, imprisoning or preventing a
person from leaving from where they are.
✓ 4. Defamation: The expression or publication of false or defamatory statements that is not lawfully justified
are known collectively as defamation. In other words, defamation involves the ridicule of an individual or
holding them in contempt.
The words libel and slander are often used to describe this tort.
o Libel refers to visible acts such as writing, pictures and even effigies.
o Slanderous acts are those that are spoken or gestured.
✓ 5. Deceit, injurious falsehood and 'passing-off': Deceit is a wrong whereby the plaintiff is misled into taking
actions that are to his detriment.
A typical example of deceit is the con-artist who encourages an individual to pay him money for goods that
he has no intention of supplying.
✓ 6. Negligence: The number of actions under negligence far exceeds the number under the other torts. In
simple terms the carelessness of an individual or company causes damage (physical, emotional or
economic) to the plaintiff. Negligent acts tend to be inadvertent or reckless, but not normally intentional.
✓ ITQ: The nature of tort can best be understood by examining examples of tort, what are those examples?
✓ ITA: Trespass to land (Entering, Remaining & Placing), Nuisance (Private and Public), Trespass to person
(Battery, Assault & False imprisonment), Defamation, Deceit, injurious falsehood and 'passing-off’ and
Negligence.

✓ Kinds of Torts: There are three kinds of torts:

 o a. Intentional torts
o b. negligent torts,
o c. and strict liability torts.
✓ ITQ: What is the purpose of tort law?
✓ ITA: The purpose of tort law is to compensate the victim for harm actually done.

9.3.2.3 Study Session 11: Labor Relations

✓ ITQ: What is Labor relations?
✓ ITA: Labor relations, commonly referred to as labor-management relations is a collective bargaining and
relations of all types between workers and employers, and between workers and workers, personnel
administration, worker supervisory training. It involves everything that has to do with the atmosphere and
climate of the workplace.
✓ However, the labor relationship encompasses divergent interest parties such as:
o Managers (representing employers)
o Employer’s associations’ representative
o Individual employees whose part in the system has been overshadowed by collective interests
which unions represent.
o Trade union representatives
o Government representatives
o Representative of the law.
✓ Trade Unions are voluntary organization of Workers as well as Employers formed to protect and promote
the interest of their members. They are the most suitable organizations for balancing and improving the
relations between the employer and the employees.
✓ What do trade unions do?
o Trade unions speak on behalf of their members.
o Trade unions provide members with information, advice and guidance about work-related
problems.
o Trade unions provide members with a range of services including training, insurance, financial
services and legal advice.
o Trade unions bargain with employers to get better pay for members.
o Trade unions campaign on particular issues, for example low pay, discrimination and bullying.
9.3.2.4 Study Session 12: Preventive and Regulatory Law
✓ Preventive Law is a legal approach in which the lawyer is proactively involved in managing client legal
affairs. The concepts of preventive law and the management of risk, are illustrated by six general beliefs:
✓ Preventive law is generally defined as a programme, supported by policies, procedures, and regulations,
that endeavors to minimize the risk of litigation or to secure, with more certainty, legal rights and duties.
✓ Properties: The law defines property as rights among people that concern things. In other words, property
consists of a package of legally recognized rights held by one person in relationship to others with respect
to some thing or other object. For example, if you purchased this book, you might reasonably believe that
you own “the book.” But a law professor would explain that technically you own legally-enforceable rights
concerning the book. For example, the law will protect your right to prevent others from reading this
particular copy of the book.

✓ Real property consists of rights in land and anything attached to land (e.g., buildings, signs, fences, or
trees). It includes certain rights in the land surface, the subsurface (including minerals and groundwater),
and the airspace above the surface.
✓ Personal Property- are Items of tangible, visible personal property—such as jewelry, livestock, airplanes,
coins, rings, cars, and books—are called chattels. Virtually all of the personal property in feudal England fell
into this category. Exceptions include human body parts and Animals in the wild.
 ✓ Intangible Personal Property: Rights in intangible, invisible “things” are classified as intangible personal
property. Stocks, bonds, patents, trademarks, copyrights, trade secrets, debts, franchises, licenses, and
other contract rights are all examples of this form of property.

✓ Sales and Consumer Protection: This Act applies to the offering, selling and other marketing of consumer
goods and services by businesses to consumers.
✓ Regulatory Techniques in Consumer Protection:
o mandatory pro‐consumer arrangements, which must be part of every consumer contract;
o mandated disclosure;
o regulation of entry to and withdrawal from contracts; and
o Pro‐consumer default rules and contract interpretation.

✓ Intellectual Property: Intellectual property refers to creations of the mind: inventions; literary and artistic
works; and symbols, names and images used in commerce.
✓ David Bainbridge defines intellectual property as that area of law which concerns legal rights associated
with creative effort or commercial reputation and goodwill.

✓ Intellectual property is divided into two categories:

o Industrial Property includes patents for inventions, trademarks, industrial designs and geographical
indications.
o Copyright covers literary works (such as novels, poems and plays), films, music, and artistic works.

✓ Intellectual property rights are like any other property right. They allow creators, or owners, of patents,
trademarks or copyrighted works to benefit from their own work or investment in a creation.

9.3.2.5 Study Session 13: Internet and International Law

✓ ITQ: What is cyber warfare?
✓ ITA: The term “cyber warfare” refers to warfare conducted in cyberspace through cyber means and
methods.
✓ Cyber Warfare refers to warfare conducted in cyberspace through cyber means and methods.
✓ How is Cyber warfare Unique? It keeps changing with technologies and cross boundaries. It is not national
specific.
✓ Cyberspace not being subject to geopolitical or natural boundaries, information and electronic payloads are
deployed instantaneously between any point of origin and any destination connected through the
electromagnetic spectrum.
✓ Cyber Operation or Computer Network Operation (CNO) refers to the reduction of information to
electronic format and the actual movement of that information between physical elements of cyber
infrastructure.
✓ Cyber operations can be categorized as
✓ Computer network attack (aiming to disrupt, deny, degrade, or destroy information resident in computers
and computer networks, or the computers and networks themselves)
✓ Computer network exploitation (enabling operations and intelligence collection to gather data from target
or adversary automated information systems or networks)
✓ Computer network defence (actions taken to protect, monitor, analyze, detect, and respond to
unauthorised activity within information systems and computer networks)
✓
✓ Cyber Operations and Jus ad Bellum: The jus ad bellum is that body of law which governs the resort by
states to force in their international relations. Today, the most important source of jus ad bellum is the UN
Charter.
✓ Cyber Operations as “Force”: According to article 2(4) of the UN Charter, “all Members of the United
Nations shall refrain in their international relations from the threat or use of force against the territorial
integrity or political independence of any state, or in any other manner inconsistent with the Purposes of
the United Nations”.