Chapter 1: Risk Management and Sources of Law

Solving a Legal Question:

● What are the facts?
○ Read carefully and understand the facts as they determine the relevance of any legal
points you make later
● What are the relevant legal issues?
○ What do we want to determine
○ Ex. is the contract enforceable? has a tort been committed?
● Discuss the law relevant to the issue
○ Refer to supporting legal arthritis
○ Is there a legal test, rule or criterion that applies to a statue or legal precedent?
● Apply the law to the facts
○ Determine the likely decision
● Decisions are not simply the personal opinion of the judge

Law:
● Law is essential to any society
○ Both shapes and reflects how people interact
○ Governs the most important issues that arise in between

Why Study Law?:

● The law describes, defines and intrudes on every aspect of life and business is no exception
○ Business decisions have legal consequences
■ Ex. negative → dumping pollutants into the water

■ Ex. positive → facilitating enforceable agreements

Risk Management:
● Risk management is the process of identifying, evaluating and responding to the possibility of
harmful events
Nature of Law:
● All laws are rules but not every rule is a law
○ It is much more difficult to determine whether a rule is also a law
● Moral wrongs are informally punished
○ Ex. damaged friendships
● Legal wrongs are formally punished
○ Ex. fines or imprisonment
● Laws are rules enforced by courts
● Law reflects a unique way of reasoning
○ It is not simply what the judge decided was “right” or “wrong”
○ The decision must be based on statute and/or binding legal precedent

Maps of the Law:

●
● Canada → civil law (Quebec) vs. common law (rest of Canada)

● Canada → criminal law and constitutional law same across Canada

● Canadian law can be organized and categorized in various ways:
○ There are substantive differences between certain types of law
■ Ex. criminal law vs. civil law
○ There are different sources of the law
■ Ex. statute law vs. common law, federal law vs. provincial law

●
● Legislation is the law enacted by Parliament and the provincial and territorial legislatures
● Common law is the body of legal rights and obligations arising out of judges’ rulings
● The Canadian Constitution is the supreme law
○ All other laws must conform to the requirements of the Constitution
■ The Constitution Act, 1867
● Describes Canada’s government framework
● Describes the distribution of powers among the federal government,
provinces and territories
● Describes how law are enacted (made)
■ The Constitution Act, 1982
● Confirms and enshrines basic rights and freedoms of Canadian in the
Charter of Rights and Freedoms

●
● Public law
○ The rights and obligations of Canadians to their governments (federal, provincial,
municipal)
○ Concerned with governments and the ways in which they deal with their citizens
■ Constitutional law
● Provides the basic rules of the political and legal systems
● Determines who is entitled to create and enforce laws and it establishes
the fundamental rights and freedoms that Canadians enjoy
 ■ Administrative law
● Concerned with the creation and operation of administrative agencies,
boards, commissions and tribunals
● Has a profound impact on business
■ Criminal law
● Deals with offences against the state
● Concerned with people who break rules that are designed to protect
society as a whole
○ White-collar crimes
■ Committed by people in suits
■ Ex. manager who steals money from the petty-cash
drawer
○ Corporate crimes
■ Ex. used-car dealership adopting a policy of rolling

back the odometers on the vehicles → the company is

guilty of fraud
■ Tax law
● Concerned with the rules that are used to collect money from public
spending
● Private law
○ The rights and obligations of Canadians in dealing with each other
○ Rules governing private dealings or matters

○
■ Contract law
● Creation and enforcement of contracts/agreements
○ Purchase and sale of products/goods
○ Negotiable instruments (cheques)
○ Real estate transactions (purchase of land)
○ Employment (between business and workers)
● Contracts lie at the heart of business world
 ● They are the way business is conducted
■ Tort law
● A private wrong (in contrast to criminal law, which is a wrong against
the state)
● May be deliberate (intentional tort → assault and false imprisonment) or

a consequence of carelessness (negligence → one person carelessly

hurts another)
● Includes business torts (ex. conspiracy, deceit)
■ Property law
● Acquisition, use and disposition of property including
○ Real property (land, buildings)
○ Personal property (moveable items)
○ Intellectual property (inventions, creations, books, music,
software, etc.)

●
● These categories are not mutually exclusive
● An event or fact situation can give rise to both tort and criminal liability

Canadian Constitution:
● The constitution is the dominant source of Canadian law
 ● It establishes Canada’s system of government, including the division of powers between the
federal government and the provinces and territories
● It establishes and confirms the essential rights and freedoms of all Canadians through the Charter
of Rights and Freedoms
● It is founded on two discrete statutes:
○ The Constitution Act, 1867
○ The Constitution Act, 1982

The Constitution Act, 1867:

● Historical development
○ Canada’s original Constitution was the British North America Act, 1867, (U.K.) (”BNA
Act”)
○ The BNA Act granted Canada’s independence from the UK
○ It created Canada, as it then existed, out of Ontario, Quebec, New Brunswick and Nova
Scotia
○ It provided for the future admission of Prince Edward Island, Newfoundland, British
Columbia, Rupert’s Land and the North-Western Territories
○ The BNA Act determined Canada to be a federal state and established the division of
powers between the federal and provincial governments [ss. 91 and 92]