LGST 369 Commercial Law FINAL EXAM STUDY AHEAD TIPS Athabasca University, Exams of Commercial Law

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LGST 369 Commercial Law FINAL EXAM STUDY AHEAD TIPS Athabasca University LGST 369 Commercial Law FINAL EXAM STUDY AHEAD TIPS Athabasca University Similarities of crimes and torts - --- torts and crimes often arise out of the same facts/ actions - common history Torts and crimes differences - --- torts are private law, defendant owes obligation to plaintiff, plaintiff sues the defendant, defendant pays compensatory damages - crimes are public law, defendant owes obligation to society, government prosecutes defendant, defendant is punished Intentional torts - --occur when people intentionally act in certain ways Negligence torts - --occur when a person acts carelessly Strict Liability torts - --occur when a person does something wrong without intending to do so and without acting carelessly - it is enough that the defendant was responsible for the situation that resulted in the plaintiff's injuries Vicarious liability - --occurs when one person is held liable for a tort that was committed by another person - employees create risk of vicarious liability Independant Contractor - --a worker who is not closely connected to the employer's business as an employee Determining an independent contractor - --- control duty of care - --exists if the defendant is required to use reasonable care to avoid injuring the plaintiff the duty of care controls - --the scope of liability under the cause of action in negligence factors of duty of care - --- reasonable foreseeability - proximity - policy reasonable foreseeability - --whether a reasonable person in the defendant's position would have recognized the possibility that their activities might injure the plaintiff proximity - --there must somehow be a close and direct connection between the parties proximity allows - --a court to look at all of the circumstances before deciding whether or not it would be appropriate to recognize a new duty of care types of proximity - --- social relationship - commercial relationship - direct causal connection - reliance on representation policy - --is concerned with the effect that a duty of care would have on the legal system and on society generally policy factors - --- floodgates - politics - vulnerable relationships reasonable person - --- the reasonable person is a fictional character of normal intelligence who makes prudence a guide to his conduct and who acts in accord with general and approved practice - the standard of care tells the defendant how to act and is based on the reasonable person test professional negligence - --- a professional must act as a reasonable professional would act in similar circumstances - professional standards - specialists - novices but-for test - --- the but-for test determines if the defendant was partially responsible for the plaintiff's loss - the but-for test requires the plaintiff to prove that they would not have suffered a loss but for the defendant's carelessness contributory negligence - --a legal defence for when a loss is caused partly by the defendant's carelessness and partly by the plaintiff's own carelessness - situation - accident - damage three essential elements of most contracts - --- obligation is voluntarily created by the parties - privity is enforceable only by or against a party to the contact - compensatory damages are forward looking offer vs. invitation to treat - --- the distinction between an offer and an invitation to treat depends on the reasonable person test - did the person mean to create a separate contract every time an acceptance is received offer - --- an indication of a willingness to enter into a contract on certain terms - contract comes into existence as soon as offer is accepted invitation to treat - --- an indication of a willingness to receive an offer - invitation for others to make offers an offer may cease to exist by - --- revocation (offeror withdraws) - lapse - death or insanity - rejection - counter-offer firm offer - --- an offer that the offeror has promised to hold open for a certain time - offeror can still revoke at any time firm offer cannot be revoked if - --- offeror's promise was placed under seal - if offeree paid an option collateral contract - --a separate agreement one party makes in exchange for the other party's entry into the main contract interpreting express terms - --- literal approach - contextual approach - golden rule (ordinary meaning unless absurd) - contra preferemtem rule six parties that lack capacity - --- minors - mentally incapacitated persons - intoxicated persons - corporations - associations - Indian bands and aboriginals voidable contract with minor - --contract is voidable if minor is entitled to avoid the legal obligations that the contract would have otherwise created enforceable contract with minor - --contract is enforceable if minor affirmed it corporation acting beyond its capacity - --- if a statutory corporation attempts to contract in a way that exceeds its statutory powers, it acts ultra vires (beyond its capacity/authority) - any agreement is unenforceable contracts that must be evidence in writing - --- guarantee - contracts for the sale of an interest in land - contracts that are not to be performed within a year writing requirements - --- contract must be in writing or there must be sufficient evidence of it - document must provide evidence of essential elements of contract and be signed by both parties effect of non-compliance - --- contracts unenforceable unless evidence in writing - no remedy available if party does not perform undue influence - --- abuse of a relationship in order to influence someone and induce an agreement - presumption of undue influence if there is a fiduciary involved unconscionable transaction - --- an agreement that no right-minded person would ever make and no fair-minded person would ever accept - presumption of unconscionable transaction if there was an improvident bargain (no proper regard to future) and inequality in bargaining power of parties discharged contract - --- a contract is discharged when a party is relieved of the need to fulfill any more promises condition subsequent - --a contractual term that states that the agreement will be terminated if a certain event occurs true condition precedent - --A contractual term that states that an agreement will come into existence only if and when a certain event occurs. condition precedent - --a contractual term that states that while a contract is formed immediately, it does not have to be performed unless and until a certain event occurs breach - --occurs whenever a party does not perform precisely as promised condition - --- a term is a condition if a breach would substantially deprive the innocent party of the expected benefit of the contract - innocent party can affirm or discharge contract warranty - --- a term is a warranty if a breach would not substantially deprive the innocent party of the expected benefit of the contract - innocent party cannot discharge contract but can claim damages for any losses suffered intermediate or innominate term - --- a term is intermediate if depending on the circumstances a breach may or may not substantially deprive the innocent party of the expected benefit of the contract defective performance - --- occurs when a party fails to properly perform an obligation due under a contract - deviation is a specific type of defective performance three types of breach - --- defective performance - self induced impossibility - anticipatory breach - hard to raise money general partnership - --- a form of business organization that comes into existence when two or more people carry on business together with a view to profit - partnership automatically arises by operation of law when a relationship meeting these criteria begins key elements of partnership agreement - --- name - membership (criteria on admission or expulsion) - capitalization (financial contributions) - profits (how will profits be shared) - management - dissolution (when can partner dissolve membership) limited partnership - --- a partnership in which the personal liability of at least one partner is limited to the amount of the partner's investment in the business - comes into existence when filed with government authority limited partnership conditions - --- employees can be limited partners, not general partners - lose limited liability if they participate in controlling the business or allow their name to be used in firm name sole proprietors and partners - --carry on the business, own the property of the business, possess its rights, and are responsible for its liabilities directly, which shareholders are not incorporation process - --- a corporation is created only when certain documents are filed with the appropriate government office - once incorporated, company is governed by laws of jurisdiction where incorporation occurred incorporation steps - --- articles of incorporation - name search report on the proposed name of corporation - paying the fee organizing a corporation - --- directors named in articles must have meeting and pass resolution issuing shares to shareholders - directors usually adapt a general bylaw (arrangements for carrying on formal business) - bylaw must be passed by directors then shareholders - creation of shareholders agreement (contract between shareholders that customizes their governance agreements) corporate separate legal existence - --- corporation itself carries on business, owns property, possesses rights, and incurs liability - shareholder can be an employee or creditor of the corporation - corporation is unaffected if shareholder dies or withdraws - treated as separate tax payer corporate division of powers - --- shareholders elect a board of directors to manage or supervise the management of the corporation - directors delegate the responsibility of managing the corporation to the officers that they appoint - directors then monitor and supervise the officers' management of the corporation's business corporate governance structure - --- shareholders vote for large decisions, do not participate in managing the business of the corporation - directors are responsible for managing the business of the corporation and its internal affairs, issuing shares, declaring dividends, and calling shareholder meetings - officers are appointed by directors and usually exercise substantial management powers delegated to them by the directors - shareholders elect directors, directors appoint officers conflict of interest - --- arises when a fiduciary considers taking advantage of some opportunity in which the corporation has an interest - arises when a director or officer contracts with the corporation legal standard of care in decision making - --- directors must have basic understanding of business - directors must keep informed - business judgement rule director liability - --- directors may be liable for up to 6 months of employee wages where the corporation does not pay (bankruptcy) directors and officers are not liable if - --- they reasonably rely on financial statements or reports of lawyers or other professionals