bu231 - fall 2012 final slides
TRANSCRIPT
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BU231 EXAM AID
Tutors: Prasana DevanandCo-ordinator: Rachel Mahal
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Laurier SOS raised over $15 000 last year to
build a primary school in Cero del Padre,Nicaragua. This could not have been done
without generous donations like yours.
Kevin and James are the sons of the
community leader, Jose Domingo. They
became like brothers to the volunteers whoparticipated on this outreach trip.
The affection among their whole family was
inspiring and made the volunteers feel more
than welcome, like they too were part of thecommunity. Laura & Charlie, SOS
Outreach volunteers, 2011
Contact: [email protected] more information about these amazing outreach
opportunities!
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Agenda
Chapters:
15,17,18,24,25,26,27,31 & 32.
Review of concepts, translation fromlegal terms and examples.
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BU231 Chapters 14 and 15
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Breach of Contract
Sometimes it can discharge a contract however a breachmust be of the entire contract or an entire term of acontract which makes performance inadequate
Essential terms are known as conditions
Non-essential terms are known as warranties There are a few types of breaches
Minor: Non-essential term of a contract. It could be a breach of amajor term but of a minor aspect
They can sue but they still have to finish/act out the contract
Major: Breach of the whole contract or an essential term of thecontract where the essential point of the contract is defeated
Non breaching party has the option to 1) Discharge or 2)Continue to bind both parties to the contract
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How a Breach May Occur?
A party to a contract may break it by:
Expressly repudiating its liabilities
I am telling you up front that I cannot perform
Option to non-breaching party: A fine, but they reserve theright to sue OR they can insist on performance and wait till it
comes due They run the risk of an intervening event and losingthe right to sue. It depends on the remedy sought Acting in a way that makes its promise impossible to perform Failing to perform at all, or tendering inadequate performance of
its promise
Whenever breach occurs before time agreed forperformance, it is known as anticipatory breach Can use immediately and does not need to waitfor performance to be due
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How a Breach May Occur?
Party Renders Performance Impossible: Adeliberate or negligent act that makesperformance impossible amounts to repudiation;
Rather than words in express repudiation this is often implied byconduct, such as a form of self-induced frustration
Only a willful or negligent act of the promisorconstitutes a breach of contract, doesnt include
acts that are beyond their control
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Failure of Performance
Usually becomes apparent only when the time forperformance arrives or during performance itself
Doctrine of Substantial Performance / Test forseriousness of breach
States that a promisor is entitled to enforce a contract when it hasbeen substantially performed, even though its promise doesntcomply in some minor way with requirements
Promisors claim is subject to a reduction for damages caused by itsdefective performance
Effect is that a promisor cant seize upon a trivial failure to avoid itsown obligations
For example, when building a house You broke the contract byputting on the wrong shuttersdoesnt entitle you not to payfor the whole house
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Failure of Performance
When the Right to treat a Contract asDischarged is lost
Two situations where an aggrieved party is entitled only to damages:
1) Aggrieved party has elected to proceed with the originalcontract and accept benefits from it despite the breach
2) Aggrieved party may have received benefits and not learned ofthe breach until performance was complete
Possible Criminal Consequences of Breachoccur whenparties break the contract with knowledge that theirbreach will endanger human life, expose valuableproperty, etc.
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(cont)
Exemption Clauses
A clause in a contract that exempts a party fromliability for failing to perform some of all of itscontractual obligations
Firm may insists on an exemption clause, excludingitself from any liability for the risk and transferringthe risk of harm to its customer
Courts have developed techniques to cut down theadvantage of parties drafting exemption clausesNeed to post adequate notice
Strict interpretationsFundamental Breach
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Types of Remedies**
1)
Damages: Primary remedy in contracts
The purpose of an award of damages
Mitigation of Damages
Prerequisites for an Award of Damages
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(cont)
2) Equitable Remedies: Sometimes common law remediesare just not good enough
Equitable remedies are discretionary (must fulfill these
criteria)
Damages are inadequate
Plaintiff must come to court with clean hands
If plaintiff delays unreasonably, court will deny equitableremedy
No innocent third party involved
Will not grant remedy when plaintiff has not paid substantialconsideration for defendants promise (if its seal, you onlyreceive damages)
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(cont)
Specific Performance
Order requiring a defendant to do a specified act, usually tocomplete a transaction
Injunction
Court order restraining a party from acting in a particular manner,such as committing a breach of contract (Also known as a negativecovenant
Interlocutary Injunction: Temporary restraining order
Injunction against an Employee
Mandamus: Opposite of injunction such as apologize
Declaration: A public declaration to demonstrate to thepublic youre right Rescission: Restoring parties to the positions they would
have been before they entered a contract
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Chapter 17
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Def: Transfer of possession of personal property ONLY (notincluding land but can include documents (notes, bonds, stocks,etc.)) without a transfer of ownership
Transferor / owner of property is the bailor Still havepossession, and that the item will go back in the hands ofthe bailor eventually
Party that receives custody is the bailee
Can be contractual or non-contractual, contractual and
involuntary
Bailment
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Benefit of Bailment
A gratuitous bailmentmay benefit both parties such aswhen a car is left with a friend for safekeeping, but the
friend has permission to use it occasionally A bailment for valuecan go both ways as well such as
when a car dealership gives you a car to play with for aweekend (and hopefully buy) so you can enjoy it
Bailment
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The baileehas a duty of care to take care of thepossession
In contract often the terms (express or implied) outlinethe duties and liabilities of the bailee
Exemption clauses written into contracts for liability ofbailees are construed very strictly by the court
If goods are damaged for any reason not related toperformance related to the contract, bailee is notprotected by the exemption clause
The standard of care required by the law of tortsapplies in circumstances not covered expressly orimpliedly by the bailment contract
Liability Under Contract andTort
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Law of bailment places the burden on bailee of showingthey were not negligent, must offer a reasonablealternative explanation (reverse onus) Easier to sue in bailment vs. tort
Eg. You send your car in for repairs and it gets blown upthere, you need only establish the condition of the carwhen you dropped it off, and the condition it was in whenyou received it
(cont)
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A sub-bailee is when a bailee gives the objects toanother person Eg. Lady took her ring to a jewelry store in Sault-Ste
Marie. Jeweler was unable to do the repair on the ring
and gave it to another jeweler in Toronto. The ring wasvalued at $11,000. When the ring was courier, the customof the trade was to list the value as $100. The lady suedeveryone. As bailees (Sub or regular), they all owed aduty to the lady.
(cont)
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Gratuitous bailment for benefit of Bailor
Lowest standard of care is owed on the gratuitous benefitwhere the benefit is to the bailor (Not being paid for the favour No benefit to you, just the bailor)
Bailee should not be under a particularly high duty towardsbailor because the bailee is doing a favour for bailor
Eg. Can I put my car in your garage for the winter?
Gratuitous bailment for benefit of Bailee Bailor receives no consideration, thus the bailee should
compensate the bailor when damage occurs to goods as resultof any slight carelessness
Eg. Can I borrow your lawnmower?
Standard of Care
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Bailment for Value Contractual bailment Standardfails between gratuitous bailment for the bailor andbailee
Falls between the two above where the bailee for value isexpected to take the same care of goods as a prudent and
diligent person should take care of goods Eg. My car will be at your shop while you service it
**Standard of care is higher if product is very valuable, easily stolenand easily damaged**
Standard of Care
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Repair and Storage Liens Act
Liensgive the bailee a right to retain possession ofgoods until the bailor pays what is due for the services
Allows the bailee to retain possession until the bailorpays the price requires.
If they obtain the goods back lawfully without fraud,the right of lien is lost. The rights of possession muststill be in the bailee
Arises only when the service has already been performed andpayment is past-due
Liens
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There is no common law right of sale The only way toget this right is when its under the statue or youcontract for it
For a gratuitous situation, you cannotget the right ofsale
Bailees now have a statutory right to sell the goods Certain time needs to elapse after payment is due (Notice is
set-out Pay up or we are going to exercise our right to sale)
Advance notice must be given to bailor of the intention to sell
Sale must be advertised or held by public auction
Note: The proceeds of the sale first go to reimbursebailee for costs of sale, then the overdue charges, anyin excess goes back to original bailor
Right of Sale (Still in the Liens)
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1)
Storage and Safekeeping Standard of care depends on the circumstances in the contract
but the owner is still required to exercise due care of the goods
Not required to insure unless it is listed in the contract butnormally, insurance sits on the bailor unless the bailor wasnegligent
Not customarily obliged to insure goods against fire, but whenexpressly contracted to do so and they fail, they owe the bailorthe insured value of the goods
Warehouse owners in Canada have a lien on goods, and may sellby public auction
However for professional storages, they have the right of lienbut the lien must be put it in the contract
Special Types of Bailment - STIR
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2) Repairers They are required to effect the repair in proper
manners and expect a due care (It is seen as aprofessional because you are paying for it and peopleare relying on it)
Failure to performance = Breach of contract Bailor is entitled to get back the goods, might not have to pay
for service done and can use for damages
Standard of care is same for warehouse
Ordinarily, a bailor gives repairers implied authority toorder replacement parts unless stipulated in contract
Common law gives the repairers a lien on goods, someprovinces do not allow for sale, but in Ontario, theyallow sale if payment is three months overdue
(cont)
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3) Transportation Gratuitous Carrier Help Andrew move down the street
Private Carrier Move a specific kind of thing and theydont do it all the time, reserve the right to choose their
clients
Common Carrier Move anything anywhere Anyone thatholds themselves out to public as a carrier to get rewardsor payment Holds the highest standard of care: They arean insurer and a bailee. They indemnify the customers
regardless of fault
All three have a duty of care, even the gratuitous care andmust reach the standard of a reasonable person. They mustbe competent and diligent in their line of business
(cont)
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3) Transportation (Cont)
Liability: Shipper (Bailor) need only prove that the carrier received the
goods in condition, and delivered them in bad condition. Unlessotherwise agreed, common carriers are liable for the full valueof the good
Thus, the burden is on the carrier to establish cause of losswithin a recognized defence
Defences against liability: Act of God Fire is not an act of god, unless lightning started
Cannot work as a defense if the carrier took the risk knownabout the potential damage it may cause
Inherent Vice in the Goods Something is wrong with the goodsitself
Default by Shipper Contract contains implied promise that the goods are safe to
carry, thus make the movers pack everything themselves --Implied duty on the shipper that the goods must be safe fortransportation
(cont)
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4) Innkeepers
Innkeepersare any people who maintain aestablishment offering lodging to any member of thepublic As long as you can pay, you can stay there
Must keep the belongings of their guests and patronssafe. They have duty to take reasonable care of theguests belongings They must avoid negligent acts ofthemselves and their employees from suffering fromlost or thief
(cont)
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4) Innkeepers (cont)
The Innkeepers Act limits their liability to $40 andthey must illustrate that they make a contractualagreement with the guests listing the liability to $40
If a customer specifically states that they would wantsomething to safe-keeping, they are fully liable BUTthey are free from liability if they can prove that it wasthe negligence of the guests for their loss
(cont)
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Liability: Innkeepers are typically only liable where the goods have
been stolen, lost or injured through the willful act,default, or neglect of the innkeeper or an employee, orwhere goods have been deposited expressly for
safekeeping
If a hotel refuses to accept a guests goods for safe custodythen it loses the benefit of reduced liability
Burden is on hotel guest (bailor) to demonstratecarelessness of employees
Often less responsible for damages, therefore it is betterto have something stolen than damaged
Only have a lien, some provinces can sell goods Ifthere is no payment, they can take the customersgoods and sell them.
(cont)
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Pawnis a bailment of personal property for securityfor a repayment for a loan where the possession istransferred to the creditor
Borrower is pledgor; creditor is pledgee (eg. Bank,pawnbroker) Pledgee is similar to bailee for value in their exercise of a
standard of care
Pledges of Pawn
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Pledgees obtain liens on the property pledged, andthe pledgor gives authority to the pledgee to sell thepledged goods upon default
They can obtain the costs and debts, but anysurplus funds remaining belongs to the pledgor Same things as the lean-holder
However, pawn actually obtains title of thegood pledged
Must post notice and advertise the final notice to thepledgor After they receive they take title of theitem and can keep all surplus funds
Governed by the Pawn Brokers Act in Ontario
Pledges of Pawn
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Chapter 18
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Nature of an agency
Agency is a relationship in which one person, knownas an agent, is authorized to bring its principalintocontractual relations with third parties
Agents can be people who enter into a contractual
relationship for their principle under the principlesauthority
Very hard to draw the line between the employeesand agents Employees have very limited opportunity to bind their employer to
a contract
They act for the principle An exception to privity rule, allows insurance company to sue you
for default of payment.
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Agents
Dependent Agents Act exclusively for a single principal
Functions of agency and employment may be entirelyseparate, ie. an agent need not be an employee just as anemployee need not be an agent
By law, the employer must give the employee notice Theyhave a vicarious liability
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Agents
Independent Agents Not an employee and acts on behalf ofseveral principals or clients. Eg. Lawyers or stock brokers whoact as agents for their clients when dealing with purchases ofland, buildings, shares
So called real-estate agent does not have authority to sell the
property of a client and thus is not a true agent
Real estate agent can also act on behalf of buyer and sellerwhich creates a conflict of interest
Note: Once a person begins to act as an agent in a particulartransaction, that person is bound by all the duties of acontractual agent.
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Agency relationships
*An agents power to contract on behalf of her principal islimited to the capacity that the principal possesses* Agent and Principal Agency Agreement
Agent act under the principal It is a normal contract
The authority of the agent must be expressly set out inthe agreement If it includes issuing notes and signing checks, they must be in
writing Power of attorney: Able to sign the documents on behalf of the
principle This also must be in writing If there is something not included in the contract, and the
agent has the right to do something similar, it is implied thatthey are able to do the similar thing.
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(cont)
Principal and third party Agent makes contracts between these two parties on
principals behalf
Principal must ratify the contract
If the principal becomes insane or dies, the ratification is
not valid Ratification must be timely and the principal has to interact
with the third party.
A principal need not ratify it expressly, it can do soimpliedly by assuming the benefits of a contract
Conditional acceptance is not ratification
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Estoppel
Apparent Authority In apparent authority, circumstances may make it appear to third parties
that an agent has authority to make the bargain, when in fact they donthave any real authority
Agents may exceed their real authority by venturing into sideline activitiesor act in violation of special restrictions
So when can a principal legally refuse to be bound by a contract? Test is whether a third party should have been aware of the agents
lack of authority, or had reason to be suspicious A third party is expected to act with a reasonable measure of business
acumen and common sense
Presumption of authority of agent.
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Holding Out
When a business impliedly represents someone to betheir agent and will not be permitted to deny theexistence of an agency
It is the responsibility of a principal to inform third
parties that the agency has ended. If not, you arebound by their contracts
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Agent by Necesscity
Agent has to act in dire circumstances and it is notrecognized as legitimate authority
Eg. Neighbours roof collapses
While there may be a moral duty to ratify, as a generalrule our law does not force liability on a person againsthis will
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Duties of Agent to the Principal
1) Duty to comply with the contract Determined by terms, explicitly and implied of the contract Punished by breach of contract Agent has a duty to be diligent in keeping her principal
informed about important developments
2) Duty of Care Agent owes duty of care to principal Reasonable care, diligence and skill when dealing with
transactions of the principal Will depend on their own degree of knowledge, skill and
their task
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Personal Performance
Another duty to principal
Cannot delegate agency status to another party withouttelling the principal
When an agent can act through a sub agent, there is
only privity between:
The agent and sub agent
The principal and the original agent
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Good Faith
Fiduciary Relationship Agents must place the interest of the principal ahead of their
own interest
Duty also requires that an agent inform the principal of anyinformation that may influence the principals decisions
Acting for two principals
Generally not acceptable nor very wise An agent can act for both parties in a transaction if they are aware
of the arrangement and have agreed to it
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Duties of Principal to Agent
Any principal that uses agent implies that theywill reasonably pay the renumeration byquantum merit or whatever was enlisted in thecontract
Translation: You will pay them for their services
You will reimburse their expenses
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Who Is Liable?
An agent should have no liability in a properlyconstructed contract because the contract is betweenthe principal and third party
An agent alone is liable if contracting for an undisclosed
principal, and acts as the principal themselves.
Both are liable if the agent acts as the principal, butthen discovers the actual principal.
Can sue the agent or the principal, but not both.
If real principal is discovered during litigation, can terminatethe lawsuit and sue the real principal.
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Liability for Torts
If agent is guilty of fraudulent misrepresentation, thecontract becomes voidable and the third party mayrescind it
Can also sue for deceit
If the agent was operating within apparent authority,the third party can sue the principal as well as theagent for deceit
Agents can be liable to negligent misrepresentation
because they owe a duty of care to the third party.
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Breach of Warranty of Authority
There is no contract if a person holds themselves out asan agent but has no authority (actual or apparent) andprincipal doesnt ratify
In this case a third party can take the so-called agent to
court for a tort known as breach ofwarranty ofauthority
Damages are awarded to put the third party in theposition in which they would have been if representationwas true.
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Terminating an AgencyRelationship
Authority is terminated when:
End of time specified in the agency agreement
With no specified time, it can be terminated by any party atany time.
If the agency is not ended by insanity or death, then the agencycan still be seen as a parent-authority and the principal may
still be liable to the third party Completion of particular project for which agency was formed Notice by principal or agent that they wish to end the agency
Death or insanity of principal or agent
Bankruptcy of principal
Event that makes the performance of the agency impossible
Loss of capacity
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Relationship of Employer andEmployee
Employment contract is what governs the relationship between theemployer and employee. It is a contractual relationship
Relationship of employer and employee is established by a contractthat gives one party, the employer, the authority to direct and controlthe work of another party, the worker.
Additional terms are implied relating to Common law (termination, notice) Statute (Statutory minimums, workers rights)
Terms of Contract Job Description (from HR)
Provides standard against which to evaluate your performance Rate of Pay Term Option to terminate (discussed later)
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(cont)
Compare with Independent Contractor
If an individual is found to be an independent contractorrather than an employee then the relationship is governed bythe terms of the contract and the general principles ofcontract law
IMPORTANT: You have to look at the whole picture to see ifthey are an independent contractor or an employee Itmakes a difference because the liability of an employee aredifferent from that of an independent contractor
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(cont)
Distinction is important as it affects agency and vicariousliability
When a firm undertakes work as an independent contractor, anyliabilities that it incurs are almost entirely its own, however thecontractor must take reasonable precautions to avoid endangeringthird parties
Injured party sues both the employee and the employer for tortliability because of vicarious liability The employers usually havethe more money
They can be sued because of bad hiring, wrongful referrals,careless references (For one employee to another company),vicarious performance where the person doesnt have toperform personally but it is the employer who remains liable.
Employers have a duty to pay, implied duty of a safe workplace
Employees have a duty to obey any reasonable and lawful request,duty to exercise skill and care in their job, duty of good faith andfidelity to the employer
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Amending Terms of EmploymentContracts
The ability of an employer to amend theterms of the employment contract will beimpacted by the terms of the contract
A unilateral substantial change to animportant term (I.e. salary, job position)can result in constructive dismissal Constructive dismissal - an employee claims
wrongful dismissal based on the unilateralchange of the terms of employment whichamounts to repudiation of the employmentcontract
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Employers Liability
Liability in Contract Employers are held responsible for improper work
done by employees just as a promisor is liable forwork that it subcontracts
Liability in Tort A business is vicariously responsible for damages toany third party for the consequences of any tortthat an employee commits in their course ofemployment
All the injured party need establish is that theemployee caused the damage while engaged attheir work (ie. on-delivery etc)
Employers can still sue the employee if it deems itworthwhile
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Notice of Termination of Ind.Employee Contracts
Most employment contract tend to be continuous in nature, inorder to terminate, a notice is required by both parties to endthe contract
First off, when an employer has hired an employee for a statedperiod of time, and that time has elapsed, no notice of
termination is required In common law, reasonable notice is required and it depends on
the circumstances of each individual
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Notice of Termination of Ind.Employee Contracts
Employment Standards Act They are minimums and notsufficient by common law !Notice = Time = $$
If the hiring is general or indefinite reasonable notice dependson the circumstances of employment In most provinces the minimum length of required notice is
specified by statute, any attempt to undermine this is void !Often 1 wk / year of employment
Allowed to have an option to terminate, terminate you at anytime provided you give me $###,###.00
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Grounds for Dismissal Without Notice(MIDD)
Dismissal without further obligation by the employerwhen the employees conduct amounts to a breach ofcontract (A major term in a major way) and they can suefor damages.
If they tried to terminate for a minor breach, they canbe sued
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Grounds for Dismissal Without Notice(MIDD)
The Contractual Basis An employer need not give notice when it can show that the
employee was dismissed for cause (ie. when an employeesconduct amounts to breach of the contract of employment)
Employer then becomes discharged from any furtherobligations
The courts have classified the breaches into differentbreaches that are accepted grounds for cause ofdismissal
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(cont)
Misconduct
Not cause a economic loss and it must be sufficient that theemployee cannot be trusted.
Anything illegal or immoral that would bring business into publicdisrepute, and or cause employer financial loss are grounds of
dismissal without notice
Disobedience Willfully disrespecting reasonable chain of command, bosswishes
Does not require notice
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(cont)
Incompetence
Expressed term requiring competence
Employee has stated specifically in their resume that theypossess the certain capabilities or that they are licensed =Expressidly stated
It can also be implied that requires a certain skill in the nature
of the job
If the employer does hire someone and discovers that they areincompetent, then the notice is not required to dismiss.
If you have condoned the act, then the Doctrine of Condonationis
applied
You have to give them the opportunity to change and learn thatskill
Cause for dismissal becomes more difficult to justify the longer anemployee is hired for
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(cont)
Illness Frustrating event
Reality is that if it is a serious illness or a recurring illness, it is byfrustration because it is outside of the employers contract
You can fire people, but it looks bad better to hand over toinsurance !You still pay them
You also have a duty to accommodate, if you can accommodate theperson (flex-time, accessibility) you must!
In a layoff condition, the statue states that the employer must givenotice. However, if it a short term layoff (3 months), you dont
have to give notice and giving money or providing them certaintime
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Non-Competition Clauses
Courts are hesitant to enforce these as theyoften violate public policy with respect torestraint of trade
Exceptions are sale of business and employee/employer (trade secrets or using old contacts tobetter yourself)
Terms of clause must be reasonable with
respect to time, geography and the activityitself
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Wrongful Dismissal
Either they didnt cause the breach of contract,they didnt give enough time to train, and theydidnt give notice
The employers defense includes: They weredismissed because of cause, or when adequatenotice is given
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Wrongful Dismissal
Even though the employer has given money insteadof notice, even though it is found after the fact,they can still use to get that money back because of
a breach (Illegal activity, fraud, etc.)
Usually, the employer should keep a file in order toavoid complications when there is a lawsuit Building the document/evidence in the HR file
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(cont)
Damages
For an employee to succeed in an action against heremployer for wrongful dismissal, they must show thatthe employer has broken the contract by failing to give
employee notice they were entitled
As for adequate notice, the courts can believe that theindustry standard isnt enough notice, therefore theygive it themselves. How do they decide?
Task of court is to first determine the length of time
that should have been reasonable given circumstances Employment Standards legislation is just a minimum
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(cont)
Next, court reviews whether bad faith adds to the harmcaused, the court may award extra damages (Wallace v.United Grain)
Finally, the court will consider any other damagesflowing directly from breach, such as the transportationcosts of finding a new job
How the courts will examine the case of the noticeperiod is by the Bardel factorslisted above Howmuch money would they have gained if they ?
Note: Partys injured by the breach of contract are expected to
mitigate their losses by taking other (similar) job opportunitiesif possible
If they didnt mitigate, the amount that they would havegained if they didnt get enough notice and received damages,this amount can be reduced from the damages amount
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Change in Employment Law -IMPORTANT
Realized that some contracts became a personal element Courts have realized that this can apply in employment as well Wallace vs. United Grain Grower
He was promised security till retired He was convinced to takethe job and quit his old one
Shortly after he was hired, his new manager started to harass him
and it became intolerable and Mr. Wallace was fired It was donein a humiliating and high-handed manner This was bad faith fromthe employer
The Supreme Court of Canada stated that the employer acted inbad faith, harshly, cruelly, or high-handedly and the employee hassuffered from terrible mental distress and additional award abovenotice was granted
He didnt get much money but this opened the door
HUMAN ELEMENT MUST BE CONSIDERED NOW IN EMPLOYMENTLAW
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(cont)
Damages that are considered above and beyond noticeinclude: Ruined reputation
Physical health is damaged
Expenses incurred when looking for another job
Equitable Remedies of Reinstatement Symmetry fails but is permitted
Employee can obligate the employer to reinstate them
They allow this because of the impersonal nature of
corporations. They can just them in a differentdepartment
To put people in the position in close and personalrelations in a small company, the courts will not allowthis and they will state that damages is sufficient
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Employee Welfare Legislation
Employee Rights
Human Rights (Human Rights Code Ontario) Cant ask questions during interviews about age, race, gender,
disability, religion, sexual orientation, marital status, family
status, or conviction when a pardon is granted Have to hire people if theyre capable of doing the work
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Employee Welfare Legislation
Newest problem is the wrongful failure to hirewhenyou feel you were discriminated against in some formwhen you really deserved to be hired
Pay Equity
Equal pay for equal work, prohibiting different levels of pay forthe same kind of work in the same establishment
Comparative valuewith respect to skills / training in addition tothe type of work set up a scorecard on different aspects of jobswhen jobs arent identical but have equal value
Trying to amend between women and men, but the changes havebeen really slow and there are still discrepancies
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(cont)
Employment Equity
Employment equity act require employers with over 100 employeesand under the federal jurisdiction based on the Constitution Act toobtain relevant information about personal characteristics of theiremployees in order to determine under-representation ofdesignated groups, results in preferential hiring
They can pick someone over another if they require it to even out
the group Mandatory Retirement
No longer any mandatory retirement in Ontario
Regulation of work conditions (Employment Standard Act)
General work conditions
All provinces now provide annual vacations with pay, statholidays
15 minute break, every 4 hrs
1 yr. Maternity/Paternity leave
Working hours for older people/ No child labour
Minimum wage
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(cont)
Employment Insurance
Employment Insurance act requires employers and employeesto contribute to the government controlled fund that entitlesthe employee to collect these funds they are unemployed
Does not apply to: Retired and self-employed people , peopleworking for their spouse or on strike
Employer must account for all contributions and send them to
the government
Occupational Health (Occupational Health and SafetyAct)
Proactive / preventative approachto preventing dangeroussituations
There are areas that must be considered in employment
situation and now they are talks if the industry or governmentshould control these standards
Firefighters have respiratory problems because of the firethey inhale
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(cont)
Workers Compensation (Workplace Safety & Insurance Act)
No-fault system, keeps employer-employee relationsbetter after injury
All the employer must prove is that the injury was causedby a contributory negligence for the employee and theydont need to pay If the employer can prove that another employee
caused the harm They need to make sure that theyare competent and did training
If there is a voluntary assumption of risk, then theemployer is off the hook Because they accepted
these risks when they took the job
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(cont)
Workers Compensation (cont)
Employers must contribute to the fund which is then usedto pay claims however, if it was willful misconduct on thepart of the employee, then the employee cannot claimfor these funds. However if they become severely disableor die, the family members can still use even if there waswillful misconduct on the part of the employee
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Chapter 24-26
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Sole Proprietorship
Unincorporated business owned by a singleperson
Subject to many regulations common to all
businesses. Must have a license to carry on that type of
business
Must keep proper accounts and tax deductions
Must observe human rights and safetyregulations
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Partnerships
Relation between two or more peoplecarrying on a business with a view to profit
Advantages:
Pool knowledge and skills Physical and financial resources
Disadvantages:
Disagreements & incompetence Lost time in arguments
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The Partnership Act
Partnership rules under a body of law.
Developed over numerous cases supported
by general legal principles
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Nature of a Partnership
Four basic elements to a partnership:1) The partnership relationship
Consentual and contractual agreement
Without written agreement, found to be partners ifthey have acted as such
2) Between persons
3) Business Nature
4) Profit Motive
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Legal Nature of a Partnership
Legal Personality Partnership has no independent existence
Adding/subtracting partners makes a new partnership
Continuing Relationship
Partnership assumed to continue Can make express terms for adding/subtracting partner
Property No partner owns the property, each have an interest
Creditors Cannot distribute wealth until creditors are paid
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Creation of a Partnership
Partnership Agreement
An agreement between persons to create a partnership usuallysetting out the terms of the agreement
Partnership comes into existence by the agreement, explicit orimplied
Deals with: Identity of partners
Name of firm
Nature of business
Duration of relationship
Method of termination Etc
Limited partnership formed by registration
Do not have to register if partner names are in company title.81
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Liability of a Partner
Contractual liability
Agency Principles Every partner is an agent of the firm & other partner
Joint Liability If firm is sued, both partners are liable
If one partner is sued, can be indemnified by the firm andcan then sue co-partner personally
Apparent Partners
For partner to leave firm, must have novation (waiver) of allother partners and must notify creditors.
Breach of Trust Similar to vicarious liability, firm is liable for partners actions82
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Termination of a Partnership
Express Provision
Agreement includes a provision to terminate thepartnership
Implied Statutory Rules
Without express provision, Partnership law has:Termination by notice or expiry
Termination on death of insolvency
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Partnership Dissolution by Law
A court can dissolve a partnership if:
A partner is found to be mentally incompetent
A partner becomes permanently incapable ofperforming his part of the agreement
A partner has been guilty of conduct likely toprejudicially affect the business
A partner commits a breach of the agreement
It is just and equitable that the partnership be dissolved
84
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Effects of Dissolution
Must sell off all assets in partnership, paycreditors, then divide surplus betweenpartners.
Sequence of payments is: Payment of the debts of the firm owed to non-partners
Repayment of loans made to the firm by partners
Repayment of capital contributed by partners Sharing any surplus among the partners according to
their entitlement to share in profits
85
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Joint Ventures
A business venture undertaken by two ormore parties (usually companies)
Comes in two forms:
Contractual Joint Venture
Does not create a separate legal entity
Equity Joint VentureCreate a jointly owned corporation owned by both
companies Ability for recourse changes with each
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Limited Partnerships
Covered under the Limited Partnership Act A partnership in which some of the partners limit their
liability and amount of capital contributions
General Partner One who has unlimited liability, and takes part in the day to dayfunctions of the business.
Limited Partner
Has limited liability to the amount invested in capital. Cannot takepart in the day to day functions.
If a limited partner interferes with the day to dayfunctions too frequently, he can be sued as a generalpartner. 87
Limited Liability Partnerships
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Limited Liability Partnerships(LLP)
A partnership in which non negligentpartners are not personally liable for lossescaused by the negligence of a partner
Used primarily for professional organizations
Limits fiduciary duty of partners to the onewho breaches/creates the error
88
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Chapter 27
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Corporations
Corporations create some of their own rulesin their bylaws and articles.
Differ from other forms of companies on:
IdentityLiability
Transfer of Ownership
Participation in Management
Continued Existence
Separation of Ownership and Management
Fiduciary Duty
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Corporations - Identity
Have a separate identity, recognized as alegal person
Legal Person:An entity recognized by law as having its own legal
personality and having rights and duties of its own.
Distinct from natural person (human being)
Corporation: A legal person formed by incorporationaccording to a prescribed legal procedure
91
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Corporations - Liability
Liability of owners (shareholders) is limitedto the amount of their capital contribution
Large advantage to incorporation
92
Corporations Transfer of
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Corporations Transfer ofOwnership
Allowed to sever ownership, unlike soleproprietorship and partnerships
Ownership is transferred without issue by
simply selling shares
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Corporations - Management
In partnerships, each partner can be an agentfor the company.
Corporation owners cannot contract for thecompany
Officers/management contract for the company
Management in corporations is delegated to anelected board of directors
Separation of ownership and management allowsshareholders to receive a return on theirinvestment without risking loss further than theirinitial investment.
94
Corporations Continued
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Corporations ContinuedExistence
Partnerships, if a partner dies or leaves thepartnership is dissolved
Corporations exist on their own irrespectiveof death or sale of an owners share
95
C i Fid i D
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Corporations Fiduciary Duty
Shareholders owe no fiduciary duty to thecompany
Company owes no fiduciary duty to theshareholder.
However, managers must still act in good faithto the shareholder
96
Consequences of Separate Legal
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Consequences of Separate LegalPersonality
A corporation can only act through its human agent. The question then arises whether the agent had authority
to contract.
Saloman vs Saloman
The one man company States that employees assets have nothing to do with the
corporation
The agent is not liable for anything if acting in good faith
Exceptions are:
CBCA
Bankruptcy and Insolvency Act
Lifting the Corporate Veil97
E ti t Li it d Li bilit
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Exceptions to Limited Liability
Canadian Business Corporations Act If a dividend payment is made without any profit,
shareholders are liable for other debts
Bankruptcy & Insolvency Act
Receiving payment from a property right before bankruptcy,may have to repay amount paid to them.
Lifting the Corporate Veil Sometimes courts will disregard incorporation to lift the
veil and get to assets.
Must:
Control the corporation
Exercise control to commit a wrong
Cause injury to plaintiff98
M th d f I ti
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Methods of Incorporation
Corporations Act Letters patent
Ontario Business Corporations Act (OBCA)
Canada Business Corporations Act (CBCA) Both state articles of incorporation and bylaws
99
I ti P
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Incorporation Process
CBCA/OBCA
Articles of Incorporation:
Corporation name/number
Head office
Share structure/class
Number of directors Type of business
Corporation Bylaws: Who the officers are/how the company runs
Qualify as a director
Calling a meeting
Notices Quarum (# of people necessary to make a meeting legally functional)
Signing authority
Job description of officers
Dividend process 100
T f C ti
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Types of Corporations
Public Widely held, shares are traded by those of the
general public
Private
Closely held, shares cant be offered to the publicand there are no more than 50 shares. All corporations start this way
Professional Corporation
Special type of corporation formed by members ofthe professional community (doctors, lawyers, etc)
101
R i i C it l
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Raising Capital
Equity Issue shares
Initially has par value at prospectus date
Preferred shares vs common shares
Dividends, share repurchases and restructuring
Debt
Bonds and debentures
Options and redemption dates
102
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Chapters 31 and 32
E C
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E-Commerce
The delivery of information, products, servicesand payments by telephone, computer or otherautomated media.
Largest percentage of transactions are from
business to business
Not just the internet
E-Commerce Act (2000)
Rules on forming a contract
Consumer Protection Act
Same rules that protect online consumers 104
Establishing an Online Business
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Establishing an Online Business
Negotiate a Web site development agreement
Negotiate a Web site hosting agreement Usually with an internet service provider
Liability for interruption of service
Negotiate internet access agreement with the internetaccess provider
Register a domain name (trademark issues)
Want security and reliability among service 105
E-Commerce Contracting
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gIssues
Acceptance Capacity
Proof
Jurisdiction Amending Contract
106
Accepting Online Contracts
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Accepting Online Contracts
Click Wrap vs Browse Wrap Click Wrap: Having an I agree button for
terms and conditions
Browse Wrap: Having terms and conditions on aseparate page that the user needs to navigateto
For exemption clauses, click wrap is easierto prove case as it is more difficult for theplaintiff to browse past.
107
Online Capacity & Proof Issues
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Online Capacity & Proof Issues
Issues with proving capacity. What if the person is under 18?
What if they did not mean to click the button?
Must prove requisite intent and capacity topurchase an item. Which is very difficult todo.
Proof that it was the plaintiff thatpurchased is difficult to find.
108
Jurisdiction Issues
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Jurisdiction Issues
If the seller is in Ontario, but the buyer is inTexas, where is the case heard?
Different laws from different areas mean
that each side may want the case to betried in a different area.
Court decides where the dispute will be heardand which laws and rules will be used.
109
Amending an Online Contract
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Amending an Online Contract
Kanitz v. Rogers Cable Kanitz sued for poor service. Rogers countered
by saying that there was a term that forcedbinding consumer arbitration.
Outcome was Ontario government placed a newlaw saying binding consumer arbitration is avoid legal term.
Proves that amending an online contract isdifficult.
110
E Commerce Tort Issues
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E-Commerce Tort Issues
Negligent Misrepresentation Cannot misrepresent product in order to gain a sale.
Must have knowledge of product
Fraud
Intentional deceit is punishable in the same way as aphysical sale
Defamation
Defamation for inflammatory comments on your site
Possible defamation for linking to a site withdefamatory statements
Duty to protect clients information
Privacy 111
E-Commerce Intellectual
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Property Issues
Copyright Infringement Easier to prove as it is written and available online
Conversion of Intellectual Property
Covers patented information transferred to the internet
Trademark Infringement
Under the tort of passing off
Cybersquatting
Address or name.
Using someone elses trademark to gain popularity/hitsfor your website.
I.E. If I used studentsofferingsupport.com to sell mygoods 112
Copyright
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Copyright
The right or ownership that exists in original worksof authorship in any medium of expression.Includes literary, musical, etc
Protects expression, not the idea.
Allowed to build on an original idea, but protectsprofiting off of the original idea.
Works for published or unpublished work, as longas it is copyrighted.
Exists for the life of the author + 50 years Remedy is damages ($$$) or injunction (halting
production)113
Trademarks
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Trademarks
Distinctive mark used to distinguishproducts or service.
Can be a word, name, symbol, package, etc
Needs to be registered
Under the tort of passing off
Intentionally using another idea and makingyours similar to profit.
114
PIPEDA
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PIPEDA
Personal Information Protection andElectronic Documents Act
Information includes any personal informationthat is used for identification (name, address,etc)
Imposes restrictions on the use and misuse ofpersonal information
Applies to every organization that collectsinformation.
115
PIPEDA II
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PIPEDA II
Limits on collection and consent for information:
Collection: Cannot collect more information than is needed.
Must be able to explain why you are collecting it
Consent
Need to have written consent for the collection and use of theinformation you take
Use of information Can only use information for the purpose it was collected
Disclosure
Must tell the person if you are sharing it with someone else
Security
Must keep the information safe
Must appoint person for policy, check accuracy and research breaches116
Conducting International
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Business
Three basic types, each has different lawsyou need to follow
Export/import
Licensing Direct Foreign Investment
Branch Plant
Foreign Subsidiary
Joint Venture
117
Export/Import Issues
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Export/Import Issues
Proper law of the contract Intent, which laws are used
Common understanding of terminology
Commercially accepted standard
Currency
Price, payments, countertrade
Time
Dispute resolution
118
International Business Contract
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Issues
Delivery Issues
Delivery (responsibility and risk)
EXW (ex works seller released at warehouse)
FOB (Free on board)
Buyer arranges own shipper and seller delivers to buyers carrier
CIF (cost, insurance, freight paid for)
DDP (delivery and duty paid)
119
International Business Contract
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Issues II
Jurisdiction Where the lawsuit is commenced and heard
Standing Does the plaintiff have the right to start an action in the
jurisdiction (I.E. Canadian in the US?) Choice of Law
Which law of the contract will be applied (Canadian vs USlaw)
Enforcement
Collection, assets in the jurisdiction, recognition of foreignjudgements
Recognition is bringing claims and assets from otherjurisdictions to your own 120
Commercial Arbitration
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Commercial Arbitration
Sometimes used to settle international businessdisputes.
Voluntary and must be stated in original contract
Advantages:
Pick the arbitrator and panel (no home advantage)
Speed & cost are better
Agree on enforcement (both agree to honouroutcome)
Disadvantages:
No appeal (decision is final)
Bound by outcome of agreement 121
International Legislation
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International Legislation
GATT General Agreement on Tariffs and Trade
Gives member countries goods and services most favourednation status
NAFTA North American Free Trade Association Regional free trade area & dispute resolution
WTO World Trade Organization
Dispute resolution process between countries. Appoints ajudicator to see if there was a breach in the agreement.
If a breach, the country that suffers can retaliate122
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That is the END!Thank you so much for your support!
So study hard and good luck!