Chapter 1 - Risk Management and Sources of Law Flashcards
1
Q
What is Law?
A
A law is a rule that can be enforced by the courts.
2
Q
What is Risk Management?
A
Is the process of identifying, evaluating, and responding to possible harmful events, in other words avoiding loses.
3
Q
Step 1 of Risk Management?
A
Identification, identify the risks and consider liability. Are you legally responsible and can you be sued?
4
Q
What is liability?
A
The state of being responsible for something, especially by law.
5
Q
Step 2 of Risk Management?
A
Evaluation: Evaluate the risks and their probabilities, how serious are those risks
6
Q
Step 3 of Risk Management?
A
Response: formulate a response from an informed decisions, how you react
7
Q
What are Risk Management Strategies?
A
Avoidance, Reduction, Shifting, Acceptance
8
Q
What is Risk Avoidance?
A
Eliminate risk, avoid risk all together.
ex: withdraw dangerous product from market
9
Q
What is Risk Reduction?
A
Minimize/decrease risk, reduce risks to an acceptable level through precautions.
ex: modify produce to reduce danger
10
Q
What is Risk Shifting?
A
Shift/transfer risk onto another party.
ex: buy liability insurance for losses caused by the danger
11
Q
Strategies for Risk Shifting?
A
Insurance and exclusion clauses
12
Q
What is Risk Acceptance?
A
When appropriate to accept/tolerate a risk, often when likelihood is insignificant and if the consequence isn’t detrimental
ex: Do nothing
13
Q
What is an independent contractor?
A
Person who performs services on behalf of a company, but who is not a regular employee of that company
14
Q
What does Vicariously liable mean?
A
A company is vicariously liable for the actions of its employees but not for independent contractors
15
Q
What are Risk Management Techniques
A
Insurance, Exclusion and limitation clause, incorporation
16
Q
What is Insurance as a risk management technique?
A
A risk may be reduced and shifted by contracting for an INSURER’S PROMISE TO PAY if a loss occurs.
17
Q
What is the Exclusion and limitation clause as a risk management technique?
A
A risk may be reduced or eliminated by contracting for a right to LIMIT OR EXCLUDE LIABILITY.
18
Q
What does incorporation mean?
A
A risk may be reduced by conducting business through a company. To prevent being personally liable for any debts or liabilities incurred by the business, a business will be set up as a corporation or company
19
Q
What is a Contract?
A
A legal concept that allows people to create enforceable promises
20
Q
What is Insurance?
A
An insurance policy is a type of contact involving two parties: one is the insured, the other is the insurer
21
Q
Who is the insured?
A
The party that promises to pay a price, called the premium
22
Q
Who is the insurer?
A
Promises to pay a certain amount of money if the insured suffers a certain type of loss
23
Q
What is liability insurance?
A
Provides a benefit if the purchaser is held liable for doing something wrong. Liability insurance creates a duty to defend
24
Q
What is a duty to defend?
A
The insurance company is responsible for the litigation, including the costs of hiring lawyers, if its customer is sued by a third party
25
What is Property Insurance?
Provides a benefit if the purchaser's property is damaged, lost, or destroyed
26
What is the Exclusion and limitation clause?
Within contracts, the clause is a contractual term that changes the usual rules of liability. Subject to certain rules and restrictions
27
The Exclusion and limitation clause may attempt to:
Exclude all risk of liability, Exclude liability for certain types of acts or certain types of losses, Limit the amount of compensation that is available
28
How can a company attempt to exclude or limit liability when there isn't a written contract?
When parties conducting business do not create a written contract, a company may post a notice somewhere on its premises, attempting to exclude or limit their liability
29
What is the benefit of incorporation?
Limited liability, meaning that usually the company itself rather than the directors or shareholders may be held liable for debts
30
Exception to limited liability?
Limited liability does not protect individuals from all risks, can still be held personally liable for the torts they commit (employees, directors, etc.)
31
What is in-house counsel?
Instead of hiring lawyers when the need arises, a company may create its own permanent legal department. Provides more efficient risk protection
32
Benefit of in-house counsel?
In-house counsel have inside knowledge of their company, they are able to both prevent problems from arising and resolve disputes that do occur
33
What is the Nature of Law?
There is a distinction between moral obligations and legal obligations but it's becoming blurred. Moral issues can arise even if a rule is identified as a law
34
What is Civil Law?
The source of law is codified. When a case is presented to a judge the judge goes to the section within the “rule book”.
35
What is Common Law?
A common body of law that incorporates precedence and case law. Consider how issues have been dealt with in other cases
36
What is precedence?
Consider what is the law and how it's been broken Consider how did past judges treat it in different cases
Until laws are changed, precedence’s will stay
37
History of Civil law?
Traces history to Ancient Rome, only civil law jurisdiction in Canada is Quebec (having developed its law from France)
38
History of Common Law?
Trace history to England. Most of Canada
39
What does jurisdiction mean?
A geographical area that uses the same set of laws
40
What is Public Law?
Governs the relationships between individuals and the government
41
What forms of law is included in Public Law?
Constitutional law, Criminal Law, Administrative Law and Tax Law
42
What is Constitutional Law?
Provides the basic rules of our political and legal systems. Determines who is entitled to create and enforce laws, and establishes the fundamental rights and freedoms of Canadian citizens.
43
What is Administrative Law?
Concerned with the creation and operation of administrative agencies, boards, commissions, and tribunals. The government delegates responsibilities to these various bodies
44
What is Criminal law?
Deals with offences against the state. Concerned with people who break rules that are designed to protect society as a whole
45
Difference between committing a tort and committing a crime?
Committing a tort: have done something wrong to someone else personally
Committing a crime: done something wrong to the entire community
46
What is a crime?
A public wrong, an offence against society as a whole
47
Difference between corporate crimes and white-collar crimes
Committed by a company and Committed by business individuals
48
What is Tax Law?
Concerned with the rules that are used to collect money for public spending
49
What is Private law?
Concerned with the rules that apply in private matters.
50
What forms of law is included in Private Law?
Tort law, Contract Law, Property Law
51
True or false Private Law can apply to the government?
True, it is possible for a private person to sue a public body (and vice versa). The government is subject to private law rules when it enters into private transactions
52
What is a tort?
A private wrong, an offence against a particular person
53
What is Tort Law?
Involuntary rules governing wrongs against persons including: Intentional torts, business torts, and negligence
54
What is intentional torts?
A civil wrong resulting from an intentional act on the part of the tortfeasor (alleged wrongdoer)
55
What is business torts?
A civil wrong that is committed by or against an organization. ex: deceit, conspiracy, fraud, defamation
56
What is negligence torts (unintentional torts)?
Not deliberate actions, when an individual or entity fails to act as a reasonable person to someone whom he or she owes a duty to
57
What is Contract Law?
Voluntary rules governing creation and enforcement of agreements. Contracts governs transactions
58
What is Property Law?
Involuntary rules governing voluntary acquisition, use, and disposition of property
59
What are the categories of Property Law?
Real property, personal property, and intellectual property
60
What is real property?
Involves land and things that are attached to land
61
What is personal property?
Involves things that can be moved from one place to another.
62
What is intellectual property?
Involves things that consist of original ideas, such as patents and copyrights
63
What is the law of succession?
Deals with the distribution of a person's property after death
64
What is the law of trusts?
Deals with a situation in which one person holds property on behalf of another
65
True of false: Different areas of law can overlap?
True, there are at least two possibilities: Alternative Analysis and Multidisciplinary Contexts
66
What is Alternative Analysis?
Can be sued for multiple things and therefore require multiple sets of rules
67
What is Multidisciplinary Contexts?
Some situations involve various types of laws (administrative law, tort law and criminal law)
68
What are the Sources of Law?
Includes a hierarchy of sources: the Constitution, Legislation, the Courts
69
What is the Constitution?
A document that creates the basic rules for Canadian society
70
What section of the Constitution must every law by compatible with?
Every law implemented must be compatible with Section 52 of the Constitution
71
True or False, laws can be changed?
True, laws can be changed by a legislature or a court
72
True or False, the Constitution can be changed?
True, but requires a special amending formula. Requires the consent of Parliament plus the legislatures of at least two-thirds of the provinces, where those consenting provinces represent at least 50 percent of the Country's population
73
What are the divisions of Powers in Canada?
Canada is a federal country, that has two levels of government : Federal and (Provincial and Territorial)
74
What does the divisions of Powers mean?
Subject to two sets of laws: both federal and provincial (or territorial)
75
What is outlined in Section 91 and 92 of the Constitution?
Identify the areas in which each level of government can act. Section 92 allows provinces and territories to create municipalities (third level go government)
76
What is residual power?
Gives the federal government authority over everything that is not specifically mentioned
77
What is a direct tax?
The cost of a direct tax is expected to fall on the taxpayer
78
What is an indirect tax?
The cost of an indirect tax is expected to be passed on from the taxpayer to someone else (only the Federal government has this power)
79
What is income tax?
A direct tax determined by income
80
What is a sales tax?
A indirect tax, im
81
Who is the Queen represented by?
The governor General who is Julie Payette
82
Who is the Lieutenant Governor in Alberta?
Lois Mitchell, represents the Queen provincially
83
What is a Commissioner?
Represents the Queen territorially
84
What is Ultra Vires?
Acting or done beyond one's legal power or authority. Becomes void under sec 52.
85
What is Intra Vires?
Acts within the scope of its power
86
What is the doctrine of federal paramountcy?
Gives priority to the application of a federal statute where those terms conflict with a provincial statute.
87
What is the impact the Canadian Charter of Rights and Freedoms has had on laws?
A law can be attacked if it violates the Charter
88
True or False the Charter provides property rights and economic rights?
False, the charter does not.
89
What are property rights?
Rights to own and enjoy assets
90
What are economic rights?
Rights to carry on business activities
91
What are the other restrictions on the Charter?
Government action, Corporations, Reasonable limits, Notwithstanding clause
92
What is Government action?
The Charter only has full effect if a person is complaining about the governments behaviour
93
What is the restriction concerning Corporations?
The Charter generally does not apply against private corporations
94
What is a Corporation?
It is considered a type of person but is is not an "individual. Therefore corporations enjoy freedom of expression under section 2(b), but not equality rights under section 15
95
Who does Section 2(b) apply to?
"everyone" including corporations
96
Who does Section 15 apply to?
only to "every individual", not including corporations
97
What is the Reasonable limits restriction?
Section 1 states that its rights and freedoms can subject to violation. Especially when it fringes on the
98
What is the Notwithstanding clause?
Section 33 allows Parliament or a legislature to create and enforce a law "notwithstanding" the fact that it violates the Charter. Applies to Section 2, section 7-14 and section 15 rights. Invoked every 5 years
99
What is Section 24 of the Charter?
Charter Remedies
100
What are Charter Remedies?
Declaration, Injunction, Striking down,( Severance, Reading Down, and Reading in), and Damages
101
What is a Declaration?
A court declares that the Charter has been violated
102
What is an Injunction?
An injunction requires the government to address the problem in a certain way. The choice lies with the judge, rather than the legislature
103
What is Striking Down?
A court may strike down or eliminate a statute that violates the Charter. That decision may take effect immediately or it may be temporarily suspended.
104
What is a temporary suspension?
Appropriate where the immediate elimination of a statue would create substantial problems
105
What is Severance, Reading Down, and Reading in?
A court may save a statue by re-writing part of it
106
What is Severance?
If only one part of a statue is offensive, it may be severed or cut out
107
What is Reading Down?
If a statute is written too broadly, it may be read down so that it applies only where it can be justified
108
What is Reading In?
If a statue is written too narrowly, the court may read in a broader interpretation
109
What is Damages?
may be awarded damages to a person who has suffered a Charter violation
110
What are Charter Damages?
Intended to compensate the plaintiff's loss vindicate the plaintiff's rights, and deter future wrongdoing
111
What is the first source of Law?
The Constitution, including the Charter.
112
What is the second source of Law?
Legislation, within it statutes and/or acts
113
What is legislation?
Law that is created by Parliament or a legislature
114
What is a bill?
A bill is proposed legislation becomes Law when approved
115
Federal bill?
Federal bill must have a reading in the Senate and must have Royal Assent of the Governor General
116
What is a by-law?
A type of subordinate legislation that is created by a municipality. Used to license businesses, impose some sorts of taxes, plan commercial developments, and regulate parking
117
What is the third source of Law?
The Courts
118
What is the role of the Courts?
Courts must interpret and apply the words that appear in the Constitution and in legislation. Courts also have the ability to create laws
119
What are the three ways "Common Law" can be understood?
As a system of law, a source of law, or a type of court
120
What are Common Law sources?
specific way to refer to rules that are created by judges
121
What are Common Law courts?
Consider judge-made rules. Two sets of courts: the courts of law and the courts of equity. Common law is referred to the rules developed in the "courts of law"
122
What are courts of law?
A court system, courts insisted on applying the strict letter of the law, often rigid and harsh.
123
What are courts of Equity (fairness)?
| also known as courts of Chancery
A court system, concerned with justice than the rigid rules. Decisions were based on equity, this has since developed and applied a consistent set of rules
124
What is the Nature of Equity?
Equity may still be slightly more flexible than law but, for the most part, the two systems are different only because they occasionally apply different rules
125
True or false: Every Canadian court is now both a court of law and a court of equity?
True, apply both legal rules and equitable rules
126
When is the division between law and equity especially important?
Especially important with respect to a trust
127
What is a trust?
Exists anytime that one person owns property for the benefit of another
128
What is most common type of trust?
An express trust, which is created when one person, called the settlor, transfers property to another person, called the trustee, to hold on behalf of the beneficiary. The trustee legally owns the property but the beneficiary is the equitable owner
129
How is Legislation involved in risk management?
Business people are able to affect the creation of a law during the legislative process (lobbying)
