Revew Flashcards
Differentiate employment from a contract
o An employee involves a master-servant relationship where the employer is the master and the employee is the servant. For these reasons there are human rights that are put in place to ensure that the employee is treated properly including minimum wage. The degree of control in an employee relationship is high and the employer directs what is to be done. A contract involves the hiring of a worker through contract meaning they are working using their resources and there is no master-employee relationship.
• How is the liability of an employer different if the worker is an employee rather than a contractor ? ( what is this liability called?)
o The liability of an employer If the worker is an employee is they are vicariously liable meaning they are responsible for negligence of their employees. If the worker is an independent contractor then the employer is not liable for the workers negligence unless they are an agent.
Types of termination
Proper
Wrongful
Constructive
Proper termination
o Proper termination is due to either just cause or with proper notice or payment in lieu of notice. Just cause is because an employee did a fundamental breach of the employment contract and it was made clear that it was in violation and was given a warning. With continuous breach termination can occur.
Wrongful termination
Wrongful termination is when an employee was fired without just cause and not given the amount of notice or payment in lieu of notice that the employee deserves.
Constructive termination
Constructive termination is when a fundamental change to the contract occurs without consideration and the employee consent and is forcing the employee to leave the job.
What conditions are to be met to terminate an employee for just cause?
The employees conduct amounts to a fundamental breach of the employment contract.
The employee is guilty of serious misconduct,
habitual neglect of duty,
incompetence,
conduct incompatible with duties or prejudicial to the employers business,
willful disobedience in a matter of substance.
Serious misconduct
intentional, harmful conduct of the employee that permits the employer to dismiss without notice. Not a minor mistake but could be many minor mistakes over time. Employee must be warned ahead.
Habitual neglect of duty
persistent failure to perform employment duties. This must be without the employers permission and must be warned ahead.
Incompetence
lack of ability, knowledge, or qualification to perform employment obligations. Must be more than the employer being dissatisfied. The employee must be warned and given opportunity to improve. There must be performance standards written against which to measure the performanc
Willful disobedience
Deliberate failure to carry out lawful and reasonable orders. The act has to be serious and the employer must be able to prove instructions were clear. Less serious offences may justify when they are cumulative.
What are relevant factors in determining reasonable notice?
Character of employment
Length of service
Age
Availability of similar employment
Degree of responsibility
Special qualifications
Circumstances
Character of employment
high level management is entitled to more notice than a junior employee.
Length of service
longer-term employees lack the breadth of experience over those who had several jobs.
Age in relation to reasonable notice periods
older employees are entitled to more notice because of difficulty in finding employment past a certain age
Availability of similar employment
the fewer opportunities are available, the more notice an employee is entitled to.
Duty to mitigate
employees must take reasonable steps to find a similar job. They do not need to look for a lower level job. Failure to mitigate will result in a deduction of damage awards.
The employment standard act and how does it impact employment with respect to hiring, management and termination of employees?
o The employment standards act is a legislation that sets out the minimum employment standards for various aspects of employment, including hours of work, wages, overtime, and termination. It ensures fair treatment of employees and provides basic rights in the workplace.
The human rights act and how does it impact employment with respect to hiring, management and termination of employees?
Human rights act administers human rights legislation and investigates complaints. This act prohibits discrimination in hiring for reasons like marital status, race, colour, physical or mental disability, religion or creed, sex and sexual orientation, and age.
-Steps in the hiring process are affected by human rights legislation.
What are the different types of interest in property?
Fee simple
Life estate
Leasehold
License
Easement
Mortgage
Opitons
Fee simple
the legal interest in real property that is closet to full ownership. It is the highest, most comprehensive level of ownership.
Provides owner with the most rights, including the right to use, possess, transfer, and exclude others from the property. It is indefinites, exclusive, and allows for the property to be passed down to heirs.
Life estate
o A life estate exists only for the duration of the holders life then reverts to the original owner or passed on to someone else.
This is an interest in real property that only lasts for the lifetime of the holder. It is non-indefinite and exclusive, as the holder has the right to use and possess the property during their lifetime.
Leasehold
o Leasehold- when one party buys the right to occupy land or a building for a given time. Leasehold estate can be bought and sold on the open market.
A leasehold estate is an ownership of a temporary right to hold land or property, typically acquired through a lease. It is a non-indefinite, exclusive right to use and possess the property for a set period of time, as determined by the lease agreement.
License
o Licence- consent given by the owner of rights to someone to do something that only the owner can do.
A licence is a personal privilege to do some particular act or series of acts on the land of another without possessing any estate or interest therein. It is non-exclusive and non-indefinite.
Easement
o Easement- the owner of the land gives someone the right to use a part of the land for a specific purpose
An easement is the right to use another person’s land for a stated purpose. It is non-indefinite and non-exclusive, as it provides a limited right to use the land for a specific purpose.
Mortgage
o Mortgage- a mortgage is a legal agreement by which a bank or other creditors lends money at interest in exchange for taking title of the debtors property, with thee condition that the conveyance of title becomes void upon the payment of debt.
Options
o Options- an option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price before or on a specified date.
Joint tenancy
o Joint tenancy- co-ownership whereby the survivor inherits the undivided interest of the deceased. Heirs have no claim
Tenancy in common
o Tenancy in common- co-ownership whereby each owner of an undivided interest can dispose of that interest as they see fit.
What is the different between joint tenancy and tenancy in common?
o The key differences between joint tenancy and tenancy in common are the right of survivorship and the disposition of the property upon the death of a co-owner. Joint tenancy includes the right of survivorship, while tenancy in common does not. This impacts how the property is passed on to the co-owners or heirs.
What are the different types of intellectual property?
Copyrights
Patents
Trademarks
Copyrights
copyrights protect original works of authorship, such as books, music or software. They give the creator the exclusive right to reproduce, distribute, and perform or display the work. Copyright protection is automatically granted once the work is created and fixed in a tangible medium.
Patents
patents protect inventions, processes and scientific creation. They are granted by the government and give the holder exclusive rights to the invention for a certain period of time. There are 3 main types of patents: utility patents, design patents and plant patents.
Trademarks
Trademarks protect brands, logos and slogans that distinguish goods or services in the marketplace. They are acquired through use in commerce and can be registered with the government to provide additional legal protection.
How do you label a transaction involving the transfer of possession?
Bailment
How do you label a transaction involving the transfer of possession when you borrow something from someone without compensation
gratuitous bailment.
How do you label a transaction involving the transfer of possession when you borrow something from someone with compensation
Bailment for value
Types of bailment
Voluntary
Involuntary
For value
Gratuitous
Voluntary bailment
o Voluntary Bailment This occurs when both parties willingly enter into the arrangement. The bailor (the person transferring the property) and the bailee (the person receiving the property) intentionally create the bailment relationship. Examples include leaving something for repair, checking a coat, or depositing mail.
Involuntary bailment
This arises when a person accidentally, but without any negligence, leaves personal property under another’s possession. As long as it remains involuntary, the bailee is not under the slightest duty to care for it. However, if the bailee exercises any control over the property, they become responsible as if they were a voluntary bailee.
Bailment for value
bailment involving payment for use of property or service
Gratuitous bailment
bailment that involves no payment- only benefits one of the parties but not both.
Gratuitous bailment for the benefit of the Bailee
the bailee has a duty to take reasonable care of the item and treat it as if it were their own. They are responsible for even the slightest carelessness.
Gratuitous bailment for the benefit of the bailor
If the bailment is gratuitous and for the benefit of the bailor the standard of care is low but must avoid deliberately or recklessly damaging the item. (Low standard of care)
What principals govern the rights to the parties in bailment?
If the bailment is for value it is governed by principals of contract law
If the bailment is gratuitous if something goes wrong there is no liability as there is no contract and torts govern.
How to ensure repayment of debt
Mortgage
Chattel mortgage (possession is held with debtor)
Pawning (possession is held by creditor)
Cash flows from copyright
Negotiable instruments
Ways to secure debt
Guarantor
Registering lein
Floating charge
Letter of credit
Guarantor
Third party ensures that if debtor fails to pay they will pay
- separate contract
- must have consideration so timing is relevant
- need to be in writing to be enforceable
- secondary liability
- increasing amount without guarantors agreement voids the whole contract.
Lein
Create a burden on property and must be lifted before doing transactions on property (kind of like mortgage and could force sale on property to recover it)
Letter of credit
Bank ensures payment providing you meet your terms of letter of credit
Bank issues when the funds are held in account
Floating charge
Collateral on inventory that is constantly being turned over.
It’s not necessarily attached but hovers over all inventory.
How to ensure you’re Paid first
Establish priority
Register the transaction (lien)
First to register transaction has priority over other creditors
Risk is larger or mortgage creditors when registration has occurred which is why interest will be higher.
Voluntary bankruptcy
Used to get rid of debts
When someone borrows so much they have no way to pay it off
Process of handing over control of assets in favour of trustee who liquidates and distributes cash to creditors in order of priority
Takes 9 months to complete
Involuntary bankruptcy
Bankruptcy that is forced on you.
An unsecure creditor is trying to get money and if they wait they may get nothing.
Why would someone opt for voluntary bankruptcy?
To get rid of debts
Allows them to start fresh
Discharge of contractual obligations
When you have no way to pay everything back.
What are ways to avoid bankruptcy?
Disagree with the assessment and claim you can turn things around
Renegotiate terms of loan
Loan consolidation
Division 1 proposal
Division 2 proposal
Renegotiate terms of loan
Claim that longer terms are more manageable
Loan consolidation
Get one bank to pay all debt and just pay that one bank back
Division 1 proposals
If your debt is higher than $250,000 and up to $5 million.
Creditors must approve this or you get out into bankruptcy
No time length
You get to keep your assets
Division 2 proposals
If your debt is below $250,000
Even if they disagree it doesn’t force you into bankruptcy unless you fail to provide a fresh proposal
Lower cost
Must be completed within 5 years.
Sole proprietorship
- The oldest, simplest form of business organization
- no legislation, but you may need to obtain a business license and register a trade name
- easy to set up
- an unincorporated business organization that has only one owner
- the owner has unrestricted legal responsibility for obligations
No legal distinction between the business and its owner.
Sole proprietorship ease of formation
A sole proprietorship is easy to start and has low setup costs
Sole proprietorship liability
The owner has unlimited personal liability for the businesses debts and obligations
Sole proprietorship funding options
Limited funding options as the owner cannot sell stock, making it challenging to raise capital
Sole proprietorship control and management
The owner has complete control and makes all decisions
Sole proprietorship taxation
Profits are reported on the owners individual tax return, and the business is not taxed separately
Sole proprietorship pros
- least regulated
- lower costs than partnerships and corporations
- faster to form than partnerships and corporations
- efficient decision making
Sole proprietorship cons
- unlimited personal liability
- limited access to capital (can only borrow)
- limited resources
- limited lifespan (dies with the owner)
- tax disadvantage (must claim all business income with personal taxes)
- difficult to transfer
Partnership
A business carried on by two or people people with the objective of making a profit.
- it is similar to a sole proprietorship, in that neither has a legal personality - or legal existence- separate from the people who compromise them.
- a legal relationship between two or more people who do business together for profit.
When does a partnership exist?
When two or more people “carry on a business in common with a view toward profit”
-it can include people who intend to be partners, as well as those who may not intend to be, but who act as if they were partners.
-it excludes charitable and not-for-profit organizations
Partnership formation
Partnership s are relatively easy to form and involve two or more co-owners
Partnership liability
Partners have unlimited personal liability for the business’s debts and the actions of other partners
Partnership funding options
Partnerships can pool resources, making it easier to raise capital than a sole proprietorship
Partnership control and management
Management and decision making are typically shared among the partners, as outlined in the partnership agreement.
Partnership taxation
Profits and losses flow through the partners individual tax returns, and the partnership itself is not taxed.
Rules to govern partnership
Partnership legislations
Contract law
Agency law
Partnership act
Partnership law based in large part in contractual law, agency law and provincial partnership legislation
Partnership act sets out
Default and optional rules for partnerships that can be varied by witten agreement.
- when a. Partnership exists
- relationship of partners to outsiders
- rational if partners to each other
- how and why a partnership ends.
Partnership pros
-faster to form than corporation
-lower costs than corporations
-greater access to resources
Partnership cons
-unlimited personal liability
-challenges in decision making
-more difficult to transfer than corporations
-tax disadvantages
Corporation
A distinct legal entity in law and capable of assuming its own obligations
-it is usually the safest vehicle for conducting business because the owners are normally shielded from personal liability.
-it is managed by a board of directors elected by the stakeholder
-officers can be hired by the board to assist in running the corporation
Shareholder
A person with an ownership interest in a corporation
Director
A person elected by shareholders to manage corporation
Profit sharing
Profits of the corporation are distributed to shareholder through dividends
Dividend
A dividend of profits payable to shareholders
What is an important source of capital for a corporation?
Shares
-they represent an equity position in the corporation for the shareholder, who can receive dividends
Formation of a corporation
Corporations are more complex to form and involve filing documents with the state
Liability of corporation
Shareholders have limited liability, and the corporations actions are separate from the owners personal actions
Corporation funding options
Corporations can issue stock to raise capital, providing more flexibility to raise money from investors
Control and management of corporation
Shareholders elect a board of directors to make major decisions and oversee the corporations affiars
Taxation for corporations
Corporations are taxed as separate entities, and shareholders are taxed on dividends received.
Corporation ownership
Ownerrship can be represented by shares, and easily transferred
The corporation pros
-limited liability of shareholders
-flexibility of structure
-greater access to capital
-continuous existence
-tax benefits
-transferability.
Corporation cons
-higher costs
-greater regulation
-possible loss of control
-potential bureaucracy
What is gratuitous Bailment
In the situation where the gratuitous bailment is for the benefit of the bailee the bailee has a duty to take reasonable care of the item and treat it as if it were their own. They are responsible for even the slightest carelessness.
If the bailment is gratuitous and for the benefit of the bailor the standard of care is low but must avoid deliberately or recklessly damaging the item. (Low standard of care)
Bailment for value
When you borrow something with compensation is bailment for value the bailee is generally responsible for taking good care of the borrowed item and returning it in the same condition. If the item is damaged due to the bailee’s negligence, the bailee may be held liable for the damage.
