Jurisdiction

The constitution act plays an important role in creation of legal environment of business, key aspect is
division of powers: federal government is empowered to create legislation and law, whereas provincial
government is empowered in other specific areas

If a government goes beyond jurisdictional authority it is given in constitution, it can be legally

challenged

Charter
Charter of Rights and Freedoms, applies to both people and businesses. Charter applies to government
activity. If government is seeking to pass legislation that violates charter right or freedom can be
challenged by a business

Legislation and Common Law

Legislative

Elected legislatures (federal, provincial, territorial, municipal) will utilize a legislative making process that
provides opportunity for businesses potentially opportunity to participate in

- It will vary
- Flow: Piece of legislation will be introduced, it would be debated, then it would be voted on, it
will go through the voting and amendment three times
- There will be a period for input on a draft bill, there might be (local) hearings
- Larger industry organization may monitor legislation environment as it pertains to that industry
- Businesspeople may write to elected mp on particular pieces of legislation

Judicial

Courts create common law – essentially a vast body of judicial decisions that build up over time as
courts make decisions

It is premised on notion of precedent; similar cases should be decided in a similar way with the
application for similar legal principles

Hierarchy of courts – precedent applies primarily with a judicial jurisdiction (i.e. provincial), higher
courts (such as appeal) will have greater precedential weight, cross jurisdictions courts are not bound by
what courts have previously found in other judicial jurisdictions though they can be persuasive

Supreme court of Canada that has ultimate authority, binding precedential value on all courts in Canada

Input from businesses will probably be reactive when they end up in court

Caveats – Quebec is premised on civil law (code based system), even without common law there are still
opportunities for litigants to argue differences between past cases and present situation

Regulations
Jurisdictional limit that governments have if they want to create and enact legislation or statutes
When governments draft legislation it will be done in general terms and broad obligations and
expectations

Typically, they will then empower creation of regulations that can be created under the authority of that
statute, the legislation will identify specific areas where regulations can then be created

With a single piece of legislation there can be a variety of regulations that provide the specific detail (i.e.
OSHA is legislation, but regulations give detail such as on step ladders)

- If incident involving step ladders, ministry of labour would evaluate accident based on
regulation to determine if employer was meeting obligations of safety of step ladder

Dispute Resolution
4 primary types

- Negotiation: parties can negotiate with each other once they have identified there has been
potential legal dispute, either direct through parties or through their representatives
- Mediation: assisted for facilitated negotiation, parties will either have pre- identified meditation
through contract, or decided during dispute, there will be a third party that will assist with a
negotiated resolution, communicate through meditator instead of face to face
- Arbitration: private litigation or private trial, similar to meditation parties may have pre-agreed
that arbitration would be the way a dispute was resolved perhaps through a contract, or during
dispute, arbitration can be a single or panel (commonly up to 3), similar to meditation the
arbitrators usually have experience in the background area and it’s private, more flexible then
litigation, arbitration is a fairly binding process unless major procedural flaw, judicial review if
major issues (not an appeal)
- (Civil) Litigation – Small Claims Proceedings (more flexible), Civil Litigation Procedures (exceed
100000 in damages, more formal in Ontario), mixed bag of rules (in between)
o Pleadings (written claims to be made, facts, law, remedy)
o Discovery (produce any relevant documents to that lawsuit whether they help you or
not, one individual from each litigating party who will sit under oath to respond to
relevant question related to litigation matter,)
o Pretrial procedures: pretrial hearing, mandatory meditation in many jurisdictions
(further encourage parties to settle)
o Once a decision has been made, it is regarded as a civil debt, a defendant who does not
want to pay can be effective at not paying a judgement (be aware of a potential
defendant have a history of unpaid debts)
o One automatic right of appeal (can add 12-24 months onto litigation matter that
could’ve already taken 4-6 years to get to that point)

Validity of Contracts
Court needs to be able to identify Offer, Acceptance, and Consideration If they are present then they
will assume that the parties intended to enter into a contract. There has to be sufficient certainty of
primary or key terms to conclude that there was a contract. Contracts can be verbal or written, maybe
partly both (not advisable). When dealing with written contracts, issues of validity tend to be less of an
issue.
Contract Terms and Ambiguity
The express terms or explicit terms are the terms that the parties have clearly agreed to with a written
or verbal agreement. The implied or implicit terms can come from legislation, if in litigations courts can
imply terms into a contract. Business efficacy is a legal doctrine that will allow courts to imply a term
that might be necessary to make a contract workable, the common law will also imply terms. Common
law notice entitlements are a good example of implied term in an employment contract that the parties
may not even be aware of.

May have the ability to contract out of legislative implied terms, or they may be automatically implied.
There are a couple of approaches that courts may use when resolving ambiguity with contracts: they
may use plain meaning approach (dictionary definitions, past legal decisions), may listen to evidence to
determine intent of parties.

Standard Form Contracts

Standard form contracts are an important element of contracts, used regularly by business in terms of
conducting interactions with parties (end customers, other businesses). They increase efficiency (same
contract, or similar transaction over and over), builds in an excuse not to negotiation (take it or leave it),
provides an opportunity to use a contract that favours you, have to make sure you fully understand it.

They are enforceable, although they take to be one-sided but there are some things to keep in mind.
Typically want to use terms and clauses that are typical for that particular type of contract, types of
clauses other businesses are using), you can be one-sided but you don’t want to be so far out there a
court to see it as unacceptable. Typically do things that highlight clause to other party (bolding, all caps,
highlighting), physical contracts you might have party initial.

Enforcement of Contracts
Overtime are a few doctrines that have been developed in common that may allow a party to challenge
what may otherwise appear to be an enforceable contract. Concern around vulnerabilities of parties.

- Considerations involving minors unless for necessaries

- Mental incapacity issues (permanent or temporary)
- Duress
- Undue influence
- Unconscionability

Significant doctrine or concept is contractual misrepresentations (usually statements that are made
before parties enter into a contract), they can impact whether a party decides to enter into a contract.

- Innocent Mispresentation (Contracual rescission, asking for contract to be undone, parties are
returned to their pre- contract position)
- Negligent Mispresentation (Recession, in addition they may be able to add on a separate tort
claim for additional damages)
- Fraudent Mispresentation (Recession, in addition they may be able to add on a separate tort
claim for additional damages)
Specific test for misrepresentation – has to be false statement, has to be a statement of fact, has to be
material to the contract, has to have caused a party to enter into the contract itself

Legal mistake

If there is a legality issue with the contract, it can be argued that the contract should not be enforced
(there could be pieces of legislation, certain contracts have to be in writing, basis of public policy)

Non-compete contracts or clauses can also be a factor

Ending a Contract
- Parties can walk away from a contract
- Parties can make a minor change to a contract
- Parties can rip up an existing contract by creating a new contract
- Contractual assignment, situation where the terms of the contract don’t change but one of the
parties to the contract may change
- Common law default principles for ^ that apply, generally speaking, if a party wants to assign
both their obligations and benefits the other party must be notified, if a party has already
performed obligations but is only awaiting a contractual benefit they can transfer that benefit to
a third party by providing notice to the other party to the contract
- Contract is frustrated when a significant unanticipated event occurs which renders the
performance of the contract functionally impossible

Failure to perform is a breach of contract, there is a legal test to prove breach of contract. If a party
wants to allege boc they will have to prove that there was privity of contract, there was a term or terms
that were not performed, they have to prove that they suffered harm as a result of that.

An innocent party is entitled to treat a contract as at an end or repudiate the contract, then you have to
assess the nature of the breach. Similar to assignment, initially you look at contract does the contract
address what clauses are to be regarded as conditions (major terms), which clauses are to be regarded
as warranties (minor terms). If the contract stipulates that a clause is to be treated as a condition, then
the innocent party can treat themselves as being released from that contract. If term is actually a
warranty then although they can sue for breach, if they have ongoing obligations then they are not
contractually released from their obligations, so they themselves could be in breach of contract and
sued for that.

If it is not clearly stated what is a condition or warranty in a contract, then there is room for
disagreement.

Courts will honour whatever the parties agreed to regarding the classification of a contractual clause.

Agency
Agency is a legal concept that underpins how many organizations are able to do things. Agency is still a
contractual relationship, it has two facets. The first is Principal -> Agent, if it’s a contract for a service it
may be a single standalone agency type contract such as a Real Estate Agent. You can also have agency
relationship is apart of another legal relationship that exists, such as employer to employee where the
employee is authorized to do things for the business.
Agency involves authorizing someone to do something on behalf of the principal. Sometimes that grant
of authority (actual authority) is found within a standalone contract (real estate) or apart of a larger
legal relationship (employee) there terms of agency empowerment may not be found in their
employment agreement but maybe in the policy and procedures of the organization that are legally
regarded as implied terms to that contract. It could be verbal, provided both the agent and the principal
fundamentally agree on terms of actual authority.

When signing written contracts, when someone is signing on behalf of organization (business title
above, per, I have authority to bind the organization).

Actual authority is sometimes exceeded, principal is sometimes still responsible if in the eyes of the third
party this seems like something the agent apparently has authority for.

Apparent authority is when if you’re a business and your agent has exceeded actual authority, and the
third party sees a basis that the agent was representing the principal they are responsible.

Agency by ratification is when an agent exceeded actual authority but principal is ready to ratify the
contract, be bound by the contract.

Potential situations where an agent is liable for a contract.

Contractor- Independent and Dependent

There are different implications for a business based on how an individual is classified.

Businesses owe greater legal obligations to employees, particularly when the legal relationship ends.
They will also become the direct intermediary having to provide government require obligations such as
remitting taxes.

The determination is established by the common law, a few factors will be considered and the process is
contextual not mechanical. Primary considerations include who own the tools of production, extent of
oversight and supervision, exclusivity, and more.

If employers misclassify someone for a period of time and they are sued later or the government comes
after them for retroactive payments, the obligations can be significant. Second thing to understand is
determining whether independent or dependent contractor, what is the extent of reliance the
contractor has on the business it provides services to. It can be established that a contractor was fully
reliant on the business it was providing service to. If someone is found to be a dependent contractor
then if the other party wants to end the contract they have to provide reasonable notice. This notice is
different from other employment, maybe based on precedent.

Discrimination in Employment
Legal risk in hiring process to be aware of, it involves potentially conducting hiring process that is not
consistent or violates provincial human rights legislation if you discriminate based on prohibited ground.
This can result in a potential human rights complaint being made against you.

The most typically way to avoid engaging in unintended discrimination is to be quite intentional in hiring
process, such as casting net widely for candidates and potentially encouraging historically disadvantaged
groups to apply and help generate a robust candidate pool.
Differentiate potential candidates based on skills in resumes, then in interviews questions should be
preplanned so from a hiring process you can focus on what you want to evaluate and don’t stray into
questions that inadvertently discriminate on prohibited grounds.

If it is determined that there must be discrimination necessary for a job, it can be legally justified on a
bona fide occupational requirement/qualification. For example, if age was a legitimate discrimination
factor then it would be justified on bona fide occupational requirement.

Employee Terminations
Termination of indefinite term employees is a legal risk for businesses. There are two major ways that a
business could use to terminate an employee is in compliance with legal obligations of business. First is
to terminate employee based on just cause: incompetence, willful disobedience, incompatible
behaviour, etc. Typically, it’s a very high bar to justify terminating an employee for just cause because
the employee won’t be titled to normal obligations of notice regarding termination. It will involve
making sure the employee is aware of the situation they are heading towards with what can happen if
behaviour continues, properly following policies in place as you go through that process.

The second and more common way is to provide notice of ending of employment relationship based on
legal entitlement that the particular employee will have. The minimal legal entitlement of notice is
established by employment standard legislation of province. The legislation will stipulate how much
notice the employee is entitled to, correlating to how long the employee has worked with the employer.
In Ontario it has tended to cap out at 8 weeks notice for 8 years of service. It is a modest amount of
notice that is provided or legal required. You cannot contract out of legislative minimum. Key factors
that enable an employee to a longer period of notice, perhaps even more than a few years.

Common law notice entitlement are not as precise as employment standards. What’s their job title,
responsibilities, how long have they worked there, etc. Employer will get a range when seeking how
long a notice for termination should be, an employee will also do the same after they get the notice and
their range may not match the employer. There is room for potential legal dispute.

One may assume that you only sue for wrongful dismissal if you’re given no notice but that isn’t the
case, i.e. for insufficient legal notice.

There’s different ways notice can be given: working notice (required to work during notice), payment in
lieu of notice (not required to work during notice, i.e. keep on payroll and benefits but you don’t need to
come in during notice period) but you are expected to mitigate and try and find appropriate
replacement employment.

Many compensation packages for senior employees may not be as simple as salary, they may also get
vehicle allowance, commission, etc. It is typical for employees to package notice as severance package
and they will typically sign some form that they are accepting what is being provided and waive any
future potential legal claims. You want to allow an employee enough time to process what they have
been advised so that they aren’t put on the spot.

Insurance
Insurance is an important risk management tool. From a legal consideration perspective, it is inherently
a contractual relationship. An insured will pay a certain amount of money on a regular basis to an
insurer who will then provide insurance based on terms of the insurance contract. Typically, there is
almost always a deductible, which is an amount of self-insurance that the insured will agree to pay. It
provides opportunity to make the insured feel more disciplined, but also help the insured play with the
cost of insurance policy (i.e. higher deductible, lower premium). Deductibles play a relevant pricing role
of insurance for insured. Categories of insurance: life insurance, property insurance, or liability
insurance.

Insurance contracts are contracts of utmost good faith. The insured is expected to provide all necessary
disclosure that enables the insurer to calculate the risk. There have been cases where the failure to
disclose was innocent but insurer has taken non-coverage position. You’re better to err on the side of
over disclosure

Importance of an insurable interest, it provides the distinction between a legally insurance contract vs.
gaming/gambling which could have issues or legality.

At their core insurance contracts are contracts of indemnity, at their core they’re about compensating
someone from their loss. Insurance contracts generally contain subrogation rights and they transfer
legal rights to insurer to sue other party to get some money back.

Forfeiture is important to understand, if insured does anything intentionally to bring about a loss they
will not recover on insurance claim.

Who’s involved in insurance transaction, you or company may go directly to insurance company set up
contract online with no intermediaries. However, you may deal with an insurance agent or insurance
broker and that is an important distinction. An insurance agent is a representative of the insurer, they
are legally obligated to look out for insurer interests not insured. An insurance broker is not aligned,
brokerages will set up contracts with different insurance companies to offer their products to the public,
can have a variety without same sense of obligation to insurance company.

Insurance adjusters are important as well, when you make a claim under certain types of insurance
policies, they will provide a recommendation if a claim falls within policy coverage or it doesn’t. It is
important to understand that the adjuster is not there to be your assistance, they are there to make a
determination.

Tort Introduction
Tort Law is a general area of the law that applies to compensating individuals or parties who are harmed
by other parties. It is a form of private compensation. It is about the obligation for a private actor for
being responsible for the harm that they caused. There are a few major categories of Torts: intentional
torts, and unintentional torts. This is still civil law, balance of probabilities. There are some torts that can
overlap with criminal code requirements but that would be a separate legal proceeding (proven beyond
a reasonable doubt).

You have to identify an existing tort that you can prove in court so that you are entitled to some sort of
recovery. Primary and vicarious liability are important. Vicarious liability stipulates that employers are
liable for the torts committed by employees in the course of business. There can be more than one
wrong doer (joint tort-feasors), joint and several liability.
How damages are determined in many tort legal proceedings is different that contract law, because they
typically involve some sort of physical harm for the innocent party. Expectation economic damages
(pecuniary damages) are the usual remedy claim in contracts. Whereas in tort law there are still
pecuniary damages i.e. cost of future care, loss of future income, but there are also non-pecuniary
damage claims, loss of enjoyment of life.