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Law 525 Notes
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Lecture notes of 58 pages for the course Law 525 at Ru (Law 525 Notes)
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Lecture 1September 8, 2021 1:25 PM
• Market Failures and the Law
• A Market Failure occurs when goods and services are not distributed efficiently. From a consumer
perspective, this is problematic when market failures detract from meaningful consumer choice
about goods and services
○ Can occur when one market player or group acts to create a monopoly
○ Can occur when there are negative externalities
▪
▪ and information failures occur – that is, where unacknowledged costs of a product or
service are involuntarily assumed by consumers
▪ E.g., when consumers purchase products unaware of hazards and risks that may result
from use or consumption of products ( product safety hazards from defective or
dangerous products)
○ Can occur where there are information asymmetries or imbalances between businesses
and consumers so that real attributes of products are not apparent from an inspection of
the product
▪ There is something not quite advertised properly and the consumer would be
unaware
• E.g., China, convicted Canada Goose for lying about the product they are
offering does not have High Quality Down as they advertised.
• Government Intervention
• To address market failures, in addition to contract/tort law, governments intervene through
legislation and regulations that:
○ Require that products, services and activities meet certain standards ( e.g., to ensure
consumer protection)
○ Ban/ restrict particular products, services or activities
▪ e.g., sex work
○ Require that particular information is disclosed to consumers
▪ Recalls, e.g., Ikea: produced furniture that caused injuries, had to release further
information to reduce harm
○ Prohibit or restrict sales practices or other practices that are misleading
▪ Airline fees: used to only show base airfare without including other fees ( fuel,
security, etc...)
• Now it is a rule that all airlines have to provide 'all in' pricing to give a level
playing field across all airlines to make an informed decision
• Limits deceptive pricing
○ Limit the ability to sell products and services unless certain requirements are met
▪ Persons must be of certain age and/or must show driver's license
○ Impose liability on retailers and manufacturers for defective or harmful products or
practices
• Risk Management and the Law
• Risk Management – the process of identifying, evaluating and responding to the possibly harmful
events
• In complex and constantly changing marketplace, often difficult to eliminate risk, but risk can be
managed through strategies such as:
○ Risk avoidance
▪ e.g., completely closing down stores during covid
▪ e.g., New kind of batteries are exploding , so they completely shut down production
○ Risk reduction
, ▪ e.g., Masks, covid forms
○ Risk Shifting
▪ e.g., signing waivers before you go into a gym
▪ e.g., Getting an insurance policy
○ Risk Acceptance
▪ e.g., 0.01% batteries are dangerous but they accept that as part of the cost of doing
business
• Risk Avoidance
○ Some risks are so serious that they should be avoided altogether
○ If product regularly malfunctions in a way which causes serious harm, business should not
sell that product. By doing so , they thereby avoid lawsuits
○ If there is a danger on the premises of a retailer that can't be cordoned off from customers,
close the store, and thereby avoid lawsuits
• Risk Reduction
○ Some risks can be reduced to an acceptable level through precautions
○ E.g., checking the wording of a proposed advertisement with the company lawyer decreases
the likelihood that the advertisement will be considered misleading, contrary to law
• Risk Shifting
○ Even if a risk can't be avoided or reduced, it may be shifted onto another party
○ Insurance is one form of risk shifting
○ Exclusion Clauses are another form of risk shifting
○ Use of independent to perform a task that would otherwise be performed by employees
may be another form of risk shifting
• Risk Acceptance
○ It is sometimes appropriate for a business to accept certain risks and deal with them on a
case by case basis
○ For example; there may occasionally be 'accidents' involving cars and shopping carts in the
supermarket parking lot. Handle them on a case by case basis rather than removing
shopping carts from the store
• Approach to Use of Materials
• Ask yourself
○ In what way is law relevant, and how does it apply to business-consumer issues
○ What level of government is responsible
○ How is the gov address the issue
○ What are the consequences if there is non-compliance
○ What are the key concepts underlying the law
○ What is the logic model ( assumptions of behavior)
○ What powers/duties do all parties have under law
, Lecture 2
September 16, 2021 8:11 AM
• Constitutional Law
• Constitutional law is the highest form of law
○ It takes paramountcy over all other laws
○ All other laws must follow it, it is interpreted by judges
○ Constitution act 1867; s91(federal) and 92(Provincial), given to us by the king of England
would govern division of powers of the governments of Canada ( provincial and federal)
▪ e.g., Under 2.91 -Federal powers can regulate banks,
• Under s.92 - Provincial powers cannot regulate federal powers
▪ If there is any uncertainty on who can do what the power goes to the Federal
government
○ Municipalities ( I.e. city of Toronto) do not have any constitutional powers, I
▪ It is delegated by the province
• e.g., regulating road work
○ Charter of Rights and Freedoms
▪ Paramount law , at the same level of the Constitution 1967
▪ Statutes / bill of rights are of less power than the Charter + Constitution
• What is Constitutional law?
• Similarities and differences from other types of law
○ How constitutional law is developed
▪ Developed through an arm of governments that develop and interprets and give
meanings to what the constitution means
▪ Through Judges, + court decisions
• Entire judiciary ( all levels)
• The higher the court the more weight their decision holds
• Hierarchy + Precedent( following higher courts decisions)
○ How constitutional law can be amended
▪ There is an amendment vote
• Must get 50% of population of 7/10 provinces ( territories do not count)
• Need senate + provincial legislators approval
○ To whom does constitutional law apply
▪ Applies to all government laws/regulations/crown agencies
▪ In the context of human rights, they are not governed by human rights
• They are governed under provincial laws under a human rights act
○ I.e., governing what individual landlords can do in respect of individual
tenants.
▪ Business and consumer dispute = provincial
▪ City vs. Private party = depends
• Parking dispute = provincial
• Human rights issues (I.e., women are not allowed to work) =
charter
○ What is the relation between constitutional laws and other types of law
• Constitutional law in unitary vs. Federal states
○ Unitary state has no provinces / sub governments, one branch of government
○ Federal states have sub governments
• Types of constitutional law
• Key Issues in Constitution Law
, • What happens when a government passes laws that exceed its authority to address a particular
business activity – Ultra vires
○ e.g., province trying to regulate banks,
○ e.g., federal government trying to regulate nursing homes and hospitals, universities
• What happens when there are conflicts and overlaps(Ultra vires) between federal and provincial
laws addressing particular business activates
○ If a law is ultra vires it is declared null / not enforceable /no force and effect
• What is the constitutional status of federal, provincial and municipal business laws and activities
• How does a constitutional law address business activities not contemplated when the constitution
law was passed
○ Figure out if it is a federal or provincial issue
• What remedies ( redress/consequences) are/is available when a violation of the constitution
occurs
• How is the constitutional division of powers relevant to business
• If a new law is needed , businesses need to know which level of government has authority to
address the problem
• If a government stipulates that a business is obliged to do something, and the business for some
reason disagrees with this stipulation, they may be able to successfully challenge the law as not
properly within the authority of that level of government
• Who does the charter apply to
S. 32
• Charter establishes rights/freedoms of "persons" or individuals vis-a-vis government
○ Government as legislator
○ Government as
• Difference: Charter and other rights instruments
• Does charter protect business or just individuals - Both
• Business entities = individuals
• Everyone has the following freedoms
• Everyone has the right to life, liberty and the security of the person
• Every individual is equal before the law
• In some cases, the charter protects business interests
• e.g., advertising ( Tabacco )
○ Violates their freedom of expression
• e.g., When they can be open
• They can contest and challenge laws that violate their rights as an individual under the charter
• In some cases , the charter can be used by business to challenge laws that are not consistent with the
charter
• s. 2 – Charter freedoms benefiting and constraining businesses
○ Freedom of expression
○ Freedom of religion
• S.7 Charter rights
• Everyone has the right to life liberty and the security of the person, can't be deprived thereof,
except in accordance with principles of fundamental justice
• s.11(d) any person charged with an offence has the right to be presumed innocent until proven
guilty according to law
○ Criminal offences
○ Regulatory offences without prison
○ Regulatory offences without prison
• Charter rights/freedoms not absolute
• S.1 - subject to such reasonable limits demonstrably justified in free and democratic society
• S.33 - parliament or provincial legislature notwithstanding clause - ( op out of parts of the charter
reasonably)
• SECTION 33 , NOT WITHSTANDING CLAUSE CAN BE USED IF THE GOVNT CHOOSES TO OPT OUT OR
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