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BUSI 4000: Business Law Final Exam Review and Study Guide CA$14.50   Add to cart
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BUSI 4000: Business Law Final Exam Review and Study Guide
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Comprehensive chapter notes (Ch 3-19) designed to help efficient study process for both mid-term and final examinations. This includes a final exam outline. These notes are based off of both the required text and in-class lectures. Grade achieved in this course: 81

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  • July 5, 2020
  • 56
  • 2017/2018
  • Study guide

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Chapter 3 ​(not as important as other chapters)

Why is it important for businesses to asses the legal environment?
● Reduce the likelihood and impact of mistakes that are:
● Costly in terms of expense of legal services and damage claims
● Distracting in terms of time and effort
● Harmful in terms of relationships and reputation

What is a legal risk management plan?
● A comprehensive action plan for dealing with the legal risks involved in operating a
business
● Involves the cooperation of managers and employees at every level
● May use a variety of methods such as surveying, interviewing, managers and
employees, forming committees, or convening a panel of experts

Creating a legal risk management plan
● (1)Identify the legal risks
● (2)Evaluate the risks
● (3)Devise a risk management plan
● (4)Implement the plan

(1)Identify the legal risks
● Assess the organization's functional areas
● Review the organization's business decisions
● Examine the organization’s business relationships
● Analyze the organization’s operations and transactions
● Examples of potential legal risks:
○ Business could harm the environment and result in prosecution under
environmental legislation or civil actions by affected people.
○ Employee harassment could result in human rights investigation
○ Aggressive marketing could result in investigation under the federal competition
act
○ Companies must take all steps required to make sure they are safe from hackers

(2)Evaluate the risks
● Assess the probability of loss
● Assess the severity of loss
­ What is the probability of this actually happening, and what is the expense of the
exposure of an event (financial, reputation, loss for the business)

,(3)Devise a risk management plan
● Avoid or eliminate the risk
● Reduce the risk
● Transfer the risk
● Retain the risk
● How might a business absorb or retain the risk?
○ Self insurance ­ the organization can establish a funded reserve
○ Insurance policy deductibles ­ the organization can retain risks to a certain dollar
amount
○ Noninsurance ­ the organization can charge losses as an expense item

(4)Implement the plan
● Carry out the plan
● Monitor and revise the plan

Reacting when prevention fails
­ All risks can not be prevented/avoided
● Example:
○ Maple Leaf foods response to a widespread outbreak of listeriosis in 2008 that
was linked to the companys plant in toronto, which resulted in 22 deaths.

Lessons from these events?
● React quickly and in a positive fashion
● Use a prominent spokesperson to tell the companys side of the story and, as
appropriate, publicly apologize.
● Explain how the problem occurred and what the company is doing to fix it.
○ Can not come out and just say sorry, because that puts liability right in your
hands, have to be careful what you say and how you say it
● Use appropriate messages in different media: the companies expressed concern for the
victims and did not argue whether it was responsible
● Be open and consistent in acknowledging the problem

When to seek legal advice
● Consulting lawyers to soon and too often is expensive and cumbersome
○ Legal advice is better to get at the beginning, rather than at the end
● Consulting them infrequently to save money may be more expensive in the long run




Managing legal risk

, ● A business can manage its legal environment by:
○ Assessing that environment
○ Developing a risk management plan
○ Reacting to changes in the legal environment
○ Managing it legal services

Chapter 4

How business activities can lead to disputes
● Pollution incident
● Motor vehicle accident
● Hacking attempt
● Bylaw charges
● Delinquent customers
● Equipment breakdown
● Dissatisfied customers
● Damaged goods
● Problem employees

Is litigation the only option for resolving legal disputes?
● Alternative Dispute Resolution (ADR) ­ A range of options for resolving disputes as an
alternative to litigation
● Advantages of ADR:
○ May preserve confidentiality
○ May preserve relationship
○ Can be less costly
○ Can be less time consuming
○ Each side can agree on an outcome it can live with, whereas in litigation, only
one side can win

ADR Options: Negotiation ­ A problem solving process in which parties discuss their differences
and attempt to reach a mutually agreeable resolution
○ Can be used to resolve virtually any type of dispute
○ Lawyers can be of assistance
○ If the loss is one for which there is insurance, the insurer should carry out the
negotiations or insurance coverage can be jeopardized

ADR Options: Mediation ­ A neutral person, called a mediator, assists the parties in reaching a
settlement of their dispute
● Can be used for most disputes
● Parties choose the mediator
● Mediators DO NOT make decisions. Rather, they facilitate discussions that lead to the
parties resolving the dispute voluntarily

, ● Has a high success rate, but each side must be ready to compromise
● Popular because, as with negotiation it:
○ Less expensive and quicker
○ Private and confidential if the parties choose
○ Helps to preserve the relationship between parties
○ Can result in a resolution tailored to the needs of the parties

ADR Options: Arbitration ­ A third person, call an arbitrator, appointed by the parties makes a
decision. It is similar to litigation in that it usually involves a hearing where the parties or their
representatives make submissions and the resolution is outside the control of the parties
● When is arbitration used?
○ Works particularly well for most commercial and business disputes because the
parties can select an arbitrator with relevant experience and keep commercially
sensitive information private
○ Can be agreed upon by the parties at any time
● When is it used?
○ Very common in international contracts, significant commercial contracts
○ Parties can agree in contract not to sue and use arbitration to resolve disputes
● How arbitration works
○ The parties may agree on an arbitrator or they may have a third party choose an
arbitrator. There are no mandatory qualifications
○ The parties decide on the rules for conducting the arbitration
○ May establish their own rules or incorporate rules set out in the arbitration
statutes or developed by a recognized body such as the ADR Institute of Canada
○ At the end of arbitration, the arbitrator renders a decision
○ The finality of the decision depends on what the parties have agreed to
beforehand
○ The award, unless it is overturned or varied on appeal, is binding and enforcable
by the court

The Litigation Process
● Arises when one party brings a legal action against another
● Should be a last resort when other methods have failed
● Plaintiff ­ The party that initiates a lawsuit against another party
● Defendant ­ The party being sued

Private (Civil) Litigation
● Must be brought by the person claiming the loss at their own cost
● Each province has its own rules for civil litigation
● Some provinces have “small claim courts” that hear lawsuits involving smaller claims.
Usually a lawyer is not required and the process is quicker and less expensive

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