Chapter 1: Knowledge of law as a business asset
The knowledge of law is a business asset that can assist owners and managers in reaching their
goals and objectives. This is because business law:
1. Defines the general rules of commerce
2. Protects business ideas and more tangible forms of property
3. Provides mechanisms that permit businesspeople to select their desired degree of
participation and exposure to risk in business ventures
4. Seeks to ensure that losses are borne by those who are responsible for them
5. Facilitates planning by ensuring compliance with commitments.
In short, business law is a set of established rules governing commercial relationships, including
the enforcement of rights.
A trademark is a word, symbol, design or any combination of these used to distinguish a
person’s products or services from those of others.
The law is a set of rules and principles guiding conduct in society, primarily by protecting
persons and their property, facilitating personal and commercial interactions, and providing
mechanisms for dispute resolution.
Protecting Persons & Their Property
PIPEDA – Personal Information Protection and Electronic Documents Act
One of its goals is to regulate how the private business sector collects, uses and discloses
personal information acquired from its customers.
Personal Information is information that is uniquely and directly connected to one person.
Such information includes “age, name, ID numbers, income, ethnic origin, or blood type” as
well as credit reports and medical reports.
PIPEDA includes an overriding obligation that the collection, use and disclosure of personal
information be limited to what a “reasonable person would consider are appropriate in the
circumstances.”
The Privacy Commission is independent from the government and is mandated to resolve
complaints that fall under the PIPEDA.
A class action is a lawsuit launched by someone who represents a class of persons having
similar claims against the same defendant.
The law offers protection in two ways:
1. It sets rules to safeguard interests
2. It sets penalties and other consequences for breach of those rules to ensure
accountability and encourage future compliance.
A breach of contract is failure to comply with a contractual promise.
Facilitating Interactions
The law facilitates personal interactions by providing rules concerning marriage, adoption, and
the disposal of property upon the owner’s death, to name a few examples.
The law facilitates commercial activity by providing rules governing the marketplace.
For instance, the law of contract provides a way for parties to enter into binding agreements,
thereby creating a measure of security and certainty in their business operations.
Contract law consists of rules that make agreements binding and therefore, allows businesses
to plan for the future and to enforce their expectations.
The law addresses failed relations, but it is primarily about preventing disputes and facilitating
relationships in order to provide structure and certainty for planning. The creation of certainty
in business relationships is one of the most important contributions that law can make to the
commercial arena.
Litigation – the process involved when one person sues another.
Providing Mechanisms for Dispute Resolution
The first logical step after a legal dispute is for parties to try to come to a resolution between
themselves and produce, if necessary, a formalised settlement agreement. If this solution does
not work, the legal system offers:
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Mediation: A process through which the parties to a dispute endeavour to reach a
resolution with the assistance of a neutral person
Arbitration: A process through which a neutral party makes a decision (usually binding)
that resolves a dispute.
Liability: Legal responsibility for the event or loss that has occurred.
How and Why the Law works
The Canadian legal system demands that both the process for determining liability and the
rules/laws that are applied in that process are impartial, fair, and free from bias.
A legal risk management plan is a comprehensive action plan for dealing with the legal risks
involved in operating a business. It means identifying the legal risks associated with a business
and implementing concrete measures for managing those risks. The object is to identify and
plan for risks before they occur.
Business ethics are a set of moral principles and values that seek to determine right and wrong
in the business world. It is ethical for a business to comply with the law, but ethics may demand
even more.
Business ethics require entrepreneurs to conform to principles of commercial morality, fairness
and honesty.
Regulatory arbitrage – UBER; Follow some rules, try to skirt around some and break some.