Chapter 2 Law

What is the difference between substantive law and procedural law?

• Substantive law gives people rights and obligations.

• Procedural law explains how those rights and obligations are enforced.

what does precendent mean?

an earlier event that serves as an example for how to handle similar situations in the future

What is the difference between public law and private law?

Public law regulates relationships between government and private citizens.

Private law regulates relationships between private persons or businesses.

What is the civil law system?

A legal system where the Civil Code is the main source of private law, and courts rely more on the code than past cases.

What is common law?

A case-based legal system from England that relies on recorded court decisions and judges’ reasons.

What is the main difference between civil law and common law?

• Civil law values legislation/code over case law.

• Common law gives case law major importance, sometimes equal to or greater than legislation.

What does stare decisis mean?

“To stand by a previous decision,” meaning lower courts usually must follow decisions of higher courts.

When are judges bound by precedent?

Judges are bound by decisions of higher courts. Lower court decisions may influence them but are not binding.

How does precedent create both certainty and flexibility?

It creates certainty because similar cases are treated similarly, but flexibility because judges can distinguish cases based on different material facts.

What are statutes, regulations, and bylaws?

Statutes are laws passed by Parliament or legislatures, regulations are rules made under a statute, and bylaws are laws made by municipal governments.

What is subordinate legislation?

Law made by administrative agencies under authority given by a statute.

What does it mean to codify law?

To summarize existing common law rules into a statute.

What is the difference between passive and active legislation?

Passive legislation states rules but leaves enforcement to injured parties or officials.

Active legislation creates programs, agencies, or systems to supervise and enforce the law.

What is the difference between the literal and liberal approach to interpreting legislation?

• The literal approach uses the ordinary or dictionary meaning of words.

• The liberal approach looks at the law’s context, purpose, and intent.

What is equity?

Fairness-based rules developed by courts of equity to fix harsh or unfair results from common law.

What are equitable remedies?

Remedies created by courts of equity when money damages are not enough, such as specific performance.

What happened to common law courts and equity courts?

They merged into one court system, but modern courts still apply both common law and equity principles.

What is a class action?

A lawsuit where one person or a small group represents many people with similar claims.

Why are class actions useful?

They avoid repetitive lawsuits, prevent inconsistent results, improve access to justice, and help deter wrongful behaviour.

What does certification mean in a class action?

The court approves the lawsuit as a class action because there is an identifiable group, common issues, and a class action is the preferable procedure.

What does res judicata mean?

The matter has already been decided by a court and cannot be brought again.

What are litigation costs?

Legal fees and disbursements a party pays to bring or defend a lawsuit.

What is the “loser pays” rule?

The losing party usually pays some of the winning party’s legal costs.

Why is litigation a business risk management issue?

A business must consider the chance of losing, legal costs, time, delay, business relationships, and whether the amount claimed is worth suing for.

What is a contingency fee?

A fee paid to a lawyer only if the client wins or collects money. If the client loses, there is no fee for the lawyer’s services.

What is settlement?

When one party agrees to pay money or do something in exchange for the other party giving up the legal claim.

Why do parties settle out of court?

Settlement is faster, cheaper, avoids trial risk, and can preserve business relationships.

Why do courts encourage settlement?

Because trials are expensive, slow, uncertain, and can create delays in the court system.

What can happen if a party refuses a reasonable settlement offer?

The court may later punish that party through costs if the trial result is similar to the rejected offer.

What is ADR?

Alternative dispute resolution, meaning private ways to resolve disputes without going to court.

What is arbitration?

A form of ADR where a neutral third party hears both sides and makes a binding decision.

What is mediation?

A form of ADR where a neutral third party helps the parties reach their own settlement, but does not make a binding decision.

What is the main difference between courts, arbitration, and mediation?

• Courts are public, binding, appealable, and create precedent.

• Arbitration is private, binding, and has limited appeals.

• Mediation is private, non-binding, and focuses on settlement.

Why might businesses prefer ADR over court?

ADR is usually cheaper, faster, confidential, allows parties to choose the mediator or arbitrator, and may preserve relationships.