Bus 393 Commercial Law | SFU Midterm review good

Rules, Process, Strategy

Rules (what does the law say and why), Process (how does the legal system actually apply and enforce those rules), and Strategy (given the Rules and Process, what should a business do — including risk management).

Risk

The possibility of a negative outcome (financial, legal, reputational) resulting from a business's activities or decisions.

Legal Risk

Risk specifically arising from laws, regulations, contracts, or potential lawsuits.

Risk Identification

The first step in risk management: figuring out what rules/laws apply to a situation and what could go wrong.

Risk Evaluation

The second step: assessing whether the business is complying with the relevant rules, and what the consequences (legal, financial, reputational) would be of non-compliance.

Risk Response / Strategy

The third step: deciding what to actually do about an identified and evaluated risk.

Risk Avoidance

A risk management strategy where a business chooses not to engage in an activity at all because the risk is too high.

Risk Reduction

Managing risk by taking steps (training, supervision, policies, product testing) to lower the likelihood or severity of harm.

Risk Shifting

Transferring risk to another party, most commonly through insurance, contracts, or indemnity/exclusion clauses.

Risk Acceptance

Choosing to proceed with an activity and absorbing the risk as a cost of doing business (sometimes because avoidance/reduction/shifting isn't practical).

Insurance

A risk management technique where a business pays premiums to transfer the financial consequences of certain risks to an insurer.

Exclusion / Limitation Clauses

Contract terms that attempt to exclude or limit a party's liability for certain types of harm or loss.

Incorporation

Forming a corporation, which creates a separate legal entity and gives owners limited liability — a key risk management technique.

Cost-Benefit Analysis

Weighing the cost of complying with a rule against the cost of not complying (including potential fines, lawsuits, and reputational damage) to decide on a strategy.

Compliance / Non-Compliance

Whether a business is or is not following the applicable laws and regulations; businesses must weigh the costs of each.

Civil Law

The branch of law dealing with disputes between private parties (individuals, businesses) where a plaintiff sues a defendant for compensation

Criminal Law

The branch of law where the government prosecutes a person or business for an offence against society, with penalties including fines or imprisonment.

Plaintiff

The party who brings (initiates) a civil lawsuit, seeking a remedy from the defendant.

Defendant

The party being sued (in civil law) or prosecuted (in criminal law).

Damages

A monetary award given to a successful plaintiff to compensate for their loss.

Statute

A law enacted by a legislative body (federal, provincial, or municipal government) — also called legislation or an "Act."

Common Law

Law developed through court decisions (judicial precedent) rather than through legislation.

Jurisdiction

(1) The authority of a particular court or government body to make or apply law over a certain matter or geographic area; (2) more generally, a region/country with its own legal system.

Federalism / Division of Powers

The constitutional division of law-making authority between the federal government and the provinces in Canada; some areas overlap, leading to potential conflicts that courts must resolve.

Constitution Act

The foundational Canadian law that divides law-making authority between federal and provincial governments and includes the Charter of Rights and Freedoms.

International Law / Treaties

Agreements between countries (e.g., the Paris Convention on Climate Change) and the domestic laws of other countries, which can affect Canadian businesses operating abroad.

Nevsun Case

A 2020 Supreme Court of Canada decision holding that a Canadian (Vancouver-based) mining company could be sued in Canada for alleged human rights abuses (forced labour, slavery, torture) committed abroad (Eritrea) — establishing that Canadian courts' reach can extend to a company's overseas conduct.

Act of State Doctrine

A legal principle (rejected as a defence in the Nevsun case) that courts of one country should not judge the sovereign acts of another country's government.

Peremptory Norms of Customary International Law

Fundamental principles of international law (such as prohibitions on slavery and torture) considered so important that they override other legal doctrines — used in Nevsun to allow the lawsuit to proceed.

Charter of Rights and Freedoms

Part of Canada's Constitution guaranteeing fundamental freedoms (speech, association, etc.) and rights (equality, due process) that apply to government action and have significant implications for business regulation.

Freedom of Speech

A Charter right relevant to what businesses can say in advertising and public communications.

Freedom of Association

A Charter right (s. 2(d)) that includes the right of employees to unionize and engage in collective bargaining.

Freedom from Discrimination

Protection under Charter s. 15 and human rights legislation against discrimination based on protected characteristics (race, sex, age, disability, etc.), subject to the limits in Charter s. 1.

Canadian Bill of Rights

An earlier (pre-Charter) federal human rights statute that still has some application.

Provincial Human Rights Acts

Provincial statutes (e.g., BC Human Rights Code) that prohibit discrimination by private parties, including businesses, not just governments.

Procedural Law

The rules governing how a legal claim is initiated and carried through the court system (filings, deadlines, trial, appeals).

Litigation

The process of resolving a legal dispute by suing in court.

Statement of Claim

The document filed by a plaintiff that sets out what they are claiming and the legal basis for the claim.

Statement of Defence (and Counterclaim)

The document filed by a defendant responding to the claim, which may include the defendant's own claim against the plaintiff (counterclaim).

Examination for Discovery

A pre-trial process where each side questions the other (and reviews evidence) to assess the strength and reliability of the case.

Limitation Period

The deadline by which a legal claim must be started; after this period expires, the claim is generally barred.

Small Claims Court

A simplified, lower-cost court for claims under a certain monetary threshold (under $35,000 in BC, or up to $50,000 for motor vehicle claims).

Trial Court vs. Appeal Court

Trial courts hear cases first and make findings of fact and law; appeal courts review trial court decisions for legal errors.

Supreme Court of Canada (SCC)

Canada's highest court and final court of appeal.

Trial

The proceeding where evidence, witnesses, and arguments are presented to a judge (and sometimes a jury), who then renders a decision.

Precedent

The principle that courts must follow the legal reasoning of previous decisions (especially from higher courts) on similar facts, promoting consistency and predictability.

Appellant / Respondent

On appeal, the party appealing the decision (formerly the losing party) becomes the appellant; the other party becomes the respondent.

Remedies

What a court can award a successful party — typically damages (money), but also injunctions or other orders; courts cannot always restore what was lost (e.g., something destroyed).

Empty Judgment

A situation where a plaintiff wins a case and is awarded damages but cannot actually collect because the defendant has no assets, is bankrupt, or is outside the court's jurisdiction.

Vicarious Liability

Legal responsibility imposed on one party (e.g., an employer) for the wrongful acts of another (e.g., an employee), even where the first party did nothing wrong itself.

Burden of Proof

The obligation to prove one's case; in civil cases, this rests with the plaintiff.

Standard of Proof

The level of certainty required to win a case.

Balance of Probabilities (BOP)

The civil standard of proof: the plaintiff must show it is "more likely than not" (over 50%) that their claim is true.

Beyond a Reasonable Doubt (BARD)

The much higher criminal standard of proof, required because the government is seeking to punish (including imprisonment).

Physical Evidence vs. Testimonial Evidence

The two main categories of evidence: tangible items (documents, photos, objects) versus witness testimony.

Class Action

A lawsuit brought by one or more plaintiffs on behalf of a larger group ("class") who suffered similar harm from the same defendant; reduces costs and combines evidence, but requires court certification of the class.

Certification

The court process of formally recognizing a group of plaintiffs as a "class" so their claims can proceed together as a class action.

Administrative Tribunal

A specialized government body that resolves disputes in a particular regulatory area (e.g., human rights, labour, employment standards, securities), generally faster, cheaper, and more expert than courts.

Alternative Dispute Resolution (ADR)

Methods of resolving disputes other than going to court.

Negotiation

An informal process where the parties try to reach a resolution directly.

Settlement

An agreement reached by the parties (often through negotiation) that resolves the dispute without (or during) trial.

Mediation

A process using a neutral third party (mediator) to help the disputing parties reach a voluntary, non-binding resolution.

Arbitration

A more formal ADR process where a neutral arbitrator hears both sides and issues a binding decision — common in commercial and international contracts.

Patent

A government-granted exclusive right to an invention for a limited time, referenced in the discussion of how Juul and Purdue Pharma used patents to build their businesses.

Material Adverse Effect (MAE) Clause

A contract clause (often in business purchase agreements) that can allow a party to walk away from a deal if a significant negative event occurs — discussed in the context of whether COVID-19 could let a buyer exit a business purchase.

Bona Fide Occupational Requirement (BFOR)

A genuine job requirement that can justify what would otherwise be discriminatory treatment (introduced here in the COVID context — e.g., requiring immunity/vaccination — and developed fully in the Employment Law deck).

Tort

A civil (private) wrong — an act causing harm to a person, their property, or their reputation — that gives the injured party the right to sue for a remedy (usually damages). Distinct from a crime, though the same conduct can sometimes be both.

Intentional Tort

A tort where the defendant deliberately committed the act that caused the harm (it does not require intent to cause harm specifically — just intent to do the act).

Negligence

Unintentional conduct that causes harm because the defendant failed to meet the required degree of care ("carelessness").

Strict Liability

Liability imposed for certain inherently dangerous or unusual activities regardless of intent and regardless of how careful the defendant was.

Rylands v. Fletcher (Rule in)

The classic strict liability rule: if someone makes a "non-natural use" of land and something escapes from it causing injury (e.g., a pipeline rupture spilling oil into a river), they are liable even without negligence or intent.

Non-Natural Use

An unusual or inherently hazardous use of land (as opposed to ordinary use) that can trigger strict liability under Rylands v. Fletcher.

Assault

The threat of imminent, unwanted physical contact (does not require actual contact).

Battery

Actual unwanted physical contact with another person, without a valid defence (such as self-defence or informed consent).

False Imprisonment

Unlawfully detaining or confining someone without legal authority (e.g., a private citizen detaining someone without the authority police have).

Trespass

Entering land or property without permission, regardless of whether the person knew they weren't allowed to be there.

Nuisance (Interference with Chattels)

Unreasonably interfering with another person's use or enjoyment of their property — e.g., escaping water, noise, or fumes.

Invasion of Privacy

Not a standalone tort in itself in this framework, but a harm typically addressed through other torts/protections such as trespass or misuse of private information.

Defamation

A false statement that would cause a "reasonable person" to think less of the plaintiff; harms reputation and/or causes financial loss. Not protected by freedom of speech.

Slander vs. Libel

Slander is spoken defamation; libel is written (or otherwise published/recorded) defamation.

Deceit

A false statement made by a business that it knows is false, intended to mislead, and that causes a loss.

Injurious Falsehood

A false statement about a business (e.g., about its property or product quality) that causes a financial loss, even if not intended to cause harm.

Elements of Defamation

(1) Publication (communication of the statement to others), (2) that is false and derogatory, (3) that refers specifically to the plaintiff, and (4) that causes harm (to reputation or financially).

Truth / Justification (Defence)

A defence to defamation where the defendant proves the statement was actually true (the burden is on the defendant to prove truth).

Absolute Privilege (Defence)

A defence protecting certain types of speech (e.g., statements made in Parliament or in court proceedings) from defamation claims, regardless of harm.

Qualified Privilege (Defence)

A defence protecting statements made honestly, without malice, where there's a duty to disclose (e.g., an employment reference).

Public Interest Responsible Journalism (Defence)

A defence for journalists reporting responsibly on matters the public has a legitimate interest in, even if some statements turn out to be false.

Fair Comment (Defence)

A defence allowing honestly-held opinions on matters of public importance (e.g., about politicians or public figures), even if the opinion is derogatory and ultimately found false, as long as it was a "responsible" attempt to find the truth.

Duty of Care

Whether the defendant owed the plaintiff a legal obligation to be careful — assessed using foreseeability and proximity (see Donoghue v. Stevenson / Anns test below).

Standard of Care

The degree of care the defendant was required to exercise — judged against what a "reasonable person" (or reasonable business/professional) would do in the same circumstances.

Causation

Whether the defendant's failure to meet the standard of care actually caused the plaintiff's harm.

Harm / Damage

Whether the plaintiff suffered a loss that the legal system recognizes and can measure (not all forms of harm, like hurt feelings alone, are compensable).

Donoghue v. Stevenson Test

The foundational case establishing that manufacturers/individuals owe a duty of care to those who could reasonably and foreseeably be affected by their actions ("neighbour principle").

Anns Test

A two-stage test for duty of care: (1) is there sufficient proximity and reasonable foreseeability of harm between the parties, and if so, (2) are there policy reasons that should nonetheless negate or limit that duty?

Reasonable Foreseeability

Whether a reasonable person in the defendant's position would have foreseen that their conduct could harm someone like the plaintiff. "Reasonable" is narrower than merely "possible."

Proximity

The closeness of the relationship between the defendant and plaintiff — a key factor in whether a duty of care exists.

Policy Reasons (Negating Duty of Care)

Broader considerations (e.g., not wanting to impose unrealistic costs on governments providing public services) that can lead a court to conclude no duty of care exists even where harm was foreseeable.

Reasonable Person

The legal benchmark for ordinary negligence: a hypothetical careful and prudent person, a higher standard than just an "average" person.

Professional Standard of Care

A higher standard applied to professionals (doctors, lawyers, accountants), with no allowance made for inexperience.

Industry Standards

For businesses, the standard of care is often assessed by comparing their conduct to common practices in their industry.