1 Areas of law affecting a business

2 Legal duties arising from business activities

3 Legal rights of groups affected by business activities

1 Areas of law affecting a business

1.1 Civil law and criminal law

  Criminal CivilPurpose Punishment CompensationParties State v defendant Plaintiff v defendant

Outcome Guilty or not guilty Plaintiff wins or loses

Consequence If convicted, then sentenced If he wins, obtains a remedy

Courts Magistrates, or Crown court County or high court

Costs Legal aid; If convicted, pay costs

Legal aid; Loser pays all costs

Facts Magistrate or jury Judge

Law Judge JudgeStandard of

ProofBeyond reasonable doubt On balance of probability

Example Murder, theft Contract, property

1.2 Contract and Tort

Contact Tort

Liability is voluntarily undertaken Liability is imposed by Courts

Liability is strict Liability is based on fault

Put the injured as if contract had been performed

Put the injured as if tort had never been committed

1.3 Consumer law

1.4 Employment law

1.5 Property law

(1) Real property

(2) Personal Property

1.6 Financing law

(1) Loan

(2) Bond

(3) Shares

(4) Security for loanN

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Grasso

Skyworth:黄宏生

2 Legal duties arising from business activities

2.1 Civil duties and criminal duties

2.2 Common law duties and statutory duties

(1) Most of such rules are statutory

(2) They are applied with equal vigor

(3) Common law rules shall not contradict statue

2.3 Limited and unlimited liability

(1) Unlimited liability in usual civil cases

(2) Owner of corporation may have limited liability

(3) Carrier under maritime law

2.4 Fault based liability and strict liability

(1) Almost all common law liability in tort is fault based

(2) Consumer protection, strict liability

(3) Employer liability

(4) Legal duties may overlap.

Small bakery, supermarket, contract○ Main problem: loaves do not feed properly through

slicing and wrapping machine; called fitter to the machine several times, un-repaired; guard was removed; Operator was requested to manually push the loaf.

○ Operator slips, his hand makes contact with the blades of slicing machine, badly injured; three fingers lost.

○ Unable to deliver goods to supermarket. Only half of the order was performed.

○ One loaf contained a metal bolt falling from slicing machine. Customer broke a teeth when he bit the bolt.

Case study 1

Legal duties:

(1)Bakery are liable to be prosecuted under Criminal law

(2)Bakery to employee: tort of negligence(3) Bakery violated contract(4)Supermarket are strictly liable(5)Bakery are strictly liable(6) If the bakery is partnership, partners are

jointly liable

3.1 Employees

(1) Collective bargain

(2) Mandatory worker compensation

3.2 Consumers and customers

3.3 Shareholders

(1) Minority protection

(2) Derivative action

3 Legal rights of groups affected by business activities

3.4 Creditors

(1) Security

(2) Bankruptcy

3.5 Community

(1) Tort

(2) Urban planning

3.6 The State

(1) Criminal law enforcement

(2) Framework for dispute settlement

(3) Government regulation on business affairs

(4) State owns big business.

Questions :What legal liabilities arise from the following

cases:

(1) Accountant steals money from client

(2) Company newsletter mistakenly stated an ex-employee has been convicted

(3) Company driver took a short cut across farmer’s land damaging crops

(4) Self-employed technician buys a van with stolen cheque

(5) Partners in partnership drive firm’s van without taxing or insuring it

(6) Company director burns company documents.