Introduction to the Canadian Legal System and Business Law

Introduction to the Study of Law

Types of Legal Liabilities

  1. Contractual Liability
  2. Tort Liability
  3. Product Liability
  4. Professional Liability
  5. Vicarious Liability
  6. Environmental Liability
  7. Corporate Liability
  8. Employment Liability

Contractual Liability

Contractual liability arises when a party fails to fulfill the terms of a contract. This can include:

  • Breach of Contract: Failure to perform any term of a contract without a legitimate legal excuse.
  • Remedies for Breach: The non-breaching party can seek damages, specific performance, or cancellation and restitution.

Tort Liability

Tort liability arises from civil wrongs that cause harm or loss to others, not arising from contractual obligations. Key types include:

  • Negligence: Failure to exercise reasonable care, resulting in harm to another person.
  • Intentional Torts: Deliberate acts that cause harm, such as assault, battery, false imprisonment, defamation, and fraud.
  • Strict Liability: Liability without fault, typically in cases involving abnormally dangerous activities or defective products.

Product Liability

Product liability holds manufacturers, distributors, suppliers, and retailers accountable for injuries caused by defective products. It can be based on:

  • Negligence: Failure to exercise reasonable care in the manufacturing or marketing of the product.
  • Breach of Warranty: Failure to fulfill the terms of a promise or claim made about the quality or type of product.
  • Strict Liability: Liability without fault, holding the manufacturer or seller responsible for defective products regardless of fault.

Professional Liability

Professional liability (also known as malpractice) pertains to professionals who fail to perform their duties to the required standard of care, leading to client harm. Examples include:

  • Medical Malpractice: Negligence by a healthcare provider.
  • Legal Malpractice: Negligence by a lawyer.
  • Accounting Malpractice: Negligence by an accountant.

Vicarious Liability

Vicarious liability occurs when one party is held liable for the actions of another party, such as:

  • Employer Liability: Employers can be held liable for the wrongful acts of their employees if the acts occur within the scope of employment.
  • Principal-Agent Liability: Principals can be held liable for the acts of their agents performed within the scope of their authority.

Environmental Liability

Environmental liability arises from damage caused to the environment and can include:

  • Pollution and Contamination: Businesses can be held liable for releasing pollutants into the environment.
  • Regulatory Non-compliance: Failing to comply with environmental laws and regulations can result in fines and sanctions.

Corporate Liability

Corporate liability refers to the legal responsibilities of a corporation as a separate legal entity. This can include:

  • Criminal Liability: Corporations can be prosecuted for crimes committed by their employees or agents.
  • Civil Liability: Corporations can be sued for breaches of duty, such as breaches of fiduciary duties by directors and officers.

Employment Liability

Employment liability covers the obligations of employers towards their employees, such as:

  • Wrongful Termination: Terminating an employee in violation of employment laws or contracts.
  • Discrimination and Harassment: Failing to prevent or address discrimination or harassment in the workplace.

Legal Risk Management

  1. Identification: Recognize legal risks. “Can we be held liable for this?”
  2. Evaluation: Assessment of legal risks. “What are the chances of something going wrong?”
  3. Response: Reaction to legal risks. “What are we going to do about it?”

Legal Risk Management Strategies

Risk AvoidanceEliminate riskWithdraw a dangerous product from the market
Risk ReductionMinimize riskModify a product to reduce danger
Risk ShiftingMake risk someone else’s problemBuy liability insurance for losses caused by danger
Risk AcceptanceLive with the riskDo nothing

The Canadian Legal System

Sources of Canadian Law

  1. Statutory Law: Laws made by legislatures.
  2. Common Law: Laws developed through court decisions.
  3. Constitutional Law: Laws that define the structure of government and the rights of citizens.

The Constitution

The Constitution is the supreme law of Canada. It outlines the structure of government and fundamental rights, overriding any conflicting laws.

Canadian Federalism

Canadian federalism features a division of powers where the federal government handles national concerns, while provinces manage local matters.

Charter of Rights and Freedoms

The Charter guarantees fundamental freedoms, democratic rights, mobility rights, legal rights, and equality rights. It applies to all government actions.


Legislation is created by Parliament or provincial legislatures. Subordinate legislation (regulations) is made by authorized bodies under the authority of a statute.

Canadian Court System

The hierarchy includes:

  • Supreme Court of Canada (highest court)
  • Appellate Courts
  • Superior Courts (e.g., BC Supreme Court)
  • Lower Courts (e.g., BC Provincial Court)
BC Provincial Court


  • Small claims
  • Family matters
  • Traffic offenses
  • Criminal cases
BC Supreme Court


  • Serious criminal cases
  • Civil cases over certain monetary thresholds
  • Appeals from lower courts

Civil Resolution Tribunal

The Civil Resolution Tribunal is an online dispute resolution body for small claims and strata property disputes in British Columbia.


Appeals review the legal correctness of a trial court’s decision without re-trying the case. Trials involve examining evidence and determining facts.

Court Costs

Court costs are expenses associated with legal proceedings, often awarded to the winning party to help cover their legal fees. They are intended to deter frivolous lawsuits.

Class Actions

A class action is a lawsuit where a group of people with similar claims sue collectively, providing efficiency and access to justice for individuals with smaller claims.


Mediation is a process where a neutral third party helps disputing parties negotiate a mutually acceptable solution.


Arbitration is a process where a neutral third party makes a binding decision to resolve a dispute outside of court.

Mediation vs. Arbitration

Mediation is non-binding and focuses on negotiation, while arbitration results in a binding decision similar to a court judgment.

Benefits of Arbitration

Arbitration is typically faster, less formal, and can be less costly than traditional court litigation.

Drawbacks of Arbitration

Drawbacks include limited grounds for appeal, potential costs, and less transparency compared to public court proceedings.

Choices of Law and Forum

Choices of law determine which jurisdiction’s laws will apply. Choices of forum determine which court or venue will hear the dispute.

Enforcement of Foreign Judgments and Arbitration Awards

Foreign judgments and arbitration awards are enforced through domestic courts, which recognize and enforce them under international treaties and reciprocal agreements.


What is a Tort?

A tort is a wrongful act that causes harm to someone, leading to legal liability.

Purpose of Tort Law

The purpose of tort law is to compensate victims for harm caused by others, deter wrongful conduct, and promote justice.

Intentional Torts vs. Negligence

Intentional torts involve deliberate actions that cause harm, while negligence involves failing to take reasonable care, resulting in accidental harm.

Intentional Torts

Deceit/Fraudulent Misrepresentation

Definition: Intentionally providing false information to cause someone to act to their detriment.


  • False statement
  • Knowledge of falsity
  • Intent to deceive
  • Reliance by the victim
  • Resulting harm


  • Truth
  • No reliance by the victim
  • No intent to deceive


Definition: Making a false statement that harms someone’s reputation.


  • Publication of the statement
  • Falsity
  • Harm to reputation
  • No privilege


  • Truth
  • Absolute or qualified privilege
  • Fair comment

Inducing a Breach of Contract

Definition: Persuading someone to break a contract with another party.


  • Knowledge of the contract
  • Intent to cause breach
  • Actual breach
  • Resulting harm


  • Justification
  • Lack of knowledge
  • No intent to cause breach

Vicarious Liability

Definition and Explanation: Vicarious liability holds an employer legally responsible for the wrongful acts of their employees committed during the course of their employment.


Duty of Care

Definition: Legal obligation to avoid causing harm to others.

Application: Must show the defendant owed the plaintiff a duty of care.

Standard of Care

Definition: The level of care that a reasonable person would exercise in similar circumstances.

Application: Must show the defendant failed to meet this standard.

Causation of Harm

  • Factual Causation: The harm would not have occurred “but for” the defendant’s actions.
  • Legal Causation: The harm was a foreseeable result of the defendant’s actions.

Defenses to Negligence

  • Contributory Negligence: The plaintiff also acted negligently and contributed to their own harm.
  • Failure to Mitigate: The plaintiff did not take reasonable steps to reduce their harm.
  • Voluntary Assumption of Risk: The plaintiff knowingly accepted the risk of harm.

Product Liability

Careless Manufacturing

Definition: Defects in the manufacturing process that make the product unsafe.

Standard of Care: Must show the manufacturer did not exercise reasonable care during production.

Careless Design

Definition: The product design itself is inherently unsafe.

Standard of Care: Must show the design did not meet safety standards.

Failure to Warn

Definition: Not providing adequate warnings about the product’s risks.

Standard of Care: Must show the manufacturer knew or should have known about the risks and failed to warn users.