Business Law Essay

Submitted By hchungh92
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Pages: 5

Chapter 2 – Introduction to the Legal System

What is Law?

Law: body of rules made by government that can be enforced by the courts or by other government agencies
Includes persons dealing with government agencies (ie – workers’ comp, city and municipal councils)
Law does not suggest morals, and vice-versa

Categories of Law

Two primary categories of law:
Substantive Law: rights an individual has on society
Public Law: laws that affect individual’s relationship with government
Private Law: laws that affect individual’s relationship with other individuals

Procedural Law: how substantive laws will be enforced

Origins of Law

Civil Law

Originated in Roman Empire
19th century, revised by Napolean into Napoleonic Code
Civil Code: list of rules stated as broad principles of law that are enforced by judges
Not required to follow other similar cases’ decision. Two similar cases may have different decisions

Common Law

Originated in British Empire
Common Law/Stare decisis: following precedent; foundation based on local custom and traditions
Judges required to follow each other’s decisions
Decision of judge at one level is binding on all judges in court hierarchy of lower rank provided the two cases are similar

Distinguishing facts: judge attempts to avoid applying precedent decision by finding essential differences between facts of two cases if prior decision will create injustice in present case

Sources of Law

Common Law

Common law courts: early stages of common law, three great courts created:
Court of common pleas
Court of king’s bench
Exchequer court

Judges did not create law, merely discovered it through customs and traditions
Complete legal system could not be supplied by only local traditions and customers, so common law judges borrowed from:
Roman civil law
Church law (Canon)
Law merchant


Court of Chancery/Court of Equity: King appointed a chancellor, who appointed several vice-chancellors, to remedy issues that could not be handled fairly by common law courts
Law of equity: law developed by Court of Chancery. Court was unhampered by rules of precedence and could decide cases on own merits
No uniformity within system, difficult to predict outcome of given case
Caused friction between common law and chancery judges. Remedied when chancery adopted stare decisis
Caused same problems as common law courts
Became rigid and inflexible as common law courts

Two court systems merged, but bodies of law did not (best to think as 2 separate bodies of rules)
Judges treated matters differently under common law or equity


17th century, English Civil War established Parliament was supreme, not king
Parliament handled any major modifications to law
Parliament enactments, called statutes or legislation, override judge-made law based on common law or equity
Government has 3 functions:
Legislative – parliament creates law
Judicial – court system interprets and makes case law
Administrative – administer and implement that law

Law in Canada


Constitution Act created Dominion of Canada, divided power between legislative, executive, and judicial branches of government, and determined functions and powers of provincial and federal government
Constitution is the rulebook the government must follow. Has 3 elements:
Includes the Constitution Act

Unwritten rules dictating how government is to operate
Rule of Law: although Parliament is supreme and can create any law considered appropriate, citizens protected from arbitrary actions of government (government is not higher than the law)

Case law on Constitution issues
Determines whether federal or provincial government has jurisdiction to create certain statutes

Constitution and Division of Power

Constitution Act separated legislative powers between:
Federal government (section 91)
Taxation, environmental concerns, money, banking