-The Partnership Act

-Court made Law

-Partnership Agreement between partners

(This sets out what each partners obligations/hours/share etc are in the company)

Partnerships are formed when all persons have agreed to be partners through:

-Express agreement-> Expressly agree to be partners

-Implied Agreement-> The court decides its a partnership if the behaviour of the persons amounts to a partnership.

1)unlimited liability

2)Joint and several liability (When you get sued all partners are sued.  The plaintiff can get money from any of the partners regardless of percentage owned)

3)Every partner is an agent of the firm and all the partners for business of the kind carried on by the firm.

4)Retiring partners still liable for obligations incurred while they were a partner

5)Newly admitted partners are not liable for obligations existing prior to their joining

6)Retiring partners can still be liable for things done after their departure via estoppel

When the partner leaves the partnership they must:

-Send a letter to parties that are normally dealt with saying you are leaving the partnership

-Ensure your neam is taken off of all letters

-If the name of the business has been registered, the companies office must be notified

-Place a notice in the monthly manitoba gazette

-Partnerships allow owners to pool knowledge, skills and financial and physical resources

-Allows people to carry out common goals together with a set of rules governing their relationship

-Lots of liability (points1-4 and 6 in liability)

-compared to sole proprietorship it costs more time and money to properly set up a partnership.

They are not manditory but are good to have because:

It sets out responsibilties, hours worked, how to deal with disagreement, what happens if a partner dies etc

It gives protection to lawyers/ accountants.

example, a law partnership can have different partners (family, criminal and corporate commercial) if the family lawyer screws up it has no effect on the other lawyers (they are not liable)

A shareholder owns part of the business but has no say in managing the business.  The two types are common and preferred.

-Common- people who have some voting power as to what goes on in the company (one share= one vote)

-Preffered- non-voting shareholders but are usually given a guaranteed return on investment

-Limited liability- If sued, can only go after the assets of the corp. not the assets of the shareholders.

-Continuous existance

-Ease of Transfer of Ownership- You can easily sell or buy shares.

-Loyalty of shareholders- In a partnership you owe a fiduciary duty to your partners, meaning you have to do what is in their best interest.  As a shareholder you dont need to be loyal to the corporation (can hold shares with the competitor)

-Seperation of ownership and managment

-management- If you are just a shareholder you have no say in how the management goes

Creation via special act- A statute is created to make this corporation (U of M, Canada Post) Part of the provincial or federal Government.

Creation via general act- ( 3 types )

-Memorandum type

-Letters patent type

-Articles of Incorporation type

Varies dependant on where its located

-Articles of Incorporation (manditory)- The forms that create the corporation

-By-Laws (manditory)- General operating rules for the business of the corporation

-Unanimous shareholder agreement (optional)- A contract between all shareholders and the corporation.  Usually done with a small number of shareholders.  Makes it more like a partnership.

-More costly to set up than sole/partnership

-Takes longer to set up

-Duty of care, skill and diligence- if you are a director you are expected to be involved (go to meetings, ask questions when you dont know) and care.  If not you can be sued by the shareholders

-Duty to disclose an 'interest' in contracts with the corporation (fiduciary duty) cant have a conflict of interest.

-Duty to refrain from abuse of corporate opportunity- taking an opportunity for the director away from the corporation because they knew insider information.

-You must disclose the conflict

-Must not vote on the contract

-Should leave the room

-Failiure to disclose this gives the company the right to destroy the contract.

Insolvency is when you are unable to pay your dects when they become due. 

Bankruptcy is a legal status that a person or corporation is declared to be in

If the court declares you to be bankrupt you are insolvent

-Insolvent person makes a voluntary assignment in bankruptcy (Declared Bankruptcy)

-Creditors file a petition to obtain a recieving order (asking the court to declare the debtor a bankrupt)

-A formal (consumer) proposal does not recieve sufficient approval (A debtor can file for a formal proposal which would allow them to avoid bankruptcy by paying back monthly payments to creditors.  These payments will be for less than what is owed but sometimes this is accepted by creditors as it is more than they would recieve otherwise)

-Satisfies claims of creditors in an orerly and fair way

-Who to go to if you are going to go bankrupt (they can give advice)

-Provide forms and information

-They have the power to recover property that has been improperly disposed of (giving gifts or selling things for way lower than market value)

-Settlements- A gift of property made by the debtor before (within a year) they become bankrupt

-Fraudulent preferences- The payment of money or transfer of property to a creditor with a view of prefering that creditor over others.  If this is done within 3 months before bankruptcy, the money will be taken back and properly distributed, within a period of 12 months if the party is related.

-Reviewable Transactions- Goods must have been sold at fair market value.  Some contracts (non arms length) can be reviewed and they can order the goods back if improper.

first is secured creditors

second is preffered creditors

last is unsecured creditors

Preffered creditors get paid out after the secured creditors.  There is a list of preffered creditors that will be paid first.  Once there is not enough money left you take what is left and divide it by how much left is owed and thats why they get.

Some preffered creditors are:

- If the debtor dies, funeral and legal expenses are paid first

-The trustee and bankruptcy is paid second

-Up to 6 months arears of wages up to a max of $2000 per employee (if the employee is owed more, the remaining gets moved down to the unsecured level)

-Property taxes taht have been levyed within the last two years

Damages are awarded to put you back in the position you would have been in if the tort did not occur.  They are awarded to compensate the plaintiff not to punish.

General Damages- Pain and suffering (very hard to put an amount of money on this)

Special Damages- Quantifiable (like missed wages)

Intentional Torts (various types- assult / battery)

Unintentional Torts- Negligence

Duty, Breach and Damage

1) That in carrying on an activity the defendant owed the plaintiff a duty of care

2) That the defendant breached the duty of care by acting as they did

3) That the damage/injury resulted from the breach

A duty of care will only arise in the law where the defendant could reasonably have forseen a risk of harm to the plaintif or someone in the plaintiffs position.

-reasonably forseeable- would a reasonable person in those circumstances have forseen the victim

-Judges have to make value judgement if there is no case law exactly on that point

There is a general duty on someone who owes a duty of care to take reasonable care to prevent foreseeable injury to persons or their property.

-Reasonable care- care that a reasonable person skilled at that activity would take

Acts that caused proscribed (prohibited) harm.

there has to be:

-Intent- not to be confused with motive, The desire to bring about certain consequences.

-Causation- the action that brought about the result

-Proscribed/ prohibited harm (assault, battery, tresspass)

Assault- The threat of harm

Battery- The infliction of harm

Tresspass- Entrance upon premises unlawfully (signs and fences should be up stating no entrance)

Defamation- (Libel and slander) When a person makes a statement to third parties that causes unjustified harm to another persons reputation.

-If what you have said that runied the reputation is proven to be true you cannot be held liable.

-Some defenses for battery is if you are a doctor you give permission for the doctor to do surgery or if you are playing a rough sport like football or hockey

-If a professional (dominant party) gives advice to a client and it goes bad

-Duty of contract- Each party must promise to do something (advice for money) up to 6 years after can sue

-Duty of tort- If a professional owes a duty of care.  Up to 2 years after can sue

Can only sue for either Duty of contract OR Duty of tort, not for both.

-Fiduciary duty- The worst to be sued for.  Will ruin reputation. ex if someone goes to an accountant for advice on an investment opportunity and the accountant uses this information for themselves

1) Offer

2) Acceptance

3) Consideration

4) Intention to create legal relations

5) Capacity to a contract

6) Legality of contract

It is a tentitive promise made by one person (offeror) which is subject to a condition or request of the other party (offeree) -> Willingness to be bound

-An offer must be communicated before it can be accepted (fluffy dog reward)

1) if the offeror states its open for a defined period of time and that time passes

2)If no time line is set then if a reasonable period of time passes and no acceptance it expires

3)If either party dies or goes insane prior to acceptance the offer expires

-The offeror can revoke the offer anytime prior to acceptance even if the offeror said the offer would remain open longer

-You can enter an option contract where the offeree gives x dollars to ensure that the offer stays open for a period of time

-Or you get the offeror to promise in writing under seal that the offer will remain open for a certain period of time.

-Rejection

-Counter offer

-Request for additional information

-Acceptance

Bilateral- two way communication between both parties

Unilateral- only one needs to communicate the offer (reward for a lost dog.  You dont have to reply unless you find the lost dog)

Acceptance is complete when it reaches the offeror.  Face to face or on the phone is instantaneous acceptance.  Postal rule of acceptance- where mail is allowed for acceptance it is accepted when a properly addressed and stamped letter of acceptance is put in the mailbox.

The laws that govern the contract is where the contract is accepted ( where the offeror is)

What is the consideration element in contracts

-Gratuitous promise- A promise in face of nothing in return

-Past consideration- A situation where someone is promising to do something in return for something that is already done. (building the fence)

-Where there is already an existing legal duty

The adult has no choice of being able to get out of the contract.  The minor has the option of calling off the contract.

Persons with diminished capacity (mentally handicapped, drunk etc) same as minors

exceptions:

-When the contract is for neccesities like food or shelter.  But only bound to pay a reasonable price

-Employment contracts (movie star) (for minors only)

-For diminished capacity, the person must be able to prove that they incapable of rational thought and that the offeror knew this (unless it was for a neccesaty)

-Damages- calculated- how much money would be awarded to put the person in the place theyd be to start.  The party must try to mitigate the damages though (try to minimize the damages)

-Equitable remedies:

-Specific performance- A court order obliging a person to do something.  If the subject matter of the contract is unique (land is considered to be unique)

-Injunctions- An order to stop doing something.  Where the contract contains negative covenant.

-Recissions- The court is allowing the contract to be undone.