IBUS3306 Legal Complexity Mid Sem Exam Questions & Answers
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Course
IBUS3306 Legal Complexity
Institution
IBUS3306 Legal Complexity
What countries employ Civil Law? - ANSWERSSouth America, Central America, West Indies, Asia, Europe
What countries employ Common Law? - ANSWERSNorth America, Oceania
Three steps of analysis - ANSWERSThe Firm needs to measure:
1. The relevant legal rules applicable to its deal/project/investm...
IBUS3306 Legal Complexity Mid Sem
Exam Questions & Answers
What countries employ Civil Law? - ANSWERSSouth America, Central America, West
Indies, Asia, Europe
What countries employ Common Law? - ANSWERSNorth America, Oceania
Three steps of analysis - ANSWERSThe Firm needs to measure:
1. The relevant legal rules applicable to its deal/project/investment;
2. The impact of those rules in practice; and
3. Compliance or enforcement by the relevant jurisdiction.
What is measured in doing business? - ANSWERSOpening a business, location,
finances, dealing with day to day operations, operating in a secure business
environment.
Identify the areas of legal complexity, timing and risks that need to be managed in
Country B to implement that strategic investment decision. - ANSWERS1. business
incorporation;
2. getting a building permit;
3. obtaining an electricity connection;
4. transferring property;
5. getting access to credit;
6. protecting minority investors (in Country A and/or Country B);
7. paying taxes (in Country B and at a Group level in Country A);
8. engaging in international trade from Country B in the region;
9. enforcing the Firm's contracts (in Country A, Country B and in other countries where
B2B relationships exist);
10. resolving insolvency across jurisdictions where assets exist.
What is the business legal strategy? - ANSWERSCorporate Governance - sets limits
and manages risk profile - what risks are acceptable and necessary compliance
Legal & Commercial Risks - Always identify, mitigate and manage
Risks visited on the Firm can result in Liabilities. Liabilities can exposure Firm to capital
loss, revenue loss and/or liquidation
Use awareness of international legal sources to identify legal rules that can avoid or
mitigate legal and commercial risk to the balance sheet, corporate reputation and
enhance the culture of the Firm
Consistent good choices identifying, mitigating and managing risk can maintain the
Firm's value and gain the Firm advantages:
- Lower risked revenue streams from deals and investments;
- Lower insurance premiums for the Firm;
,- Reduce Operating expenses;
- Lower Capital expenses;
- .... And not get sued!
Organisational Environment - ANSWERSLegal is a part of an organisation's General
Environment.
It must be considered when managing and should be part of the organisation's planning
in terms of risk management.
If the legal environment is not known / investigated / taken into consideration in all
activities of the Firm there can be major negative consequences to the organisation
putting its viability at risk.
IBUS3306 and Business Strategy - ANSWERSLegal environment is a fundamental part
of an organisation's External Environment.
It needs to be constantly analysed to identify at all stages of a transaction/investment/
what Threat / Opportunity exits to the Firm and to enable the Firm to Mitigate / Capture
the perceived Risk / Reward. This analysis should be evaluated by the organisation in
its Internal environment as a Strength or Weakness.
It is a part of the Risk Planning process in implementing the Firms overall Business
strategy and informs management when and how to adapt Business strategy,
governance in an ever changing legal environment - often in more than 1 legal
jurisdiction.
Organisational Culture
What must be included to form a contract? - ANSWERS1) an offer,
2) acceptance,
3) intention to create a legally binding agreement, and
4) consideration - a price paid (not necessarily money),
5) a legal capacity to enter a contract of your own free will,
6) and proper understanding and consent of what is involved giving certainty and
completeness, and
(7) Duration and termination of Offer.
What is negligence? - ANSWERSIs a failure to exercise the care that a reasonably
prudent person would exercise in such circumstances. Involves harm caused by
carelessness, not intentional harm.
What three elements must be proved to be found negligent? - ANSWERS1. Duty of
care - (two stage test- reasonable foreseeability and proximity)
2. Breach of Duty
3. Reasonable person test (special skills)
,What defences are present on a negligence claim? - ANSWERSsomeone who has to
defend a negligence claim can argue that the plaintiff contributed to their own injury
(contributory negligence) or that they were duly aware of all the risks involved in their
actions. Remedy is damages.
What types of breaches of contracts are there? - ANSWERSPartial, fundamental
What is a 'partial' breach? - ANSWERSa "minor" breach (a partial breach or immaterial
breach or where there has been substantial performance), the non-breaching party can
only sue for actual damages.
What is a 'fundamental' breach? - ANSWERSa breach so fundamental that it permits
the aggrieved party to terminate performance of the contract. In addition that party is
entitled to sue for damages.
Sale of Goods Act (Qld) 1896 - ANSWERSIncludes:
Formation of Contract
Capacity
Existing or future goods
Perished goods not known at time of contract - void
Fixed price or reasonable price if not price not determined
Conditions & warranties implied
Implies terms as to when title (property) in goods passes from one party to another
unless agreed otherwise in contract. 5 Rules Sec 21 to ascertain intention if contract
silent.
- Implies term that risk (of loss/damage) in goods passes when title passes.
These are just some of the common legal concepts the Firm must consider in its risk
planning. Such as: - ANSWERSThe law can therefore be:
➢ a hindrance (e.g. a firm cannot put a product onto the market until it is "proven" safe -
e.g. issues for drug companies)
Or
➢ a help (e.g. a firm use a remedy such as an injunction to stop another from acting in a
way that will cause it harm - e.g. stop a someone using the Firms intellectual Property
Rights.)
Types of law: - ANSWERSCommon law - e.g. Negligence and Contract law - created by
Courts through case law.
Statute law - e.g. Criminal Code / Corporations Law - created by Statute i.e. Acts of
Parliament.
What type of court system does Australia have? - ANSWERSMagistrates, District &
Supreme Courts of QLD, NSW, Aust Federal Courts, Australian High Court;
What type of court system does the UK have? - ANSWERSEnglish High Courts of
Justice, Bow Street County Court London etc. Scotland, Wales & NI have
, their own courts too. You can appeal within the Court systems.
What type of court system does the USA have? - ANSWERSUS Federal Courts, State
& County Courts (e.g. Harris County Court Houston Texas);
Private International Law = Conflict of Laws - ANSWERSDetermines 'governing' or
'applicable' law of a contract ► formation + performance
Determines where litigation takes place (jurisdiction) ►► forum
Determines how a judgment is enforced in other counties ► recognition + enforcement
Most 'Conflict of Law' regimes allow the Parties in their contracts to decide the 'Choice
of Law'(Governing or Applicable Law) and the 'Choice of court' (Forum or Jurisdiction) to
regulate and enforce their rights, obligations and allocation of liabilities. But the process
to follow can be costly and complicated for the Firm.
When can a Party's choice of law (governing or applicable) and choice of forum
(jurisdiction) not be always absolute? - ANSWERSCountry's National laws may override
the contractual choices of the parties by mandatory rules (National laws) that apply or
refuse to apply a chosen or foreign law or recognise the forum (Court or jurisdiction) or
a foreign court judgment as it might be considered to be is ousting the jurisdiction of the
local courts or for other public policy grounds (Ordre Public).
How can a Firm can strengthen its contractual rights governing its revenue and
investment? - ANSWERSBy planning in advance of signing a contract where and how it
will enforce its rights against a counter party
►Payment + IP Rights
How can disputes be mitigated in regards to conflict of law? - ANSWERSA Firm should
always provide in its contracts an effective 'Choice of Law' (governing or applicable) and
'Choice of Court' (jurisdiction) or an arbitration agreement specifying a 'Choice of Law'
and the Arbitration Rules and place of arbitration to resolve any disputes with
contractual counterparties.
2015 Hague Principles on Choice of Law in International Commercial Contracts (Hague
Principles) - ANSWERSIt is important to know if the Party can rely on the chosen law of
that country to prevent that outcome by having adopted and passed local law applying
the 2015 Hague Principles on Choice of Law in International Commercial Contracts
(Hague Principles) - which per se are not legally binding on local courts but designed to
encourage local laws to follow. If adopted and domestically enacted in the Country
whose laws are chosen to govern or apply to a contract the Hague Principles would not
include the Conflict of Laws as part of the chosen law of that Country.
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