SOLUTIONS MANUAL
Contemporary Canadian Business Law 12th Edition by John Willes
CHAPTER 1. THE LAW AND THE LEGAL SYSTEM
Chapter Topics
Learning the Law
The Legal Environment of Business
The Nature of Law
Rights versus Privileges
The Role of Law
The Early Development of Law
The Rise of the Courts and the Common Law
The Sources and Components of Modern Canadian Law
The Constitutional Foundations of Canadian Law
The Canadian Charter of Rights and Freedoms
Classification of Laws
Summary
Key Terms
Review Questions
Mini-Case Problems
Case Problems for Discussion
Chapter Objectives
The rights and obligations of businesses and business persons stem from the
law and our legal system. After study of this chapter, students should be able to:
• Describe the sources, role and development of Canadian law.
• Distinguish between statute and Common Law, and describe the
significance of stare decisis.
• Recognize matters of federal versus provincial jurisdiction.
• Describe the fundamental rights and freedoms set out in the
Charter of Rights and Freedoms.
CHAPTER COMMENTARY
Chapter 1 is introductory in nature, and provides a general background concerning the nature of law, how laws
developed, the general need for some rules to govern the behaviour of individuals, and the establishment of the
various fundamental rights and duties of persons in society.
In class discussion, special emphasis should be placed upon both the sources of law and the
classification of laws in order that students may have a clear idea of what they are and where they may be
found. Many students fail to realize that the Common Law represents a large body of law, and the scope and
application of this source of law should be emphasized in class discussion of the chapter. The text description
of the development of the law and the rise of the courts is intended to be read as a historical introduction to give
students an appreciation of where our laws came from, and how they were developed. In the context of the
,courts and the law, the doctrine of stare decisis should be noted, and its purpose and application discussed with
emphasis on the need for "predictability" in the application of the law to cases that come before the courts. It
would be worthwhile to note as well that some judges of the Supreme Court of Canada have expressed the
view that they, as judges of the highest court in the land, do not consider themselves bound by the doctrine, but
would only change a common law rule where it had become inappropriate in a modern social setting.
Chapter 1 also provides a general outline of the nature of a constitution and its function in a democratic
society. Reference is made to the "constitution" of the United Kingdom and the constitution of the United
States as a basis for discussion of, and comparison with, the Canadian Constitution. The role of the courts as
the chief interpreter of the constitution is also noted and should be emphasized in any class discussion of the
enforcement of rights under the Charter. On this point, the doctrine of judicial review should be explained to
illustrate how the rights of both governments and individuals set out in the constitution may be enforced. As an
approach to teaching this part of the chapter, a systematic examination of the fundamental rights and freedoms
may be made with the class requested to provide a fact situation related to a freedom or right, and then have
the class speculate as to how the Charter might be interpreted by the court as it relates to the matter. With each
fundamental right or freedom it is important to emphasize that the freedom or right must be viewed in the light
of s.1 which makes the right "subject only to such reasonable limits prescribed by law as can be demonstrably
justified in a free and democratic society," and not absolute. The "notwithstanding" clause (s. 33) which permits
legislatures or parliament to override the Charter rights should be noted as well. On this point, reference may
be made to the Court Decision in the Chapter (Ford v. Quebec (Attorney General), 1988 CanLII 19 (SCC))
which held Quebec's Bill 101 unconstitutional with respect to public signs. Students should note that the
province of Quebec used s. 33 to override this decision of the Supreme Court of Canada and passed Bill 178 to
require "French only" signs on all Quebec businesses. Students should also examine RJR-MacDonald Inc. and
Imperial Tobacco Ltd. v. Canada, 1995 CanLII 64 (SCC) in the Chapter for an additional example of the views
of the Supreme Court on the Government of Canada's attempts to virtually ban advertising on tobacco products.
The organization of the Charter itself provides an orderly approach to discussion of the nature of the
rights and freedoms granted under it, as well as the method of enforcement. With respect to the latter, it is
readily apparent that most of the rights and freedoms are those which the framers of the constitution felt should
be enshrined to protect them from encroachment or interference by governments. If government should do so,
the individual has the right to bring the alleged infringement before the courts to have the interference ruled
upon as to its validity.
A final point to note and to emphasize in class is that the constitution includes more than the Charter
of Rights and Freedoms. It also includes the original British North America Act of 1867 (as amended over the
years) which establishes the structure of our government, and the legislative powers and jurisdiction of the
provincial governments and Parliament. Consequently, it is a lengthy and complex document which sets out
not only the rights and freedoms of the individual, but how Canada as a democratic society governs itself. On
this point it should be emphasized that legislative bodies may not exceed the powers granted to them under the
constitution, as the exercise of jurisdiction when none exists renders such an act ultra vires and a nullity.
Aboriginal and indigenous law concepts are introduced, and statute law is defined in the text, and the process
associated with this type of law-making is described very briefly. Students should be informed that this process
is legislative as distinct from judicial. The recording and organization of these statutes in the form of revised
statutes of a province (or federal government) should also be discussed in order that students are made aware
of where these laws may be found. Discussion may then lead into the topic of civil codes, and students may
be asked to discuss the pros and cons of a Civil Code system vs. the Common Law/Equity system
, From the point of view of learning about the law, the chapter contains a description of the various
sources of the law, and the methods of classification. The importance of this part of the chapter should be
underscored, as it provides the basis for an understanding of the particular rules and principles covered in the
remainder of the text. It also represents an important first step in the examination of the law, in that it sets out
the system for classification.
It is essential that the difference between substantive law and procedural law be understood. As well,
students should learn the various sub-classes of substantive law. In this regard, the nature of public law as a
type of substantive law should be clearly understood. Public laws are laws which relate to the relationship
between the individual and the government (or its agencies), and as such, are usually laws which are enforced
by the Crown. They are generally prohibitive or regulatory in nature (e.g.: the criminal law, or provincial liquor
control laws), and are enforced by the Crown if they are violated by an individual. They are quite different
from private laws which normally establish the rights and duties of individuals in their dealings with each other,
and which must be enforced by the party whose rights have been violated.
The chapter outlines the sources of law, and provides a general explanation of the common law
(including equity) as a source. The nature of this body of law should also be carefully examined, as the law
described in a large part of the text is of this type. In particular, the Law of Tort in Chapters 4 - 6, the Law of
Contract in Chapters 7 - 14, the Law of Agency in Chapter 15, the Law of Bailment in Chapter 20, and a number
of other areas of the law are essentially part of the "Common Law".
Chapter 1 also introduces the first of many legal terms and definitions which must not only be
memorized, but understood. The various definitions of the term "law" along with definitions of "rights" and
"privileges", "Common Law", "equity", the doctrine of stare decisis, "statute", and "civil code" are explained,
and the material concerning these terms should be carefully reviewed, as the terms are frequently used
throughout the balance of the text. The various terms used to describe the different classifications of the law
should also be noted.
The Review Questions at the end of the chapter should provide a sufficient test of student knowledge
of the essential material and are reproduced with comments.
, Review Questions
1. What impact does the Canadian Charter of Rights and Freedoms have on rights and freedoms not
mentioned specifically in the Charter? Could these "other rights and freedoms" be curtailed or
extinguished by governments?
Answer: The Charter recognizes the existence of other rights and permits them to continue except where
they conflict with Charter rights and freedoms. Rights outside the Charter do not have Charter
protection, and may be abolished or encroached upon by governments.
2. What is the difference between a "right" and a "privilege"?
Answer: A right is an act that may be done with impunity and with the support and recognition of the
state. The state recognizes a right as something which neither it nor others may deny. A privilege is
something which the state allows or permits under specific circumstances at the pleasure of the state.
3. Why are "rights" and "duties" often considered together when one thinks of laws?
Answer: Because "rights" often permit a person to do something that interferes with others, laws
generally include obligations or duties on the person possessing a right to exercise the right in a
particular way to minimize interference with others. Laws may also include duties on those affected by
the exercise of a right to permit the right to be exercised.
4. Could a society exist without laws? If not, why not?
Answer: A complex society certainly could not exist without laws, as some means of regulating the
activities of people would be necessary to maintain order. Even in a primitive society, rules regulating
fairness in vengeance matters were necessary.
5. "Advanced civilizations are generally characterized by having a great many laws or statutes to control the
activities of the citizenry." Comment on the validity of this statement.
Answer: This is a valid observation. Advanced civilizations are characterized by persons engaged in
activities which involve a great deal of social contact and interaction. Historically, they have also
involved many people living in close proximity to each other (in cities). Each type of social interaction
usually requires some legislative control, hence, the more interaction, the more laws that are required.
6. On what basis are Charter fundamental rights and freedoms open to restriction by Parliament or the
provincial legislatures?
