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Civil and Corporate Law – Basic Contracts


Contract Law as Basis for the Claim


Civil Law and Corporate Law involve contracts between people or entities. An entity may be a Government corporation, private corporation, partnership, and of course an individual. One of the differences between an individual and an “entity” is that there may be limitations when pursuing an entity. An individual, if they are responsible for damages, would have to pay with everything that they have an interest in (other than some exceptions allowed by law, such as Registered Retirement Savings Plans). An individual may be forced into bankruptcy to pay the entire claim.


A corporation, which is the other extreme, is often called a “limited corporation.” Thus, the name of a company might be “Smith Limited” or “Smith Incorporated.” It may be that the operator/owner of this company is actually Mr. Smith or Ms. Smith. However, if the contract or relationship is with the entity (the corporation), the limit of the claim against the corporation is limited to the assets and items owned or registered to the corporation. It would not be everything that is registered or owned by the individual(s) that owns the company. There may be some exceptions to this, and this requires a good legal understanding as to when those exceptions may be available, allowing the claim to also be against the individual.


Preparation and Interpretation of a Contract


If the claim is based in contract, then the review of the rights and obligations start by looking at the contract. A contract defines the relationship, although there are limitations to what can be put into a contract. For example, an employer cannot contract out of their obligations pursuant to the Labour Relations Act. If money is loaned, the interest that may be paid cannot exceed what is described as the “criminal interest rate” in the Criminal Code. Thus, a contract should be read with a “legal awareness” as to whether the provisions as described in the contract apply in law or not. If they do not apply in law, then the contract interpretation is different than what it reads, and the law prevails.


In the preparation of contracts, it is helpful to have legal advice and representation to make sure that the contract is drafted and signed in the appropriate manner. There can be questions as to whether the contract is valid because of “consideration.” Consideration means that there is an exchange of items of value. However, a contract can still be legally enforceable, even though there is no consideration if the contract is signed “under seal.” Under seal means that it is an enforceable contract, but a seal of the parties signing the contract needs to be part of their signature. A lawyer knows how to create a seal for any person signing a contract. Some documents require a witness (a Will or a Separation Agreement are examples). Thus, legal advice and review of a contract prior to signing is best.


Claims of Negligence


Negligence is where a person or entity owes a duty to another. For example, someone driving an automobile has a duty not to hurt or injure other people or property. If their driving causes injury or damages, then the claim may be pursued in “negligence.” Negligence does not require a pre-existing contract, but instead what is looked for is a duty.


Sometimes these duties come from legal obligations, such as a landowner and the application of  Occupiers Liability Act. If someone comes onto a property, and is injured because of the negligence of how the property was being maintained (for example, an open hole that someone could fall in, or snow not properly shovelled) then a claim may be brought for negligence. There are many damages that flow, in that there are heads of damages (“topics” of damages). These are complexities that would require a legal understanding to appreciate the various claims that may be available.


Resolving Contract and Negligence Disputes


Contract or negligence disputes can often be resolved quickly and efficiently. What is needed is to understand the potential legal outcome as if the matter proceeded to court. By looking at what might be the result in court, a reasonable range of resolution can be determined. This is identifying the objective of the claim.


Often the objective of the claim can be obtained through negotiation, or sometimes with the assistance of a mediator. The value of using the approaches other than court, called “alternative dispute” processes, should be appreciated and considered. A lawyer, and/or a mediator, and sometimes even a private arbitrator can allow for resolution of conflicts more efficiently, faster, and less expensively. DeRusha Law Firm, is familiar with all of these options and can also provide mediation or arbitration, as the lawyers are available as mediators or arbitrators.

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