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Remember to hand notice about your registered sole proprietorship if you decide to dissolve.
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=== Sole Proprietorship Proportionality
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SPs are really easy to set up, thus they tend to be small but numerous. Their numbers also fluctuate proportional to the economic situation - in boom times small businesses flourish better, while in recession they are usually the first to shut down, as they are easy to start and drop at any time.
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=== _Salomon v. Salomon_
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The separate existence of corporations as a legal entity distinct from their shareholders was first recognized in _Salomon v. Salomon_ in 1897. Even as a one-man company, the company and its members have been separate, and have been ever since (save for circumstances to recognize shareholder interests).
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=== The Sackler Family and Purdue Pharma
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A case study of the potential harm corporations can do to society. Purdue Pharma was founded by 3 brothers in the Sackler family, whose prescription painkiller, OxyContin, debuting in 1995, helped raise 35 billion in profits. It also happens to be a very powerful opioid. What happened after was a lot of overdoses and an entire opioid crisis. Yay!
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No clinical studies were done on its addictive nature at launch, and later when internal reports found it to be so they covered it up. Doctors were bribed to promote it, and "pill mill" doctors were targeted. Their "delayed absorption mechanism" was easy to circumvent giving way too high a dosage at once.
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Also, they patented that "delayed absorption mechanism", but when the 20-year deadline came, they simply made a minor tweak to the recipe and filed for another patent! Technically ok but like, uncool man.
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All Canadian provinces and the federal government sued for 170 million in total, about 0.5% of their total profits. The Sacklers also bankrupted the company, taking all the profits through dividends and leaving none for investors and employees.
When a Contract Breach occurs, the Courts will first try to throw money at you; and if that isn't enough, they will use equitable remedy. Also, this is separate from the notion of damages in Tort Law?
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=== Damages
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As the _sole_ Common Law remedy, damages is an award of money compensating the injured party for the loss caused by the other party's breach of contract - thus it is compensatory, rather than punitive, in nature. The purpose of damages is to place the injured party in the position they would have been in *had the contract been performed*.
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==== Cost of Performance VS Economic Loss
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What number is used for damages? The plaintiff and defendant could argue that the figure should be based on "cost of performance" - remedial costs required to restore the plaintiff to the required position. The other could argue that the figure should be based on "economic loss" - simply the difference in market value that was caused by the breach. These two estimates can give vastly different figures, especially in _Peevyhouse v. Garland Coal Mining Co._
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In _Peevyhouse_ specifically, the courts ruled that they will usually give remedial costs, unless it is "unreasonably/unwarrantly expensive", in which the difference in economic profit is given.
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In addition, there is a relatively new case precedent - it aims to ensure higher sums of damages actually get put into restoration work rather than being used for vacation trips to Florida. So, the higher sum of money for restoration work may be awarded if one of the following happens:
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#block(inset:(left: 1em))[
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1. The Remedial Work was actually performed
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2. There is sufficient intention to perform the remedial work, if you were to be compensated
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3. You *undertake* in court (pinky promise or go to jail) to do the remedial work
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]
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==== Mitigation and Betterment
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In addition for the losses to have "flowed from" the breach, damages are only awarded if you show _reasonable_*mitigation* - there was action by the aggravated party to reduce the extent of its loss caused by the breach from the other party. The injured party cannot sit around and do nothing - you must actively take steps and show *reasonable effort to reduce your losses*, or else you will get nothing! (For instance, reselling goods at the best possible price, finding alternative suppliers, or searching for alternative employment in the case of wrongful dismissal)
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On a different note, *betterment* caps the amount of damages the plaintiff can receive, stating that the plaintiff *should not be put in a better position* than they were before the breach of contract. For example, depreciation must be considered when assets are damaged or destroyed as part of a breach - they should award damages equal to the fresh sale price minus X years of depreciation expense.
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==== Measures of Damages
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In most cases, the injured parties are entitled to expectation damages, consequential losses, and general damages. I guess the other damages (reliance, liquidated, nominal, punitive) are more specific or something.
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===== Expectation Damages
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*Expectation Damages* are amounts awarded based on the *expected profits* or benefits of the contract *at the time of formation* VS their current actual position. This is the usual remedy for a breach of contract. Expectation damages can also be based on *lost opportunity cost* - you lost your chance to make a similar contract with a different promisor and so should be entitled to your profits.
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===== Consequential Loss
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*Consequential Losses* are secondary losses incurred by the non-breaching party that were *reasonably foreseeable* at contract formation that flowed from the breach. For instance, if the injured party had to shut down business operations, or were unable to fulfill other contractual obligations due to this breach.
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===== General Damages
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Similar to Tort Law, these are damages awarded for non-quantifiable or intangible damages, such as in lost reputation. The courts will decide what award is fair to compensate for these types of damages.
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===== Reliance Damages
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As an alternative to Expectation Damages, *Reliance Damages* are costs of expenditures and wasted effort reasonably made in preparation for performance, essentially returning the party to a pre-contract position. Examples include preparatory research or material for a specific client who breaches that cannot be reused anywhere else.
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===== Liquidated Damages
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*Liquidated Damages* are amounts agreed on to be paid in damages by a party to a contract if it commits a breach. These are pre-estimated damages that are put in as the breach may not be worth going to court for. These are enforceable if they are accepted and are a *genuine pre-estimation* of the other party's damages.
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In contrast, *penalty clauses* are terms specifying an exorbitant amount for breach of contract, aimed to frighten parties into performance. These are not genuine estimations of damages and thus are _not enforceable_ in Court. They are quite effective in scaring the party into performance though.
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===== Nominal Damages
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Sometimes, the damages suffered by one party are negligible. However, the Courts still wish to acknowledge the "moral victory" by the plaintiff, so they will give a token sum - dollars or even pennies. They still have to pay the litigation fees though.
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===== Punitive Damages
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Damages aren't supposed to be punishing, but in exceptional circumstances, plaintiffs have been awarded for malicious or bad faith behaviour from the breaching party. So, yeah.
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==== Problems in Measuring Damages
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It can be hard to measure damages for certain things, such as Mental Anguish, Wrongful Dismissal, and Lost Enjoyment - damages could be awarded if it was reasonably foreseeable at formation. There is also the Cost of Performance v. Economic Loss Evaluation difference causing issues from earlier too.
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=== Equitable Remedies
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In some cases, pure monetary damages are not sufficient. This is where the Courts of Equity step in, providing Court orders other than money settlements, for instance being able to order a party to perform the contract!
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==== Requirements for an Equitable Remedy
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#block(inset:(left:1em))[
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1. Not really a prerequisite, but the Courts are *discretionary* - the court decides if an equitable remedy is required as damages will not fully compensate the loss.
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2. The plaintiff must come to court with *clean hands* - they cannot be partially responsible for the damages, or have acted unethically in some way.
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3. The plaintiff must take action in a reasonable amount of time - the defendant cannot be misled into thinking no court action will happen against them.
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4. No innocent third party can be affected by the equitable intervention.
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5. The plaintiff's consideration must also be commensurate with the defendant's promise. (The price of the promise must be fair)
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]
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==== Specific Performance
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*Specific Performance* is an order requiring a defendant to do a specific act, usually to complete a transaction or finish their contract. You have to show that *the damage award won't help you* - that for some reason the specific action to take is incomparable monetarily. Apparently, it is almost never granted in employment or personal service contracts - personal skill does not lend itself to an order of specific performance, and the Courts don't want to "supervise" the defendant to make sure they do it.
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==== Injunctions
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*Injunctions* are a court order restraining a party from acting in a particular - specifically prohibiting them from committing a contract breach or similar. For this to be an available option, the contract must have a *negative covenant* - a promise not to do something, expressly written or implied logically. This also avoids the "need to supervise" as mentioned in Specific Performance.
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===== Tests for if you need an Injunction
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#block(inset:(left: 1em))[
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1. There exists a *serious issue*
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2. That will cause *irreparable harm*
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3. And the *Balance of Convenience* favours the Moving Party (it is probably better and more convenient to just put the injunction in)
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]
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===== Types of Injunctions
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====== General Injunctions
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This is your default category of injunction. An instant classic!
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====== Interm / Interlocutory Injunctions
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*Interm Injunctions* are temporary injunctions preventing immediate harm from being done, before the full trial of the issue at a later court date.
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To be able to get this, you must undertake (pinky promise or jail) that if you don't win the case you will receive damages. You also need to show irreparable harm will be caused without an injunction, and you have to argue your case 100% neutrally as the other party you're injuncting against isn't present when you present your case to the judge.
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====== Mareva Injunctions
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*Mareva Injunctions*, or freezing orders, prevent a defendant from moving any assets they own or control (regardless of where they are and whose name they are under). This is to safeguard a plaintiff's "clear and apparent" legal claims and stop the defendant from loopholing their way out of skimping on the damages they need to pay.
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====== Anton Piller Orders
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These court orders provide the right to search premises and seize evidence without prior warning. They are essentially search warrants, but from the Court! The original Anton Piller Order was used to search the premises of an agent stealing trade secrets from Anton Piller, seize the confidential information, and gather evidence of the stealing.
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===== Quantum Meruit
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*Quantum Meruit* is the amount a person deserves/merits to be paid for goods and services provided to the person requesting them. This claim can arise when "a valuable benefit is conferred at the request of a promisee." It can also be claimed when the non-breaching party has partially performed when the other party breaches the contract. Essentially, it's payment for performance already done when the contract is terminated that has not been compensated for?
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This seems to be an exception to the general rule that expectation damages are to apply, and occurs when there is a wrongful termination of the contract, supposedly.
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=== Enforcing Judgments
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Judgments are any court order requiring one side to pay the other damages, or perform as part of an equitable remedy. Here, the plaintiff will become the *Judgment Creditor* and the defendant the *Judgment Debtor*. The JD owes money to the JC.
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If the JD doesn't willingly comply, the Courts can choose the seize the assets of the JD. The judgment must first be registered with the court, and a writ filed with the Sheriff's office. Then the *execution order* can be made to the Sheriff, who gains authority to *levy execution* and seize and sell assets. (Save for some assets like pensions and annuities).
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After the Sheriff acquires assets from the JD, they first take a % for Sheriff's fees, then pay out all secured creditors. After that, the remaining sum is distributed pro rata (proportionally) amongst all the execution creditors.
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==== Garnishment Orders
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This order to collect forces the JD's employer to retain a portion of JD's wages to give to the JC instead. It can also be collected from your bank account or Accounts Receivable. They are also filed with the Sheriff's office, and the sheriff gets paid before the funds get distributed to execution creditors.
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