LAW 122 Lecture 1: LAW Ch 1 Intro to Law
28 Oct 2017
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Document Summary
Ch 1: intro to law & risk management. Risk management: the process of identifying, evaluating, and responding to the possibility of harmful events. Nearly every business decision creates some risk. Can we be held liable for doing something wrong: evaluation. What are the chances of something going wrong: response. Avoidance: not engage in risky business activity, not sell certain product or service, i. e. cars with exploding fuel tanks. Reduction: reduce occurrence of risk by modifying business practices, ex. Shifting: shift risk to another party through contract or through insurance policy, ex. purchase insurance for car accident. Acceptance: sometimes appropriate for business to accept risk, lucrative contract. Exclusion and limitation clauses: contractual terms that exclude liability for certain types of acts/ losses, or that limit the amount of compensation available. Incorporation: limited liability: directors and shareholders are not usually liable for debts of the company. Solving a legal question: start with the facts.
