Mattingly "AI & Prompt Design: The Basics of Prompt Design"
Business Law 1
1. Joint Venturing, Contracting
& Business Law BMCP 905
Mar 30, April 1, 2, 2006
Calgary
Chris Hylton
chris@hylton.ca
Tel 403 264-5288
1
2. Friday Part I: Where does law come from
Part II: Contracts
Part III: Joint Ventures
Saturday
Part III: Joint Ventures - continued
Part IV: Employment Law
Part V: Courts and Civil Procedures
Part VI: Sole Proprietorships, Corporations,
Partnerships
Sunday Part VII: The Tort of Negligence
am Part VIII: Privacy Law
Part VIII: The Charter & Human Rights
Legislation in Canada
pm Exam
2
3. Your agenda – what do you want?
________________________
________________________
________________________
________________________
________________________
3
4. Evaluation
Final exam 100%
Sunday 1 pm
Exam is open book. You may bring in your textbook, class
notes, and lecture notes.
4
5. A little about me:
First of all, call me Chris
BA & MA from Queens and Laval University
Worked for the feds, consulting firms
Has own firm since 1991
Specialize in employee benefits and Human resources
consulting
Certified Trainer with NAIT
Sports: skiing, swimming, squash
Have worked with aboriginal groups for 5 years
5
6. Why study Joint Ventures
and Law?
(beside this being a required course
for most of you)
8. What is Law?
Law as Rules
Law as Morals
Characteristics of “good” law:
– Generality
– Lack of retroactivity
– Clarity
– Non-contradictory
– Constancy and consistency between official actions
and existing law
8
9. The Role of Law
The law fulfils several functions in
society, including:
Protect persons and property
Provide government with powers to act in the
interest of the public; and
Provide a framework that gives us broader
freedom of choice
9
10. The Law in Perspective
Law provides rules of conduct that are
enforceable by government, individuals,
and companies
Law binds everyone: you can’t opt out of the
legal system
The law protects people and their property
The law allows government to act on behalf
of society
From a commercial perspective, the law
provides a framework for economic freedom
10
11. The Law and Economic Freedom
Framework for freedom of choice
– Businesses rely on law to enforce the
business arrangement
– Law provides predictability and reliability
– Regulating commerce is a balancing act
– Under-regulated jurisdictions create
uncertainty
– Others believe that excessive regulation
leads to restriction on economic freedom
11
12. Business and the Law
Law is pervasive in the business environment.
- Employment contracts
- Liability of Directors and Officers
- Slip and fall of customers on business property
- Leasing of buildings and equipment
- Misrepresentation by sales people
- Transferring shares and shareholder rights
- Contracts between suppliers, distributors and
customers
12
13. Case: Dudley & Stephens
3 men and a boy are shipwrecked
Men are all married with young families
Food & water ran out, several days passed
2 of the men killed the boy, and all three fed until
they were rescued
The 2 men charged with murder
What would you argue?
… if you were the prosecutor
… if you were the accused?
13
14. The Civil & Common Law Systems
The legal systems of the Western world can be
divided into two groups: countries with a
civil law system and countries with a
common law system.
The civil law system originated in continental
Europe, and has its roots in Roman law, and the
common law system operated in feudal England.
Other parts of the world inherited these systems
of law during the process of colonization.
14
16. I Where Does Law Come from? P 3
Four Sources of law:
Statutes
Subordinate legislation
Law made by Judges – Case law
– Common law
16
17. Legislation or Statutes pg 3
Legislation is a general term referring to statutes (or
statute law), regulations, by-laws
Statute laws are created by Parliament or legislature (also
called “Acts”)
– introduced as “bill”
– majority support through series of “readings”
– Potential for public consultation
– Additional step of Senate for federal legislation
– finalized by “royal assent”
subordinate legislation: regulations, bylaws
– created under Parliament’s or legislature’s authority
– example of municipality: province creates municipality,
province gives municipality power to pass by-laws
17
18. Subordinate Law pg 3
Statute creates administrative body
Administrative body may create procedural
rules
Administrative body makes decisions,
sometimes even giving reasons
Examples: Workers Compensation tribunals,
Labour Relations boards, Employment Stds
Regulations, OH&S
18
19. Case Laws - The Doctrine of
Precedent pg 4
One of the most important differences
between the civil and common law systems is
the emphasis that is placed on precedent.
In the common law system, judges have an
obligation to treat similar or like cases alike.
This practice is referred to as the doctrine of
precedent, or stare decisis
In civil law systems, however, little emphasis
is placed on precedent
19
20. The Constitution
The Constitution is the highest source of
law in Canada.
– Any law inconsistent with Constitution: no
force or effect, see also s. 52 “supremacy
clause”
EXCEPT: see Limitations on Charter
rights, discussed below.
20
21. Division of Powers pg 5
Canada is a federal country with 2 constitutionally
entrenched levels of government:
federal government
– represents entire country
– Parliament, or House of Commons (elected)
– Senate (appointed)
provincial (territorial) government
– Legislature represents province (or territory)
21
22. Division of Powers pg 5
The Constitution creates division of
powers between the levels of government
– topics divided into federal or provincial authority
• federal: crime, bankruptcy, copyright, etc (s. 91)
• provincial: property, civil rights, etc (s. 92)
– federal government holds residual power
• topics not otherwise allocated (eg
telecommunication)
ultra vires legislation
– created outside scope of government’s authority
• no force or effect (s. 52)
22
23. Constitution Act 1867
s. 91 – Federal Powers s. 92 – Provincial Powers
Interprovincial/ Hospitals
international trade & Property and civil rights
commerce Administration of justice
Postal service Local matters (e.g.
Aboriginal affairs highways)
Currency Incorporation of
National defense provincial companies
Criminal law
Residual powers
Navigation & shipping
23
25. Contract Law
A contract is a voluntary exchange of
promises, creating obligations which, if
defaulted on, can be enforced and remedied
by the courts.
Primary concern of the courts is to enforce the
reasonable expectations of the parties
Courts reluctant to interfere, not concerned
about fairness of the deal
25
26. Ingredients of a Contract pg 31
To be enforceable in court an agreement
must meet the following qualifications.
1. Consensus 4. Legality
2. Consideration 5. Intention
3. Capacity 6. In writing
(sometimes)
26
27. Consensus p 32
A meeting of the minds of contracting parties
– share an understanding of the bargain struck
– be willing to commit themselves to terms
– terms must be unambiguous
– failure to read a contract is no excuse
Comprised of Offer and Acceptance
27
28. Offer p 32
Offer must contain:
– terms of the contract
– a communication of willingness
to be bound
– terms of offer must be clear
– terms can be implied
28
29. Invitation to Treat p 32
An invitation to the general public to engage
in the bargaining process
– advertisements or sales promotions are not
binding offers
– articles displayed for sale are not
offers but merely invitations for
customers to offer to pay
the price of the item
29
30. Communication of an Offer
An offer must be communicated
Disclaimers of responsibility must be posted
in plain sight or printed on back of tickets
Only the person or group to whom offer is
made can accept it
30
31. End of an Offer
Offer ends at a specified time or
after a reasonable time if not specified
At the death or insanity of offeror
When it is revoked before acceptance and the
revocation is communicated to offeree
When offer is rejected or counteroffer is put
forward
31
32. Acceptance p 33
Must be unconditional
– must not specify any new terms
– court will interpret any ambiguities in the offer
to give effect to the intentions of the parties
– will not overcome the defect of an incomplete
or defective offer
32
33. Communication of Acceptance 33
Usually by communication to the offeror
– effective at time acceptance is communicated
Sometimes by conduct
By performance of the act stipulated in offer
Silence is not acceptance unless part of on-
going business relationship
Note negative-option schemes, cable cos
33
34. Post Box Rule pg 33
When acceptance is mailed, it is effective
when and where it is posted
Rule applies only when response by mail is
appropriate
New methods of communication
makes the expansion of the post
box rule unnecessary
34
35. Consideration p 34
Each party must give consideration
Does not have to be fair
Must be legal
Not gratuitous
Past consideration is no consideration
35
38. Restrictive Covenant p 35, 36
Non compete clause against sellor of business
– Must be reasonable in time and geography
Employment contract
– Same issues for new hires
38
39. Some contracts not enforceable by the
courts unless in writing p 36
Land deals
– Sale, easements, and right of ways
Leases for more than 3 years
Contract that cannot be performed in one year
Guarantee’s against another’s debt
Marriage promises
Promise of executor to pay debts of estate
39
43. Case Study – Leander and Jason
Leander (L) owns greenhouses
Jason (J) is a retail florist
J contracts with L for 3000 plants @ $10
Delivery to take place between Dec.10-20
On Dec. 9, L informs J that she will not
deliver the plants
What are J’s options?
43
52. Commitment Options
Type of relationship Example Scale of Commitment
no relationship No commitment
One-off deal delivery of one
service
Alliance buying consortia /
national brand
Partnership various partnerships / franchises
JV timber or O&G
operation
Merger / Acquisition High commitment
52
53. Motivation for developing a
joint venture pg 3
•Business expansion
•New products
•New markets
•Need for more resources
•Technical expertise
•Greater distribution channels
53
54. The following areas need to be considered
when forming a joint venture:
Capital
Branding
Expertise
Resources
Cultural
Legal
National/local government support
54
55. Types of JV’s pg 4
Start small
New company
Legal advice needed (Vancouver FN and
casino)
55
57. Important Factors
Success in a joint venture depends on the choice
of JV partner. Successful choice depends on:
The partners sharing similar objectives
The partners’ commitment to making the JV
work
A reward from the relationship, and
An equal share in the risks and rewards
57
58. If there is a fit with your organization and
prospective partner:
Financial
Joint development of business plan
Legally, and from a
Governance / regulatory perspective
If you have researched potential partner track
record in:
Maintaining relationships
Resources to commit to the venture, and
History of long-term commitment
…then the building blocks for an alliance are in
place 58
59. Benefits
There must be real benefits for both partners. If the
partnership is
successfully established, it will provide:
Shared financial commitment
Shared risk
Growth
Mutual learning & professional development
Increased research capacity
Widening markets / programs / opportunities
59
60. Question for Discussion
Your leadership wants you to come up with
three possible partners for a JV in your
community
With a partner, come up with three possible
JV partners and explain your choices
60
61. HUMAN RESOURCE
STRATEGY pg 5, 6, 7
The HRM functions of a JV are more
complex because managers (and
sometimes workers) come from two or
more firms or from two or more cultures
61
62. HR ISSUES
HR planning, skills needed
Parent involvement
Staffing the alliance management and
technical personnel
Staffing the alliance workforce
Assigning managers strategic or operations
tasks
62
63. HR issues, continued
Performance assessment
Loyalty
Career development
Cultural differences, need to create hybrid
culture, overcoming cross cultural issues
Training
Compensation plan tied to success of JV
63
64. What can go wrong? Pg 9
Most common reasons for JV failure:
Cultural Differences – 49%
Poor or unclear leadership – 49%
Poor integration process – 46%
64
65. Why? Pg 9
Objectives are not clear
Community buy in not there
Imbalance in levels of expertise, investments
or assets of partners
Different cultures and management style
results in poor integration and co-operation
65
66. Assess your readiness for JV pg 11
SWOT analysis
Gap analysis
Look at existing successful
businesses
Direction of growth
Method of growth
66
67. Choosing the right JV Partner pg 12
Existing customers and suppliers
Other success stories from other
communities
67
68. SELECTING A PARTNER:
THE MOST IMPORTANT
CHOICE?
Seek
– strategic complementarity
– skill complementarity
– compatible management styles
68
69. ISSUES TO CONSIDER IN
CHOOSING A PARTNER
The level of mutual dependency
The "anchor" partner
The "elephant and the ant" complex
Operating policy differences
Difficulties of cross-cultural communication
69
70. Plan your JV relationship pg 14
What do you want out of relationship?
Access to larger resources
70
71. Decide Link in
Value Chain
Select a
Begin Over Potential
Partner
No Acceptable?
Yes
Build Trust
Choose an Negotiate an Build the
and
Alliance Type Agreement Organization
Commitment
Assess
Performance
Terminate
Meets Continue or
or
Revise
No Strategic Yes Increase
Objectives? Involvement
Implementation
71
72. Creating a JV, pg 15
Written agreement
Shopping list
trust
72
73. NEGOTIATING THE
AGREEMENT
Joint venture contracts: legal documents that
bind partners together
The formal agreement is not as important as
the ability of managers to get along
73
74. ISSUES IN ALLIANCE
AGREEMENTS
under which law does the agreement operate
how will profits be divided
do you need a prenuptial agreement
what are the equity contributions of each
partner?
74
76. DOMINANT PARENT
One parent controls strategic and
operational decision making
– dominant parent often has majority
ownership
– dominant parent treats the JV as wholly
owned subsidiary
76
77. SHARED MANAGEMENT
Both parents contribute approximately the
same number of managers to the board of
directors, the top management team, and
functional area management
77
80. ROTATING MANAGEMENT
Key positions rotate among partners
– popular in developing countries
• trains management talent and transfers expertise
80
81. CHOOSING AN ALLIANCE
MANAGEMENT STRUCTURE
If one parent has dominant equity position
– dominant management structure more likely
81
82. Choosing an alliance
management structure,
continued
Equal ownership
– shared, split, or rotating management
structure preferred
Similar technologies or know-how
– shared management structure preferred
82
83. COMMITMENT AND
TRUST
Without trust and commitment the alliance
will fail entirely or never reach its potential
83
84. COMMITMENT
Taking care of each other and putting forth
extra effort to make the venture work
– attitudinal commitment
– calculative commitment
84
85. WHY ARE TRUST AND
COMMITMENT IMPORTANT?
Required for JV participants to contribute
knowledge and quality inputs
Weakness of formal contracts
– can never identify all the issues
85
86. KEY FACTORS TO BUILD &
SUSTAIN TRUST &
COMMITMENT
Pick your partner carefully
Know each side’s strategic goals
Seek win-win situations
Go slowly
86
87. Key factors to build and sustain trust
and commitment, continued
Invest in cross-cultural training
Invest in direct communication
Find the “right” levels of communication
87
88. TRUST & COMMITMENT
High
Commitment Vulnerabilities
Trust
Benefits
&
Trade Off
Point
Low
Low Vulnerabilities & High
Benefits
88
89. Making it work. Pg 16, 17
Look for quick success first
Communications
Share info openly
Look for win wins
89
90. Critical Success Factors
Assuming that financial, legal, and regulatory
elements are stable, the two critical factors
are:
Communication
Shared goals and vision
90
91. Communication and
shared vision
High levels of internal commitment
communicated clearly and consistently,
including:
Involvement of senior management
Involvement of departments and staff
Creation and propagation of protocols
and responsibilities
91
92. Ending a JV pg 17, 18
Not designed to last forever
Contract wording
Buy out
92
93. IF THE ALLIANCE DOES
NOT WORK
Negotiate an end or improve
implementation
Know when to quit/invest more
Avoid “escalation of commitment”
“prenuptial agreements” assist with
termination of agreement
Death not always failure
Was not designed to last for ever
anyway 5 – 10 years 93
94. One example pg 18, 19, 20
Discuss and comment on what you would do
differently
94
95. Joint Ventures – Conflicting
Values
“Developing businesses for our community will
create jobs and bring wealth to our people”
Economic Development Director
“The real issue is the protection of our
traditions and values, not jobs”
Museum Director
1. Do you agree or disagree with each of the
statements above?
2. Discuss with colleagues and come to a
conclusion
95
96.
97. Building on economic
opportunities Forestry
(e.g., BC Economic
Mining Renewal, Sask
Forestry Accord)
(e.g., Diavik)
Oil & Gas Tourism
(e.g., Athabasca Oil (e.g., the North)
Sands/Fort McKay)
Fisheries
Agriculture
(e.g., Blood and
Peigan irrigation)
Hydro Commercial/
(e.g., Gull Gas
Rapids) Industrial Parks (e.g., Sable Island)
(e.g., Chippewas of 97
Sarnia, Kamloops)
98. INAC’s Key Investments in
Economic Development
• Capacity Development
• Regional Economic Opportunities
• Business/Market Development
• Innovative Access to Capital
98
99. Regional Economic Opportunities
Regional Partnerships Fund Assists First Nation and Inuit
communities to participate in the planning and
implementation of large-scale resource development
projects involving the private sector, federal and
provincial/territorial governments and other
stakeholders
Resource Access Negotiation Program Helps individual First
Nation and Inuit communities negotiate bilateral benefit
agreements with governments or the private sector
relating to resource development
Resource Partnerships Program Assists First Nation and
Inuit communities to participate in the planning and
implementation of large scale resource development
projects involving the private sector, federal and
provincial/territorial governments and other
stakeholders 99
100. Business / Market Development
Opportunity Fund/Resource Acquisition
Initiative
• Helps First Nation and Inuit Community Economic
Development Officers (CEDOs) attract joint venture
partners or secure conventional debt financing, and
helps communities to obtain natural resource permits
and licences
Major Business Projects Program
• Provides financial assistance for start-up and
expansion of major First Nation and Inuit businesses
100
101. Innovative Access to Capital
Aboriginal Contract Guarantee
• Assists Aboriginal businesses overcome lack
of access to bid and performance bonds
Note – some of these programs may have been
discontinued or replaced, check with your
local office.
101
102. Federal Support for Ab Forestry
Natural Resources Canada (NRCan)
– First Nation Forestry Program (joint with INAC)
– Sustainable Communities Initiative
– Model Forest Program
Indian and Northern Affairs Canada (INAC)
– Resource Access Negotiations Program
– Resource Partnerships Program
– Resource Acquisition Initiative
– Regional Partnership Fund
Human Resources Development Canada (HRDC)
– Aboriginal Human Resources Development Strategy
– Youth Employment Strategy
Aboriginal Business Canada (ABC)
– ABC business program 102
103. NR Canada Initiatives
First Nation Forestry Program
– To improve economic conditions in status Indian
communities with full consideration of the principles
of sustainable forest management
– Capacity building and economic development projects
– A partnership program between INAC, NRCan, and
First Nations
– 1148 projects; $83 million invested ( 96/97 – 01/02)
– Over 65,000 person weeks of work
– 4,800 First Nations with forestry job experience
– 106 forest management plans
– 90 feasibility studies and 114 business plans
– http://fnfp.gc.ca
103
105. Clayoquot Sound: A Mythic
Battle
Conflict began in mid 1980’s
Key stakeholders
– Coalition of environmental groups
– MacMillan Bloedel Forest Company
– First Nations leaders (Nuu-Chah-Nulth)
Government in passive role though
responsible for Crown Lands
No one “in charge”
105
106. What happened?
Conflict (1985-1995)
– protests, blockades and market campaign
Exploration (1994-1998)
– community-based dialogue and learning
– development of new model of forestry
Collaboration (1999- ?)
– MOU re joint venture forest company
– collaboration on the Central and North Coast
106
107. Barriers to Building Social Capital
hostility/years of conflict
gender/ethnicity/life experience differences
lack of common vision/goal
no language for sustainable forestry
107
108. Lessons Learned
Relationships evolved between individuals
and organizations
Relationships fostered greater
interdependence and trust
Solutions emerged that weren’t anticipated
Relationship-building competence a key
108
109. Strategies
Start small Keep the door open
Manage Embrace diversity
expectations Focus on shared
Seek quick visions
successes and build Earn trust
on them
Make linkages
109
112. History
•1969 Choctaw Development Enterprise
(construction co)
•1969 American Greeting Visit
•1971 1st Industrial Park
•1975 - 1977 Chief Martin wrote 500 letters
•1977 Packard Electric
•1981 American Greetings
•1985 Choctaw Electronics Enterprise
112
113. History
•1986 Choctaw Manufacturing Enterprise
•1989 Choctaw Shopping Center Enterprise
•1991 First American Printing & Direct Mail
•1995 First American Plastic Molding Enterprise
113
114. Industrial Development Results
•Diversified Economy into 5 counties
•Customers: McDonald’s, Ford, Chrysler, Xerox, AT&T,
Navistar, Boeing, Peavey, Caterpillar, etc.
•Industries: Automotive Assembly, Commercial Printing,
Plastic Molding, Retail, Service, Construction, Medical,
etc.
•Business Types: Wholly-owned Tribal Enterprise, Joint
Ventures, Leasehold Interest
•Overall: A positive reputation within business and
political realms
114
115. Tourism & Gaming
•1988 Indian Gaming Regulatory Act passed by Congress
•1993 Signed the Tribal/State Compact
•1994 Opened the Silver Star Hotel & Casino
•1997 Dancing Rabbit Golf Club -- The Azaleas
•1999 Dancing Rabbit #2 -- The Oaks
•2000 Pearl River Resort Master Plan
•2002 Golden Moon Hotel & Casino
•2002 Geyser Falls Water Park
•2003 Hard Rock Beach Club and Clearwater Key
115
116. Economic Impact Study 2001
Impact from Recurring Operations
Jobs Created 14,817
Payroll Created $356.8 million
MS Tax Revenues $18.7 million
Construction Impacts
Current Expenditures $485.9 million
Jobs Created 8,686
Payroll Created $236.7 million
Mississippi Tax Revenues $19.7 million
116
117. Emerging Trends
•400 Tribal Members in College
•50% of the Tribe’s population is <21 years old
•Emerging Middle Class
117
118. What the Tribe is
Seeking
1. Add new customers to existing companies
•Electronic assembly, printing, plastic molding, etc.
•Exclusive Manufacturing Arrangements
2. Leasehold Tenants
•Manufacturing Facilities
•Choctaw Town Center
•Pearl River Resort
3. Joint Ventures with Existing Companies
4. Creation of New Tribal Enterprises or Joint Ventures
118
119. What the Tribe is
Not Seeking
•Vertical Integration Opportunities
•Angel Investment Opportunities
•Purchase of Existing Companies/Facilities outside
“normal” boundaries
•Tax-Oriented Projects
•Environmentally-Sensitive Projects
•Grant-Dependent Projects
Source: “MISSISSIPPI BAND OF CHOCTAW INDIANS
Economic Overview” BREI ANNUAL CONFERENCE Proceedings, HALIFAX, NOVA
SCOTIA, MAY 20, 2004
119
120. Most Alliances Fail
Researchers Year Failure Rate
McKinsey & Company 1993 33%
The Darden School
1996 60%
(Prof. Robert Spekman)
KPMG 1996 70%
PricewaterhouseCoopers 1998 50%
Anderson Consulting 1999 61%
The Lared Company 2000 60%
120
121. 30 – 70% of alliances do not succeed for a number of reasons
Unclear strategies Changing factors (internal and external)
Strategy failure Different partner goals
Uncertainty
Dysfunctional governance
Valuation difficulty
Culture clashes
Difficulty in unwinding
Loss of proprietary assets
Asymmetric dependence
Lack of relationship focus Distrust
Source: Jill Foote, CFA, Ph.D.
Jones Graduate School of Management, Rice University
121
122. Our offer to you
Please call if you have any HR, or workplace
issue that you are overwhelmed with
We can help you
We also are pleased to do Free Workshops for
your organization (some limits apply) Let us
know what your needs are and we will make it
happen!
122
123. CG Hylton - Services
HR Consulting Benefits, Pensions,
Job Descriptions EAP
Salary Grids Strategic Planning
Wellness at Work Drug and Alcohol
programs
Staff Morale
Dept re-orgs
Training and
Workshops Leadership
compensation
Tel 403 264 5288
chris@hylton.ca
123