Course note of business law

COURSE OUTLINE FOR COURSE ACCT5150: BUSINESS AND COMPANY LAW (For 2014-2015)

COURSE OUTLINE

Course Title: ACCT5150 Business and Company Law
Description: This course seeks to provide an introduction to the institutions, doctrines and methodology of the law in the business and corporation context. The first part of the course will begin with an examination of the legal system of the Hong Kong SAR before proceeding to encompass a selection of topics in business law such as the law relating to contract, torts and employment.

The second part of this course will focus on aspects of company law such as the formation of companies, the effects of incorporation, the division of powers and obligations among the various organs of the company, its relationship with outsiders, financing and dividend issues, and options available to companies in financial difficulties.

Topics
Contents / fundamental concepts
The legal system of the Hong Kong SAR

Contract law

Torts law

Company law

Employment law
The Basic Law, legislation, common law, equity and the court system

Formation of contracts (offer, acceptance, intention to create legal relations, consideration and formality), contract terms and exemption clauses, vitiating factors (misrepresentation, undue influence, illegality and unconscionable contracts), discharge of contracts (performance, agreement and frustration) and the remedies for breach of contract (damages, rescission, injunction and specific performance)

Negligence

Business organizations and incorporation, the external regulatory bodies, the constitution of a company, the raising of capital and the maintenance of share capital, the management of a company, the dissolution of a company and solutions for companies having financial difficulties

Employees / independent contractors and the rights of employees

Learning outcomes:

Students can know the important rules of business law and company law at the end of the course. These rules concern how the courts deal with business-related disputes and issues relating to the running of companies in the real life. As many of the rules are designed to protect consumers and shareholders, students can in particular know more about consumers’ rights and shareholders’ rights. In addition, they can also learn more analytical skills and writing skills which can help them to apply the rules to do their assessments.

Learning activities:

There are to be 3.5 hours per lecture each teaching week. The medium of instruction is English. Students may ask questions relating to the course either in class or through email / Blackboard outside class. Sample questions and answers are provided in the course materials at the end of each topic for students’ learning purpose. The assessments are designed to help the students to learn more about the course. Feedback will be provided to students after they have done their assessments.

Assessment scheme:

Task nature
Description
Weight
Coursework 1

Coursework 2

Examination
Problem solving questions and / or essay questions

As above

As above
25%

25%

50%

Overall pass is required

Learning resources:

TEXTBOOK

D.K. Srivastava, ed., Business Law in Hong Kong (Hong Kong: Sweet & Maxwell Asia, 3rd ed., 2012)
Vanessa Stott, Hong Kong Company Law (Hong Kong: Pearson Education Asia, 13th. ed, 2011)

MAJOR REFERENCES

Anne Carver, Hong Kong Business Law (Hong Kong: Longman, 6th ed., 2004)
See also the acknowledgment list at the end of each topic of the course materials.

Relevant chapter of textbooks are stated at the end of each topic of the course materials for students’ learning purposes.

Relevant web information is provided in topic 1 of the course materials.

Feedback for evaluation:

Students are warmly welcome to send email messages to teachers if they have any comment or feedback on the course.

Course schedule:

Class / week
Date
Topic
Requirement
1

1 - 3

4 - 5

6

7

8 - 9

10 - 11

12 (last class)
See the dates of the relevant teaching weeks
The legal system of the Hong Kong SAR

Contract law: formation of contracts

Contract law: contract terms and exemption clauses, vitiating factors

Contract law: discharge of contracts and the remedies for breach of contracts

Employment law and torts law

Company Law: Business organizations and incorporation, the external regulatory bodies, the constitution of a company, the raising of capital and the maintenance of share capital

Company law: the management, dissolution of a company and solutions to companies having financial difficulties

Examination
Relevant readings are stated at the end of each topic of the course materials

Teachers’ and TA’s contact details:

Instructor

Name:
Anthony MW LAW
Office location:
Room 1034, Cheng Yu Tung Building
Telephone:
3943 7765
Email:
[e-mail]
Teaching venue:

Website:

Other information:

Teaching assistant

Name:
David Au
Office location:
Room 1049, Cheng Yu Tung Building
Telephone:
3943 7644
Email:
[e-mail]
Teaching venue:

Website:

Other information:

A facility for posting course announcement
Via email and Blackboard

Academic honesty and plagiarism
Please note that CUHK adopts a policy of zero tolerance to plagiarism. Kindly read the information at http://www.cuhk.edu.hk/policy/academichonesty/
You may also see my powerpoint notes on copyright and plagiarism posted in the Blackboard. They would also be sent to you via email

Topic One The Legal System of the Hong Kong SAR

[A] What do we mean by law?

- A body of rules for us to observe
- Related to government authority

[B] The Basic Law

Hong Kong has become a Special Administrative Region of the People’s Republic of China on 1 July 1997. The Basic Law becomes effective. According to its article 8, the legal system of Hong Kong before 1997 shall, basically, continue to apply. We study business law because it helps to regulate major commercial activities in our society.

What is the Basic Law?

A national law in China
Passed by the National People’s Congress (全國人民代表大會 - China’s legislature)
Regarded by the Hong Kong courts to be the constitution (憲法) of Hong Kong (see Ng Ka Ling v Director of Immigration, Tsui Kuen Nang v Director of Immigration and Director of Immigration v Cheung Lai Wah [1999] 1 HKC 291).

A constitutional document provides for the basic political and legal systems of the relevant country / region. The Basic Law provides for the basic political and legal systems of Hong Kong. It tells us what laws are to apply in Hong Kong. They include, under article 8 of the Basic Law,

a. Legislation
b. Common law, and,
c. Equity

How can I find the Basic Law?

a. Enter the Hong Kong government website (http://www.gov.hk)
b. Click the Department of Justice link
c. Click the Laws of Hong Kong icon on the left side
d. Click the Basic Law icon

[C] Legislation

What is a piece of legislation?

A law made by the legislature (it is called the Legislative Council in Hong Kong). The judges interpret legislations in Hong Kong. Examples of legislations that we are going to learn in this course include: -

Control of Exemption Clauses Ordinance (cap.71)
Supply of Services (Implied Terms) Ordinance (cap.457)
Misrepresentation Ordinance (cap.284)
Unconscionable Contracts Ordinance (cap.458)
Sale of Goods Ordinance (cap.26)
Occupiers’ Liability Ordinance (cap.314)
Employment Ordinance (cap.57)
Companies (Winding Up and Miscellaneous Provisions) Ordinance (cap.32)
Companies Ordinance (cap.622)

How can I find the legislations?

a. Enter the Hong Kong government website (http://www.gov.hk)
b. Click the Department of Justice link
c. Click the Laws of Hong Kong icon on the left side
d. Click the BLIS icon
e. Enter the chapter numbers or keywords that will lead you to the relevant legislation.

[D] Rules of Common Law and rules of equity

What are common law rules (普通法)?

The rules made by the judges in deciding cases.
The rules are made after many centuries of judicial development.
Once a common law rule has been made by a court, it is binding on all the courts below it. In addition, all the courts are bound by their own rules generally.

What are rules of equity (衡平法)?

Equity rules are also court rules like the common law.
However, equity rules are fairer and more flexible than the common law rules.

For instance, as you would learn in caps 3 and 6, the remedy (補救) under the common law for breach of contract is an award of damages (損害賠償) covering the loss due to the breach of contract (one example: if a buyer fails to pay for a flat as agreed, he has to compensate to the seller for the loss of profits).

Under the law of equity, the victim of the breach of contract may also have the remedy of rescission of contract (撤銷合約) (in the above example the seller can also end the contract. Another example: if a seller has breached a sale of land contract, the buyer can demand for refund) if he can satisfy some criteria based on fairness to be learnt in cap. 4.

How do we address the parties in court cases?

Plaintiff (原告), defendant (被告), appellant (上訴人) and respondent (答辯人).

How can I find the Hong Kong court cases?

a. Enter the Hong Kong government website (http://www.gov.hk)
b. Click the Judiciary link
c. Click the Judgment icon on the top
d. Click the Search icon on the top / left
e. Enter the parties’ names, etc., that will lead you to the relevant court case.

How can I find the English court cases?

a. Enter the website of CUHK’s University Library System
b. Click the ‘subject’ in the databases
c. Click the ‘law’ item
d. Click the Westlaw international (you can also find the HK cases in this website)
e. Enter the parties’ names, etc., that will lead you to the relevant court case.

[E] The courts and tribunals in Hong Kong

The judiciary consists of the courts and the tribunals (審裁處). The hierarchy of the local judiciary is as follows: -

a. The Court of Final Appeal (終審法院)
b. The Court of Appeal (上訴法庭)
c. The Court of First Instance (原訟法庭)
d. The District Court (區域法院)
e. The Magistrate Courts (裁判法院)
f. The tribunals (e.g. the Small Claims Tribunal (小額錢債審裁處) and the Labour Tribunal (勞資審裁處) which deal with specific and not so complicated legal issues

Students are encouraged to check with textbooks and references to understand the jurisdiction (審判權) of each court / tribunal and whether they can hear cases on appeal.
Readings

D.K. Srivastava, caps.1-2
Anne Carver, caps.1 – 5.

Acknowledgment

The writing of this topic is mainly based on the following materials: -

Chinese materials

Johannes Chan, ‘The Legal System’, in Albert Chen, et al, eds. General Principles of Hong Kong Law (Hong Kong: Joint Publishing (HK) Ltd., 2nd ed., 2009).

Benny Tai, ‘Constitutional Law’, in Albert Chen, et al, eds. General Principles of Hong Kong Law (Hong Kong: Joint Publishing (HK) Ltd., 2nd ed., 2009).

English Materials

Anne Carver, Hong Kong Business Law (Hong Kong: Longman, 5th ed., 2001)

Peter Wesley-smith, An Introduction to the Legal System of Hong Kong (Hong Kong: Oxford University Press, 2nd., 1993).

Peter Wesley-smith, Constitutional and Administrative Law in Hong Kong (Hong Kong: Longman, 2nd ed., 1994).

Derek Roebuck and Ian Dobinson, Introduction to Laws in the Hong Kong SAR (Hong Kong: Sweet & Maxwell, 1996).

References: Anne Carver, Hong Kong Business Law (Hong Kong: Longman, 6th ed., 2004) See also the acknowledgment list at the end of each topic of the course materials.