Law

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“Law is a system of rules and guidelines which are enforced through social institutions to govern behavior”

~ Wikipedia on law

“In law particular case interpretations are deduced from the general law.”

~ Teacher on application of laws

How to read law?

• Luku n == chapter n
  • Pykälä ( § ) n == section n
    • Momentti( 1,2,3.. ) == moment ( 1,2,3.. )

Where to find the law

• Legislation of Republic of Finland and more online in Finnish / suomeksi
• Translations of finnish laws and regulations at finlex.fi
• Library of The Parliament of Finland is situated in the "Postitalo" right at the core of Helsinki (map). In addition to having all laws and all regulations legislated by the parliament, they offer wide variety of weekly and monthly magazines from all over the world.

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Business Law

Teacher: Janne Jokinen

Type of course: Mandatory course in GloBBA in Law

Course code: Unknown

Part of Developing Entrepreneurial Competencies (BUS1LF001)

Course material: Access to Finnish Law by Aapo Surakka, ISBN 978-951-0-33696-0. Published by SanomaPro. Note: Also available as an e-book.

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Commercial law, also known as business law is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales.

It is often considered to be a branch of civil law (common law) ( w:fi:Yksityisoikeus ) and deals with issues of both

private law ( w:fi:Yksityisoikeus myös ) and

public law ( w:fi:Julkisoikeus ). ( Wikipedia )

Obs. w:Civil law (common law) != w:Civil law (legal system)

Yritysjuridiikka ( Commercial law practice ) on kauppatieteellinen tieteenala, jonka tarkoituksena on tutkia fi:liiketoimintaa ja sen päätöksentekoa oikeudellisesta näkökulmasta.( Suomenkielinen Wikipedia )

Outline of commercial law article contains among other things

• Branches of commercial law
• commercial laws by region
• History of commercial law
• Types of business entities
• Contracts
• Intellectual property
• Dispute resolution
• not to forget General commercial law concepts

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Business Law - Lesson 1 - Introduction

• Choose w:arbitration ( w:fi:Välimiesmenettely ) as preferred method of w:dispute resolution especially if dealing with businesses outside of EU

• In Finland ( Civil law ) you can be made to pay the legal fees of the winning party. In USA ( common law ) you don't have to.

• In w:USA a company may have to pay w:punitive damages ( Rangaistusluonteinen vahingonkorvaus ) whereas in Finland you have to pay only w:compensation ( w:fi:korvaus ) i.e. w:Damages ( w:fi:Vahingonkorvaukset )

• w:Legal personality ( w:fi:oikeushenkilö )
• w:Capacity (law) w:fi:oikeuskelpoisuus ( eri kuin w:fi:Oikeustoimikelpoisuus )
• A w:tort ( w:fi:Vahingonkorvausoikeus ), in w:common law jurisdictions, is a w:civil wrong which unfairly causes someone else to suffer loss or harm resulting in w:legal liability for the person who commits the tortious act, called a tortfeasor. Although w:crimes may be torts, the cause of legal action is not necessarily a crime as the harm may be due to w:negligence which does not amount to w:criminal negligence.

Levels of negligence

• Minor negligence ( lievä tuottamus, vähäinen huolimattomuus, vähäinen varomattomuus, vähäinen tuottamus )
• w:Negligence ( huolimattomuus, varomattomuus, tuottamus) ( The area of tort law known as negligence involves harm caused by carelessness, not intentional harm. ( Wikipedia )
• w:Gross negligence is a legal concept which means serious carelessness. ( törkeä huolimattomuus, törkeä varomattomuus, törkeä tuottamus )( Wikipedia )
• Willful intention ( tahallinen, harkittu )

w:Corporate law (also called "company" or "corporations" law) is the study of how w:shareholders, directors, w:employees, w:creditors, and other stakeholders such as w:consumers, the w:community and the environment interact with one another.

Corporate law is a part of a broader w:companies law (or law of business associations). ( Wikipedia )

Relevant corporate laws in Finland are

• w:fi:Osakeyhtiölaki for LTD's and additionally
• w:fi:Suomen arvopaperimarkkinalaki for PLC's.

Business Law - Lesson 2 - Compensation law, product liability

• Compensation law

• In law, Damages ( w:fi:vahingonkorvaus ) are an award, typically of money, to be paid to a person as compensation for loss or injury;. ( Wikipedia )

• w:Product liability ( w:fi:Tuotevastuu ) is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. ( Wikipedia )

• Consumer complaint ( w:fi:Reklamaatio )

• Contracts ( w:fi:Sopimus ) ( See course Business Negotiations and Contracts for keys )

• Both verbal and written are w:legally binding
• breach of contract ( sopimusrikko, sopimusrikkomus ) can land you and your business in court.

• Liability ( sitoumus, vastuu ) ( Obs. w:Liability (financial accounting) and w:Legal liability are two distinct things. )

• Limitation of liabilities or full liability

• w:Force majeure ( w:fi:Force majeure ) is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, or an event described by the legal term act of God (such as hurricane, flooding, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract. ( Wikipedia )

• w:Legal burden of proof ( w:fi:Todistustaakka oikeustieteessä ) and reverse legal burden of proof when there is a contract

• w:Non-disclosure agreement ( NDA ) ( w:fi:Salassapitosopimus ) ( Maximum 1 yr for workers and 2 yrs for businesses ) ( Teacher )

• w:Non-compete clause ( NCC ) ( w:fi:Kilpailukieltosopimus )

Making a contract:

1. ) Preparatory stage
2. ) Contract period
3. ) End of contract

• w:Standard form contract ( w:fi:Vakiosopimus ) aka. boilerplate contract

w:Boilerplate (text) is any text that is or can be reused in new contexts or applications without being changed much from the original. ( Wikipedia )

Protecting w:intellectual property( w:fi:Immateriaalioikeus ) :

1. ) A patent (/ˈpætənt/ or /ˈpeɪtənt/) ( w:fi:Patentti ) is a form of intellectual property. It consists of a set of w:exclusive rights granted by a w:sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention.
2. ) An w:Utility model ( small patent )( w:fi:Hyödyllisyysmalli )
3. ) A w:trademark ( w:fi:Tavaramerkki ) is a recognizable sign, design or expression which identifies products or services of a particular source from those of others. ( Wikipedia )

Business Law - Lesson 3 - Contract law

Topics: Contract law ( w:fi:Sopimusoikeus ) deals with w:contracts

• A w:waiver ( toimenpiteestä luopuminen ) is the voluntary relinquishment or surrender of some known right or privilege. ( Wikipedia )

• w:Good faith ( w:fi:Bona fide ) - In w:law, bona fides denotes the mental and moral states of honesty and conviction regarding either the truth or the falsity of a proposition, or of a body of opinion; likewise regarding either the rectitude or the depravity of a line of conduct. ( Wikipedia )

• w:Labour law (also called labor law or employment law) ( w:fi:työoikeus ) is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, w:working people and their organizations. ( Wikipedia )

• In contract law, w:rescission ( w:fi:purkaminen ) has been defined as the unmaking of a contract between parties.

Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the w:status quo ante). ( Wikipedia )

• w:Collective bargaining ( kollektiivinen neuvottelu ) is a process of negotiations between employers and a group of employees aimed at reaching agreements that regulate working conditions. ( Wikipedia )

Business Law - Lesson 4 - Consumer law, companies law

Topics: Contract law continues, marketing and Consumer Law ( redirects to w:Consumer protection ), Companies law

• w:Consumer protection ( w:fi:Kuluttajansuojalaki ) it consists of laws and organizations designed to ensure the rights of consumers as well as fair trade competition and the free flow of truthful information in the marketplace. ( Wikipedia )

• w:Articles of association ( w:fi:yhtiöjärjestys ) is a document which, along with the memorandum of association (in cases where the memorandum exists) form the company's constitution, defining the responsibilities of the directors, the kind of business to be undertaken, and the means by which the shareholders exert control over the board of directors. ( Wikipedia )

• Redemption clause ( w:fi:Lunastuslauseke ) can be used to fend off w:hostile takeovers.

• A w:shareholders' agreement (sometimes referred to in the U.S. as a stockholders' agreement) is an agreement amongst the w:shareholders of a w:company. ( Wikipedia )

• w:Preferred stock (also called preferred shares,preference shares or simply preferreds) ( w:fi:etuoikeutettu osake ) is an equity security with properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. ( Wikipedia )

• w:Convertible bond or a convertible note ( w:fi:vaihtovelkakirja ) (a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into shares of w:common stock in the issuing company or cash of equal value, at an agreed-upon price. ( Definition )

Business Law - Lesson 5 - Wrap up

Topics: w:Company law continues, wrap-up

Business Law - Exam

Final examination

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International Law

Private international law concerns relations across different legal jurisdictions between persons, and sometimes also companies, corporations and other legal entities ( Wikipedia on private international law according to Conflict of laws )

Public international law ( w:fi:Kansainvälinen oikeus ) concerns the structure and conduct of sovereign states; analogous entities, such as the Holy See; and intergovernmental organizations. To a lesser degree, international law also may affect multinational corporations and individuals, an impact increasingly evolving beyond domestic legal interpretation and enforcement. ( Wikipedia )

w:International law is the set of rules generally regarded and accepted as binding in relations between states and between nations. It serves as a framework for the practice of stable and organized international relations. International law differs from state-based legal systems in that it is primarily applicable to countries rather than to private citizens. ( Wikipedia )

• Sources of international law
• Different legal systems ( w:fi:Oikeusjärjestys ) ( List of national legal systems )
• Basic w:legal principles and legislative framework of the European Union
• Conflicts of laws and jurisdiction ( tuomiovalta tai toimivalta )
• Dispute resolution ( kiistanratkaisu )
• International contracts ( w:fi:Sopimus ) and trade
• International competition law ( w:fi:Kilpailuoikeus ) principles

International Law - Lesson 1 - Introduction

• Prefer Arbitration ( w:fi:välimiesmenettely ) over going to court.

• Schools of thought defining the basis of international law: cosmopolitans, legal positivists ( w:fi:oikeuspositivismi ) and hobbesians.

• In law, comity specifically refers to legal reciprocity—the principle that one jurisdiction will extend certain courtesies to other nations (or other jurisdictions within the same nation), particularly by recognizing the validity and effect of their executive, legislative, and judicial acts. ( Wikipedia )

• A w:supranational union is a type of multi-national organization where negotiated power is delegated to an authority by governments of member states. ( Wikipedia )

International Law - Lesson 2 - Non-business entities

• NGOs ( w:fi:kansalaisjärjestö )
• IGOs

• European Parliament ( w:fi:Euroopan parlamentti )
• European Court of Justice

• w:Civil law (legal system) ( w:fi:säädösoikeus ) and common law ( w:fi:tapaoikeus tai "maan laki" ) are competing legal systems

Obs. In Finland ( Civil law ) you can be made to pay the legal fees of the winning party. In USA ( common law ) you don't have to.

• Dispute settlement is a resolution between disputing parties about a legal case, reached either before or after court action begins. ( Wikipedia )

International Law - Lesson 3 - Intellectual property

• Intellectual property (IP) ( w:fi:Immateriaalioikeus ) is a legal concept which refers to creations of the mind for which exclusive rights are recognized.

Under intellectual property law, owners are granted certain exclusive rights to a variety of intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs.

Common types of intellectual property rights include copyright, trademarks, patents, industrial design rights, trade dress, and in some jurisdictions trade secrets. ( Wikipedia )

• IP's two principle branches:
  • artistic property
  • industrial property

• Copyright ( w:fi:Tekijänoikeus ) is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time, with the intention of enabling the creator of intellectual wealth (e.g. the photographer of a photograph or the author of a book) to get compensated for their work and be able to financially support themselves. ( Wikipedia )

• A patent ( w:fi:Patentti ) is a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention. An invention is a solution to a specific technological problem, and may be a product or a process. ( Wikipedia )

• Copyright does not protect the idea. A patent does. ( Teacher )

• Most countries grand three basic kinds of patents:
  • Design patents
  • Plant patents
  • Utility patents

also petty patent aka utility model ( w:fi:Hyödyllisyysmalli ) exists.

• A trademark ( w:fi:Tavaramerkki ) is a recognizable sign, design or expression which identifies products or services of a particular source from those of others. ( Wikipedia )

International Law - Lesson 4 - When business goes wrong

• Bankruptcy ( w:fi:konkurssi ) is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor. ( Wikipedia )

• Foreclosure is a specific legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. ( Suomessa käytännössä ilmeisesti w:fi:pakkohuutokauppa ? )

• A mortgage ( w:fi:kiinnitys ) is a security interest in real property held by a lender as a security for a debt, usually a loan of money. A mortgage in itself is not a debt, it is the lender's security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower. ( Wikipedia )

• Security interest w:fi:vakuus is a property interest created by agreement or by operation of law over assets to secure the performance of an obligation, usually the payment of a debt ( Wikipedia )

Equitable charge confers a right on the secured party to look to (or appropriate) a particular asset in the event of the debtor's default, which is enforceable by either power of sale or appointment of a receiver. ( Wikipedia ) It is a form of security interest. [ ... ] Where security equivalent to a charge is given by a natural person (as opposed to a corporate entity) it is usually expressed to be a bill of sale, and is regulated under applicable bills of sale legislation.

• Fringe benefit is a type of employee benefit ( w:fi:luontoisetu )

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International Law - Lesson 5 - Risks

• Risk ( w:fi:riski ) can come in the form of

• • economic risk ( macro ),
  • financial risk ( talousriski )
  • legal risk when doing w:international business. ( Teacher )

Additional reading regarding risks

• w:Financial risk is an umbrella term for multiple types of w:risk associated with financing, including w:financial transactions that include company loans in risk of default. Risk is a term often used to imply downside risk, meaning the uncertainty of a return and the potential for financial loss.

In addition to financial risks, there are five broad categories of investment risks known as five risks. ( Wikipedia )

• The w:Five risks are the five types of w:financial risk faced by long-term investors as opposed to those faced by short-term traders ( Wikipedia )

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Business Negotiations and Contracts

Business Negotiations and Contracts - Lesson 1 - About forming contracts

In common law ( w:fi:tapaoikeus ) legal systems, a contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them.

The elements of a contract are "offer" and "acceptance" by "competent persons" having legal capacity who exchange consideration to create "mutuality of obligation." ( Wikipedia )

Offer and acceptance are elements required for the formation of a legally binding contract: the expression of an offer to contract on certain terms by one person (the offeror) to another person (the offeree), and an indication by the offeree of its acceptance of those terms. The other elements traditionally required for a legally binding contract are (i) consideration and (ii) an intention to create legal relations. ( Wikipedia )

Consideration is the concept of legal value in connection with contracts. It is anything of value promised to another when making a contract. It can take the form of money, physical objects, services, promised actions, abstinence from a future action, and much more. ( Wikipedia )

• A counter offer is regarded by law to be a rejection of the original offer.
• Express contract vs. Implied-in-fact contract or implicit contract

• A third party beneficiary ( w:fi:Kolmas osapuoli ), in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been an active party to the contract. ( Wikipedia )

• An unenforceable contract or transaction is one that is valid, but which the court will not enforce. ( Wikipedia )

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Business Negotiations and Contracts - Lesson 2 - A proper offer

A proper offer is:

1. Valid
2. Detailed
3. Specifically adressed

Sale of Goods legislation and United Nations Convention on Contracts for the International Sale of Goods affect sales of goods

UNIDROIT is the International Institute for the Unification of Private Law

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Business Negotiations and Contracts - Lesson 3 - Breach of contract

Breach of contract ( w:fi:sopimusrikkomus tai sopimusrikko ) is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance. ( Wikipedia )

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Business Negotiations and Contracts - Lesson 4 - Delivery terms

• The Incoterms rules or International Commercial Terms ( w:fi:Incoterm ) are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) that are widely used in International commercial transactions or procurement processes. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods. ( Wikipedia )

• Risk of loss is a term used in the law of contracts to determine which party should bear the burden of risk for damage occurring to goods after the sale has been completed, but before delivery has occurred. ( Wikipedia )

What triggers transfer of ownership and risk of loss?

1. Applicable law
2. Contract
3. Breach of contract ( breaching party is liable )
4. Delivery by common carrier other then seller ( loss of risk is transferred to buyer when delivery is completed as agreed in the contract ) ( Teacher )

Business Negotiations and Contracts - Lesson 4.5 - Confidentiality

• Confidentiality ( w:fi:Vaitiolovelvollisuus ) is a set of rules or a promise that limits access or places restrictions on certain types of information. ( Wikipedia )

• A non-disclosure agreement (NDA) ( w:fi:Salassapitosopimus ), [...] is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to or by third parties. ( Wikipedia)

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Business Negotiations and Contracts - Lesson 5 - Damages

• remedy == compensation == damages ( w:fi:vahingonkorvaus )

• damage ( w:fi:vahinko ) != damages

pecuniary ( money ) vs. non-monetary relief

expectation damages are damages recoverable from a breach of contract by the non-breaching party.

It originates from an injured party's interest in realizing the value of the expectancy that was created by the promise of the other party. ( Wikipedia )

The most common test of proximate cause under the American legal system is foreseeability. It determines if the harm resulting from an action was reasonably able to be predicted. ( Wikipedia )

General damages, sometimes styled hedonic damages, compensate the claimant for the non-monetary aspects of the specific harm suffered. ( Wikipedia )

• In contract law, rescission ( w:fi:purkaminen ) ( verb rescind ( purkaa )) has been defined as the unmaking of a contract between parties. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract (the status quo ante). ( Wikipedia )

Status quo ante is Latin for "the way things were before" and incorporates the term status quo. ( Wikipedia )

The law of restitution is the law of gains-based recovery. It is to be contrasted with the law of compensation| , which is the law of loss-based recovery. ( Wikipedia )

In criminal law, fraud ( w:fi:Petos ) is intentional ( w:fi:tahallisuus ) deception made for personal gain or to damage another individual; the related adjective is fraudulent, and verb is defraud ( Wikipedia )

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Business Negotiations and Contracts - Lesson 6 - Power of attorney

A power of attorney (POA) or letter of attorney ( w:fi:valtakirja, valtuutus ) is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter, sometimes against the wishes of the other's. ( Wikipedia )

Business Negotiations and Contracts - Terminology / vocabulary

• covenant == an agreement w/a specific promise to do or not to do something

non-competition covenant

• whereas == in contrast
• injunction == obligation
• breach == to break a boundary, to violate, to not fulfill
• rescind cancel w/ effect of being the same position as before signing the contract
• unwarranted == uncalled for, unjustified
• contention == disagreement

contentious ( adj. )

• efficacious == effective

• an offer => offeror - offeree
• a lease => lessor - lessee

• statute == law/rule

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Types of business entity in a nutshell

A business ( w:fi:yritys )may be one of the following:

• Private incorporated ( Inc. LLC. Ltd. ) Yksityinen osakeyhtiö, Oy )
• Public incorporated ( PLC. ) ( Julkinen osakeyhtiö (oyj) )
• A w:Cooperative ( w:fi:Osuuskunta ). Obs. there are cooperatives owned by their workers __and__ cooperatives owned by their customers.
• A "person" company such as

• • A w:Sole proprietorship ( also known as the w:Sole trader ) ( w:fi:Toiminimi )
  • A w:General partnership ( w:fi:Avoin yhtiö )
  • A w:Limited partnership ( w:fi:Kommandiittiyhtiö )

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"All companies are businesses, but not all businesses are companies." -- jubo-jubo

• "Incorporated" means it forms a w:legal personality ( w:fi:oikeushenkilö ) of its own and

the owners are never liable for it's liabilities.

• Non-incorporated ( w:fi:henkilöyhtiö ) there is at least one person who has personal liability for the liabilities of the business. The w:silent partner ( hiljainen yhtiömies ) in a limited partnership does not have liability for the businesses liabilities.

Examples of three competing players using different forms of business can be found in Finnish daily

• The S-group customer owned cooperative
• the K-Group is a PLC ( Kesko Oyj ) with Ltd's owned by the merchants.
• Parent company of w:Lidl is a w:Stiftung ( w:fi:Säätiö ) and Lidl Suomi is a limited partnership

Further information: w:Types of business entities ( Contains list for all types of businesses for all w:locales )