Generally About Laws

Generally About Laws
Posted on March 8, 2016 | Allan Cutler | Written on March 8, 2016
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Author's Note:

Author's Note:

The purpose of these posts to inform the reader of major procurement issues while focusing on the public sector. Public sector procurement is very complex. To understand procurement in-depth requires detailed study and extensive experience.

As I have written before, I am not a lawyer. However to be a professional in procurement, one must have a general overview of the law and the various legal fields in addition to contract law.

First, let’s divide the laws into two parts: public laws and private laws. Public law deals with the relationship between individuals and the government. It involves the different government jurisdictions (federal/provincial/municipal, etc.). Private law, on the other hand, deals with the legal relationship between individuals or businesses. On the surface it would appear that public sector procurement deals only with ‘public’ law. This is substantially correct. However, when a legal situation develops, it can become ‘messy’ involving both public and private laws as the number of parties involved increases.

Now let’s divide the laws into different categories:

Tort law: laws that govern or justify what behaviour or actions will be appropriate compensation by the person who inflicts harm to the person who is harmed.

Contract Law: This establishes the rules under which a business arrangement between two parties will take place and the remedies for any breach of those obligations by either party.

Agency Law: Under this law, people are authorized to perform tasks for others. The rules and obligations can be very complex.

Corporate Law: Gradually the corporation has developed as a legal entity that stands alone. It has the same capacity to contract as an individual and, arguably, the same moral and legal obligations of an individual.  

As a specialist in procurement I am more interested in Contract Law but, unlike the U.S.A., there are two different rules of law in Canada. In Quebec there is civil law based on the Napoleonic code and, for the rest of Canada, there is common law (which is similar to the U.S.A.)

Quebec civil law is based on the French legal system. It is a Code, not a ‘common’ law. There is much more importance based on the code than on precedent. Precedent, generally, is used only to interpret the codified laws. The definition of a contract under civil law is “An agreement of wills by which two or more persons oblige themselves to one or more persons to perform an obligation, the content of which is not against the public order or the law.” (Article 1378 Civil Code of Quebec)

On the other hand, common law used by the rest of Canada and in the U.S.A. is based on the British legal system. It relies mainly on precedent (what has gone on before). In order to deviate or establish a difference outcome, a judge must show how the current situation differs substantially from previous ones. A Canadian definition of common law is “An agreement between two or more persons, which creates an obligation to do or not to do a particular thing. Its essentials are competent parties, mutuality of agreement and mutuality of obligation.”  (Government of Canada, Public Works and Government Services).  An U.S.A. definition is very similar, “An agreement creating obligations enforceable by law. The basic elements of a contract are mutual assent, consideration, capacity and legality. In some states, the element of consideration can be satisfied by a valid substitute.” (Cornell University Law School)

This difference is a caution to anyone or firm contracting in Quebec. If the contract is completed without a problem, it makes no difference which provincial law governs. However, as a precaution, many firms resident in other provinces will insert a written clause into a contract that ensures their provincial law governs. For example a clause might read, “The laws in form in the province of Ontario govern the interpretation of this contract and the relations between the two parties. “

About The Author

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With over 35 years of procurement experience, Allan Cutler consults with and assists firms in preparing proposals in response to competitive RFP. He understands procurement documents and negotiating with the public... More