Contests – What are the rules for Rules?

Posted on by Mary G. Griffith

My contest rules go on for pages! Yes, usually they do. This is necessary in order to properly set out all the terms and conditions that apply to entering the contest or winning a prize, what the prize EXACTLY includes (yes it’s a trip to Hawaii but who pays for me to get to the airport?!), what the sponsor’s obligations are, and what the entrant’s or the winner’s obligations are (what do you mean I can’t win the trip to Hawaii because I can’t get a passport?!)

So-called “mini-rules” are allowed in certain situations where the contest is being advertised but the full rules can’t be included – such as TV commercials, or print ads, or the back of the entry form – BUT, you need to let a potential entrant know where they can find the full rules. Also, the mini-rules need to give other KEY information about who can enter and how often; what the prize is and what it’s worth; the fact that no purchase is necessary (and how to enter without one); the fact that the winner has to have correctly answered a skill testing question and signed a liability and publicity release; the odds of winning; and start and end dates of the contest and the draw date.

So what about on-line advertising of contests? While officially the rules are the same for off-line AND on-line contests, generally an exception is recognized that as long as the full rules can be accessed “one-click” away from an on-line advertisement then that is acceptable.

So, the rule for rules is that… there needs to be a full set of rules; but sometimes, it’s ok if they’re only one click away.

Wills: Why Consider Primary and Secondary Wills?

Posted on by Mary G. Griffith

The option of preparing Primary and Secondary Wills has always been something to consider if you own shares in a privately held Canadian corporation (particularly for example in a family business) because the shares can be transferred to the beneficiary under the Secondary Will which would not need to be probated. In the example of shares in a family business, the advantage of using a Secondary will would be to avoid the potential difficulty and expense that could be involved in trying to undertake an accurate business valuation of a small private company in order to include the worth of those shareholdings in the probate application.

Until January of 2015, the application for letters probate required two subtotals (one for personal property and one for real property) and their sum, which gave the total value of an estate. The change that came into effect in Ontario in January 2015, now requiring an applicant to itemize the value of all the component parts of an estate, may have increased the accuracy of the stated value of an estate however it has also resulted in some clearly ineffective und unfortunate results. Some executors, now faced with the necessity of valuing all estate items, have no choice but to spend more to value certain items than those items may be worth.

Where the Secondary Will can be used to cover items of the estate such as furnishings or sentimental keepsakes that may have little monetary value and can be transferred under that Secondary Will without the need to have them valued, it should be considered. As a result, the benefit of having a Primary and Secondary Will seems more and more evident, and therefore should be extended to many more testators.

Corporate Governance: One Size Doesn’t Fit All

Posted on by Michael A. Chambers

It has come to my attention over my many years sitting as a member of various Boards of Directors that many governance consultants fail to understand and appreciate the difference between for-profit corporations and non-profit corporations when it comes to corporate governance. They are not two peas in a pod.

It goes without question that the fundamental principles of good governance such as accountability and transparency apply to both the profit and non-profit sector. It’s how those principles are applied to those two sectors that differentiate them.

An example of the differences in approach is the selection of the organization’s President. In the for-profit sector the President, without exception is selected and appointed by the Board. The shareholders vote in, or out, the Board and charge the Board with the responsibility of selecting a President and CEO who will lead the organization in such a manner that profit is maximized for return on investment to the shareholders by way of dividends or an increased market value of their shares. It is never the shareholders who select a for-profit company’s President.

On the other hand, it is frequent, if not commonly the case, that in the non-profit sector the President is elected to that position, not by the Board, but by the organizations members – the equivalent of the for-profit’s shareholders. There is, in non-profit organizations, much more a feeling of affinity and shared personal purpose between the members and their President. There is in most cases a common cause to pursue, and to ensure accountability for the pursuit of that common cause it is important, of fundamental importance, that the members directly select their President. This of course is not the case with every non-profit but it is for many, and it is an important distinction to appreciate when looking at governance. It is but one example of the fact that one size does not fit all when applying the principles of good governance to profit and non-profit corporations.

Transport Canada, UAVs and Grocery Delivery?

Posted on by Frank G. Tanner

Transport Canada (“Transport”) is in the process of drafting new Regulations that will apply to drones or unmanned air vehicles (“UAVs”). I was approached by an international insurance firm in the spring of 2014 for direction relating to the air regulations dealing with UAVs. I could only surmise the device would be used in surveillance of claimants alleging, for example, total disability, but who may be out cutting their back yard lawn. Currently Canadian air regulations and practice require a written request setting out particulars of the UAV (e.g. maximum takeoff weight; range); the operators’ credentials; and operational details including purpose and time of flights, and geographical area of operation. When satisfied that safety and operational requirements have been met, Transport issues a Special Flight Operations Certificate (“SFOC”).

The number of applications for non-recreational SFOCs received by Transport increased by over 400% between 2012 and 2014; hence Transport’s interest in revising its Regulations after inviting public comment and conducting prior study groups. Transport’s studies indicate that UAV’s are currently used extensively by police, agricultural interests, urban planners and surveyors, film crews, and rescue and relief operations. It seems everybody wants to get into the UAV business. Recent newspaper releases indicate that Wal-Mart Stores Inc. has applied to the American FAA for permission to test UAVs delivering product following similar requests from Amazon and Google.

The proposed Canadian Regulations will set categories of UAVs based on maximum takeoff weight, likely less than 35 kg (77.2 lbs.), and those UAVs having a takeoff weight greater than that maximum.

So this begs the question: can delivery of your daily double-double by UAVs be that far off?

Avoiding Surprises – Tips from a Family Law Lawyer – Part 1

Posted on by Michael A. Chambers

Although family law, which is the law that governs the regulation of property, support and custody and access rights between married and non-married couples and parents of not yet independent children, is generally well known to most lawyers, it has been my experience that it holds surprises for just about everybody else. With this series of blog posts, I would like to share with you some of the most common aspects of family law that come as a surprise to many people.

The first is the exemption from property division on separation of gifts or inheritances from persons other than your spouse, usually from a parent it seems, and the loss of that exemption if the gift or inheritance is invested in any form in the matrimonial home. As a rule a gift or inheritance after marriage is excluded from the division of property, an equalization process on separation – something that I will explain in a later posting – and may be kept by the spouse who received it, free from any claims against it on the part of the other spouse. It does, generally, still have to be intact and separately identifiable or traceable as such if it has changed forms over the years – first received in cash, then used to buy a boat, then the boat was sold to buy paintings, etc. – the cash gift or inheritance in this case is “traceable” to the paintings.

The surprise for so many is that if the gift or inheritance is invested into the matrimonial home the gift or inheritance loses its exemption. Thus if it is used as part of the purchase price of a matrimonial home or, as I experience most often, is used to pay down the mortgage, the gift or inheritance loses its exemption and may not be separated out from the division of assets, the equalization process, if the spouses should separate at a later date. It is important that spouses be aware of this in order to avoid surprise at a later date. A spouse may still choose to do this, invest the gift or inheritance in a matrimonial home, but it is important that if he or she does do it, it is done with his or her eyes wide open and with knowledge of the consequences – no surprises later.

A simple and easy way to avoid the consequence of losing the exemption is to enter into a Marriage Contract with your spouse that specifically retains the exemption and ensures that in the event of separation the gift or inheritance will be returned to the spouse who it was given or bequeathed to free of any claim on the part of the other spouse.

Tips for a First-Time Home Buyer – Part 1

Posted on by Megan E. Fife

Buying your first home is both an exciting and intimidating experience. Being a relatively recent first-time homebuyer myself, as well as a practicing real estate lawyer, I’ve picked up a few tips and tricks I’ll be sharing over the course of this series that I hope will help make the process less stressful and more exciting.

First and foremost, whether you have a real estate agent or not, and whether you’re buying a condo or a house, you’re going to have to retain the services of a lawyer. The process of registering the completed change of ownership, as well as removing and adding any mortgages or lines of credit against the property, can only be completed by a lawyer.

While this may seem obvious to a lot of people, what many don’t know is that retaining a lawyer to look over your Agreement of Purchase and Sale before you sign on the dotted line is the best way to ensure your needs and interests are being met. What conditions to the agreement do you require and what information is the seller obligated to disclose to you respecting the property? Are your best interests protected? As much as your real estate agent (if you have one) may have your best interests in mind, there’s no better security than having an independent, legal mind review the agreement before you commit. So many buyers (and sellers) wait until the deal is done to retain a lawyer, and by then, once the Agreement has been signed, there’s nothing your lawyer can do to change any conditions you’ve agreed to include (or not include). The process of putting an offer on a home, negotiating and ultimately closing the deal can be a whirlwind, especially for a first time buyer. Including your lawyer as an independent third party from the beginning is the best option you have to avoid surprises along the way.

So, tip #1 – retain a lawyer early and involve them in the process before the deal is done. Buying a home is the biggest purchase you’ll ever make, and you owe it to yourself to ensure that your interests (and your money) are protected.

Not-for-Profit Organizations: It’s Never the Wrong Time to Review

Posted on by Megan E. Fife

October 17, 2014 was the deadline for all federally incorporated not-for-profit corporations to have transitioned under the new Canada Not-for-profit Corporations Act. This process included replacing letters patent and by-laws with new charter documents and my personal experience proved this process to be relatively straight-forward and beneficial for a number of reasons, including requiring all applicable corporations to truly review and revise their corporate documentation to best suit their current needs. All in all, a positive endeavor.

Now, it may soon be time for all not-for-profit corporations incorporated under Ontario legislation to follow suit, and while it seems we will be given plenty of notice, it’s never too early to prepare.

What are some key points to keep in mind?

  • This change will occur once the Ontario Not-for-Profit Corporations Act, 2010 (ONCA) is brought into force
  • Existing corporations will have a three-year transition period once the ONCA is in force
  • Documents that may need to be reviewed and changed include letters patent and any supplementary letters patent, by-laws, and special resolutions

The Ontario government’s Ministry of Government and Consumer Services website provides some handy tools to assist the transition process and answer most general questions you may have (see http://www.sse.gov.on.ca/mcs/en/Pages/onca1.aspx). The advice to consult a lawyer to assist with your corporation’s transition is sound; while you may only have to complete this process once, we will do it dozens of times for a variety of clients, allowing us to offer the advantage of familiarity with the process; a time-saver in and of itself!

No matter how you choose to go about it, once the ONCA is brought into force, all Ontario not-for-profit corporations will need to complete the transition within the time period prescribed, or risk dissolution. Until that time, it never hurts to review your corporation’s governing documents and ask yourself questions like: does the purpose still accurately describe our goals? Do the by-laws address all relevant issues and are we following them accordingly? Are the directors listed still the acting directors?

Don’t wait until legislation requires you to review. And stay tuned for updates regarding the new ONCA.

Regulatory Law and Cosmetics in Canada – Who Controls What?

Posted on by Gordon B. Greenwood

A very simplistic answer to that question in relation to cosmetics is that the Federal Government controls their manufacture, their ingredients, their importation and their labelling. The provinces control the people who supply cosmetic services to the public, the establishments in which they are provided and the sanitation and licensing of those premises. In some jurisdictions the cosmetologists themselves may be licensed but this is not uniform across Canada.

The safety of ingredients to the environment is a Federal concern but provinces also get involved. The recycling of packaging waste is a provincial responsibility but the product washed down the drain has both Federal and provincial impact. Areas of provincial responsibility, be it assigned or assumed, may be delegated to municipalities for such responsibilities as inspection and enforcement. Municipalities are, in effect, creatures of provincial creation and often are given tasks to assume. But while the language of a label is a Federal concern, in the Province of Quebec there is a significant provincial impact requiring the use of the French language.

While this is a very simplistic overview of regulatory responsibilities, it also indicates, as with most things in life, that there really is no simple answer!

Commercial Law CAN Be Creative If Given The Time…

Posted on by Gordon B. Greenwood

Commercial Law is the law of business but it also involves all those boring and annoying things that get in the way of business people doing what they do best: manufacturing, buying and selling their goods and services. Distribution contracts, supply contracts, protected territories, sourcing products, shipping arrangements, insurance, etc., etc., etc.! While these items don’t allow the same latitude of creativity that one has when one is inventing a product, designing packaging or finding unique ways to supply a service, there is still the possibility to be creative within the area of Commercial Law. There may not be a lot of flexibility, but it is still best to outline your objectives before getting bogged down in the verbiage of pro forma contracts and precedents.

Think first, write later!

Too frequently, the lawyers who are responsible for drafting a lot of these agreements are not consulted early enough in the process to be able to help mould commercial concepts into the verbiage of agreements in order to meet the needs of all of the parties and address the way they may want to operate in the future. When under tight time constraints, and especially when there is little communication between client and lawyer, it becomes necessary to use precedents which ultimately force clients into a course of conduct which was not initially envisioned by the various parties. Allow the time required, and have the discussions necessary to get agreements tailored to your specific situation. Let your creative juices flow. Build more innovative agreements. Don’t write like Charles Dickens!