THE CHINESE UNIVERSITY OF HONG KONG

School of Accountancy
ACCT 3151
Business Law
(First Term, 2016-2017)
INSTRUCTORS
Name:
Office Location:
Telephone:
Email:

Dr. Anthony MW Law

Room 1034, 10/F, Cheng Yu Tung Building
3943 7765
Anthony@baf.msmail.cuhk.edu.hk

Name:
Email:

Professor Martin Ko
martin.ko@graduate.hku.hk

TEACHING ASSISTANT
Name:
Office Location:
Telephone:
Email:

Mr. Liu Xin

Room 1051, 10/F, Cheng Yu Tung Building
3943 1525
liuxin@baf.cuhk.edu.hk

COURSE OBJECTIVE
This course seeks to provide an introduction to the institutions, doctrines and methodology
of the law in the business context. To this end, 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, agency, employment and
the sale of goods.
Students can know the important rules of business law and the interaction between law
and business ethics at the end of the course. These rules concern how the courts deal with
business-related disputes in the real life. As many of the rules are designed to protect
consumers, students can in particular know more about consumers rights. In addition,
they can learn more analytical skills and writing skills which can help them to apply the
rules to do their assessments.

LEARNING OUTCOMES
After completing this course, students will be able to:
(1)
(2)
(3)
(4)

acquire the knowledge of the important rules of business law

have effective written communication skills needed by professionals
be aware of ethical issues including those that interact with business law
apply the rules of business law to solve problems in a business setting

LEARNING ACTIVITIES
Lecture (including
in-class discussion /
presentation)
(hr)
in / out class
3
0

Lab / tutorial
(hr)
in / out class
0

Project / Case
discussion (hr)
in / out class

Expected out-ofclass activities (hrs)

in / out class
0

COURSE ASSESSMENT
Task nature
Coursework 1
Coursework 2
Examination

Weight
25%
25%
50%

COURSE SCHEDULE
Class
week
1
2-4
5
6-7
8
9
10
11
12
13

/ Date
See the dates
of
the
relevant
teaching
weeks

Topic

Requirement

The legal system of the Hong Kong

SAR
Contract
law: formation
of
contracts
Contract law: contract terms and
exemption clauses
Contract law: vitiating factors
Contract law: discharge of contracts
Contract law: the remedies for
breach of contracts
Employment law
Torts law
Agency law and sale of goods law
Laws against Money Laundering
and Laws against Financing
Terrorism

Relevant readings are

stated at the end of each
topic of the course
materials

RECOMMENDED LEARNING RESOURCES

Textbook
D.K. Srivastava, ed., Business Law in Hong Kong (Hong Kong: Sweet & Maxwell Asia,
4th ed., 2014)
Major References
K. Arjunan & A. Majid, Business Law in Hong Kong (Hong Kong: LexisNexis, 2 nd ed.,
2009)
This book can be viewed online: Step one type business law in Hong Kong in the search icon of our library website
Step two click the online search in the section on business law in Hong Kong in the
easy search webpage
Step three click the Access via LexisHK
Step four click browse on the left side of the screen when you see the LexisHK website
and you can then read this book online
Observe the terms of use as stated in the library website
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.
Course announcement via email and Blackboard (the e-learning system)
ACADEMIC HONESTY AND PLAGIARISM
The Chinese University of Hong Kong places very high importance on honesty in
academic work submitted by students, and adopts a policy of zero tolerance on cheating
and plagiarism. Any related offence will lead to disciplinary action including termination
of studies at the University. Attention is drawn to University policy and regulations on
honesty in academic work, and to the disciplinary guidelines and procedures applicable to
breaches
of
such
policy
and
regulations.
See
http://www.cuhk.edu.hk/policy/academichonesty/ for details.

ADDITIONAL INFORMATION
List of topics
Topics
Contents / fundamental concepts
The legal system of the Hong Kong The Basic Law, legislation, common law, equity
SAR
and the court system
Contract law

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)

Employment law

Employees / independent contractors and the rights

of employees

Torts law

Negligence

Agency law

The rights and duties of agents, authority of agents

Sale of goods law

Important rules under the Sale of Goods Ordinance

Laws against Money Laundering

and Laws against Financing
Terrorism
* There are terms translated in Chinese by the Hong Kong SAR government in the course
materials for your easy reference.
Students are warmly welcome to send email messages to teachers if they have any
comment or feedback on the course.

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 Peoples 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 Peoples Congress ( - Chinas
legislature)
Regarded by the Hong Kong courts to be the constitution ( ) 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
What if a law contravenes the Basic Law?

No law can contravene the Basic Law (as the Basic Law is the constitutional
document)
The Basic Law has a human rights chapter (cap. 3). In this chapter, many rights are
provided, e.g. freedom of speech, personal liberty, freedom of association and
freedom of religion, etc.
The courts can declare a law to be invalid if it contravenes these rights as laid down
in the Basic Law. This power, called judicial review (), is based on the
common law tradition.

Which bodies interpret the Basic Law?

5

The local courts are given the power by the National Peoples Congress to interpret the
Basic Law: article 158(3). The Standing Committee ( ) of the National
Peoples Congress may also interpret the Basic Law or re-interpret the Basic Law after the
Court of Final Appeal have done so under article 158(1). This point has been confirmed in
Lau v Director of Immigration [1999] 4 HKC 731.
Note that the PRC legal system is not based on the common law tradition. So its judiciary
does not have the power to interpret the Chinese Constitution.
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)
How do the judges interpret legislations?

The literal rule (the judges interpret the legislations literally if their words are clear)
The purposive rule (the judges apply the intention and meaning behind the
legislations)

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 ()?

The rules made by the judges in deciding cases.

The rules are made after many centuries of judicial development.
Common law has its inception in England. It is later introduced in her colonies,
including Hong Kong (before 1997).
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.
Legislations can be passed to modify () or repeal () common law rules
that may have become outdated. An example was that under the common law, a
womans property became her husbands when she married him. This has been
abolished by legislation.

What are rules of equity ()?

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 () under the common
law for breach of contract is an award of damages () 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 the loss of profits to the seller). (Agreed 5M, now sell to another person for
4.8M, compensate 0.2M, costs of land agency, legal costs)
Under the law of equity, the victim of the breach of contract may also have the remedy of
rescission of contract ( ) (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.
(Water leakage in house, can return house for refund, not just take the award of damages
and forced to take the house)
How do we address the parties in court cases?
Plaintiff (), defendant (), appellant () and respondent ().
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 CUHKs University Library System
b. Click the database by title on the screen
c. Click w on the screen
d. Click the Westlaw HK (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.
worldLII website for court cases
Ranking of Law
Who made it?
Basic Law (a constitutional The
National
document)
Congress
Legislation
Equity
Common Law

Who interpret(s) it?

Peoples The Standing Committee of
the
National
Peoples
Congress + the courts
The Legislative Council
The courts
The courts
The courts
The courts
The courts

[E] The courts and tribunals in Hong Kong?

The judiciary consists of the courts and the tribunals ( ). The hierarchy of the
local judiciary is as follows: a.
b.
c.
d.
e.
f.

The Court of Final Appeal ()

The Court of Appeal ()
The Court of First Instance ()
The District Court ()
The Magistrate Courts ()
The tribunals (e.g. the Small Claims Tribunal () and the Labour
Tribunal ( ) which deal with specific and not so complicated legal
issues

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

Civil Appeal

Court of Final Appeal

Superior Courts

Court of Appeal
High
Court
Court of First Instance

Appeal vs. cases decided

by some other tribunals

District Court
Inferior Courts

(civil cases involving an

amount of not more than 1
million)

Magistrate Court
(criminal cases only)

Appeal vs. cases decided by the Labour

Tribunal and the Small Claims Tribunal
(civil cases involving an amount of not
more than $50,000)

Tribunals
(Factual disputes,
legal arguments in
other courts)

[F] Civil law and Criminal law

- Different aims and remedies (compensation vs punishment)
- Different proceedings (a jury () in the Court of First Instance in criminal cases)
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: Arthur McInnis, Legal System of Hong Kong, D.K. Srivastava, ed., Business Law in
Hong Kong (Hong Kong: Sweet & Maxwell Asia, 4th ed., 2014)
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).

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