Legal Risk Management Plan forTim Hortons Company (Essay Sample)

Legal Risk Management Plan: Tim Hortons Company Name Institution Legal Risk Management Plan: Tim Hortons Company A legal risk management plan is essential for any given organization as it identifies potential legal risks that might arise in the course of doing business. For a business to succeed, the management has to be proactive in dealing with potential risks identified through an accurate legal risk management plan. Legal risk management entails an array of activities that include the identification of risks, their evaluation, formulating a risk management plan, and implementing the plan. Tim Hortons Inc. is a Canadian multinational fast food outlet which is known for its doughnuts and coffee. It is ranked as Canada's largest quick service café chain as it runs a total of 4, 413 restaurants, out of which 24 are company owned and the rest are franchised. Being such an enormous firm, Tim Hortons Inc. must formulate a legal risk management plan that addresses all its corporate departments both locally and internationally. This plan should be able to assist the company's management to reduce the likelihood of encountering legal challenges in the future business operations. Thus, if properly implemented, a legal risk management plan can be crucial in augmenting the perceived value of the entity, mitigate the identified risks, and generally ensure that the firm attains its set objectives. 1) Negligence can be defined as a careless act that causes harm to another. As is the case with tort law, the law of negligence seeks to compensate victims for their injury or loss that arise from a careless deed and which can be proved via a series of small tests. For instance, one has to assess whether the defendant owes the plaintiff a duty of care, whether the defendant breached the standard of care, and whether the specific careless act actually led to the plaintiff's injury or loss. Since Tim Hortons Inc. runs a chain of restaurants that mostly sell coffee and doughnuts, it is vital that the safety of their customers be a priority. Should an employee get burnt by hot coffee due to lack of proper heat insulation, Tim Hortons Inc. could be held liable for the damages caused. Such damages could either be general damages which involve pain that an individual suffers due to the incident, as well as pecuniary damages - those that can be quantified in monetary terms. Nevertheless, an employee may exhibit a degree of contributory negligence to some extent. If this is the case, it can be recommended that Tim Hortons Inc. clearly indicate in its contract with employees the terms should they suffer any injuries while at work. Additionally, to ensure that the company avoids such a legal risk, the management should ensure that proper heat handling gear is in place for their employees' safety. 2) Tim Hortons Inc. has numerous suppliers who provide its outlets, both company owned and franchised, with the required resources to ensure the restaurant business runs smoothly. In 2003, Tim Hortons Inc. decided to switch to a par baking system which contradicted the chain's "always fresh" slogan. This switch led to various litigations by the company's franchisees as they claimed that it was a breach of contract, breach of fair dealing, unjust enrichment, and negligent misrepresentation by the mother company. Having entered into a contract with its franchisees, Tim Hortons Inc. held the responsibility to supply its subsidiaries with fresh doughnuts as opposed to par baking. Therefore, the legal risk that may arise in this situation is breach of contract which ensues when a binding agreement is not honored by one of the parties to the contract. A breach of contract can be termed as a civil wrong and the innocent party is entitled by law to sue for damages caused. In such a contract as Tim Hortons and its franchisees several things may go wrong, leaving the company unable to fulfill its obligations as outlined in the contract and therefore breaching their contract. It can, therefore, be recommended that the company transfers the risk through a limited liability clause. However, transferring the legal risk involved may adversely affect the franchisees interests in entering into any other future contracts with Tim Hortons Inc. Instead, the firm could clearly outline its terms and conditions in the contract that has bound the mother company and its franchisees together, while ensuring the avoidance of vague and ambiguous use of language that may bring about contractual confusion. 3) Tim Hortons should ensure that the environment that its chain of restaurants are operating in is clean and safe. Failure to ensure that the environment is protected and kept clean may lead to several litigations that may include nuisance. This may occur if Tim Hortons Inc. does not adhere to dumping and waste management laws, which may lead to environmental damage or even harm community property. A nuisance can be described as an activity that occurs at an occupier's property that unreasonably interferes with the community's right of enjoyment of their property, for instance dumping waste food at inappropriate places. In order for an act to be considered a nuisance, it must not be temporary and it has to be both an unreasonable interference and substantial. If Tim Hortons Inc. were to get involved in dumping in undesignated sites which may cause substantial harm to the neighboring properties or community, the company may be termed as having acted in public nuisance. Hence, the company may be held lia...