torts

Essentials of Business Law -- 4th Edition6

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Quotes of the Day

“The life of the law has not been logic; it has been experience.”

Oliver Wendell Holmes, Jr., Supreme Court Justice

“It is perfectly monstrous the way people go about nowadays saying things behind one’s

back that are absolutely true.”Lord Henry, in Oscar Wilde’s The Picture of Dorian Gray



Tort Means “Wrong”

p Defamation -- making a false statement about someone - written or verbal

p Negligence -- performing wrong surgeryp Interference with contract -- stealing a

client away from a competitorp Fraud -- offering to sell something that

doesn’t exist

A tort is a violation of a duty imposed by civil law.



p Criminal Law -- behavior classified as dangerous to society; prosecuted by the government, whether victim wants to prosecute or not; money award goes to the government

p Contract Law -- based on breach of an agreement between the two parties; victim prosecutes and receives compensation or restitution.

p Tort Law -- based on an obligation imposed by the law with no agreement needed between parties; victim prosecutes and receives compensation or restitution.

Tort vs. Criminal or Contract Law



Categories of Tort Lawp Intentional Torts

• Does not necessarily require an intention to harm the victim, only an intention to perform the act which caused the injury. (Intentionally throwing an object, but not meaning to hit anyone is a tort if it causes injury to someone.)

• Includes business torts, a category of torts perpetuated almost exclusively by business entities.

p Negligence and Strict Liability• When a duty is breached and harm results, courts

will examine the facts to determine if there has been negligence.



Intentional Tort - Defamationp Defamation is irresponsible speech to harm

another’s reputation.• Written defamation is libel.• Verbal defamation is slander.

p There are four facts to prove to win a defamation suit:• The defamatory statement was actually made.• The statement is false.• The statement was communicated to someone

other than the plaintiff.• In slander cases, the plaintiff must show some injury

that resulted from the defamation.



Defamation (cont’d)

p Opinion -- to be defamation, the statement must be provable and not simply someone’s opinion.• Vague terms in the statement usually

indicate it is an opinion, not a provable fact.• Extreme exaggerations are usually not taken

as fact.



Defamation (cont’d)p Public Personalities

• Includes: public officials (police and politicians) and public figures (movie stars and other celebrities)

• Public personalities have a harder time winning a defamation case because they have to prove that the defendant acted with actual malice.

p Internet Service Providers have been held to be not liable for postings made by their users.

p Privilege• Defendants receive extra protection in special cases.• In courtrooms and legislatures, speakers have absolute

privilege. They may speak freely, as long as it is true.• When information is legitimately needed, the speaker

giving it has qualified privilege. This may happen when someone reports a suspected criminal act.



Intentional Tort - False Imprisonment

p False imprisonment is the restraint of someone against their will and without reasonable cause.

p An employer who doesn’t let a sick employee go home might be guilty of false imprisonment.

p If the police detain a person with no reason to suspect him of any crime, it could be false imprisonment.

p In general, a store may detain a person suspected of shoplifting if there is a reasonable basis for the charge and the detention is done reasonably (in private and for a reasonable time).



Intentional Infliction of Emotional Distress Intentional Tort --

p Historically, no recovery was allowed if the injury was only emotional instead of physical.

p Today, most courts allow a plaintiff to recover from a defendant who intentionally causes emotional injury.• Behavior causing injury must be extreme and

outrageous.• Must have caused serious emotional harm.

p Some courts allow recovery for emotional injury caused by negligent behavior.



Additional Intentional Tortsp Battery is a touching of another person in a

way that is unwanted or offensive.• The touch does not have to hurt the victim -- sexual

touching that is offensive, but not painful, is battery.• An intentional action that does hurt someone may

be battery even if the injury is unintentional.p Assault is an action that causes the victim to

fear an imminent battery.• Assault can occur without battery ever happening.• Pulling a gun on someone -- even if it is unloaded --

is usually considered assault.p Fraud is injuring another person by deliberate

deception.



Compensatory Damagesp A jury may award compensatory damages --

payment for injury --to a plaintiff who prevails in a civil suit.

p The Single Recovery Principle mandates that the court must decide all damages -- past, present and future -- at one time and settle the matter completely.

p Damages may include money for three purposes:• to restore any loss (such as medical expenses)

caused by the illegal action• to restore lost wages if the injury kept the defendant

from working• to compensate for pain and suffering



Punitive Damagesp While the purpose of compensatory damages

is to help the victim recover what was lost, punitive damages are intended to punish the guilty party.• Intended for conduct that is outrageous and extreme• Designed to “make an example” out of the

defendant• Should deter others from doing same conduct and

prevent this defendant from repeating actionsp Sometimes punitive damage awards are huge,

but in most cases they are close to or less than the amount of compensatory damages awarded.



Business Torts

p Interference with business relations• Interference with a contract• Interference with a prospective advantage

p The rights to privacy and publicity• Intrusion• Commercial exploitation

Intentional torts that occur almost exclusively in a business setting are called business torts.



Interference with Business Relationsp Interference with a contract exists if the

plaintiff can prove these elements:• There was a contract between the plaintiff

and a third party and the defendant knew of the contract.

• The defendant induced the third party to breach the contract or make performance impossible.

• There was injury to the plaintiff.



Interference with Business Relations

p Interference with prospective advantage exists:• when there is a relationship which gives the

plaintiff a reasonable expectation of economic advantage, even though no contract exists

• when the defendant maliciously interferes and prevents the relationship from developing



Privacy and Publicityp Intrusion (prying into someone’s private life) is

a tort if a reasonable person would find it offensive.• Examples: wiretapping, stalking, peeping• Would this include buying your personal information

from your credit card company?p a person’s image or voice is used for

commercial purposes without that person’s permission.



Negligence --

p Duty of due care -- there must be a duty owed to the plaintiff.

p Breach -- duty must be breached.p Factual cause -- the injury must have been

caused by the defendant’s actions.p Foreseeable harm -- it must have been

foreseeable that the action would cause this kind of harm.

p Injury -- the plaintiff must have been hurt.

To win a negligence case, the plaintiff must prove that the defendant failed in five areas:

“The Unintentional Tort”



Duty of Due Carep If a defendant could have foreseen

injury to a particular person, she has a duty to him.• In some states, a social host serving

alcohol to an adult may be found liable for harm done by the person drinking the alcohol.

• Many states have a “dram act,” making liquor stores, bars and restaurants liable for serving drinks to intoxicated customers who later cause harm.



Breach of Dutyp A defendant breaches his duty of due care by

failing to behave the way a reasonable person would under similar circumstances.

p Companies and Employees -- courts have found companies liable for hiring and retaining employees known to be violent, when those employees later injured co-workers.

p Negligence per se -- in special cases, legislatures set a minimum standard for certain groups of people (esp. children). When a violation of that statute hurts a member of that group, the duty is breached.



Factual Cause & Foreseeable Harmp Factual Cause -- if the defendant’s breach

ultimately led to the injury, he is liable.• Does not have to be the immediate cause of

injury, but must be the first in the direct line.

p Foreseeable Harm -- to be liable, this type of harm must have been foreseeable.• The defendant does not have to know exactly

what would happen -- just the type of event.

p Res Ipsa Loquitur -- in a few cases, the defendant must prove he was NOT negligent or the facts imply that his negligence caused the injury.



Example: Factual Cause & Foreseeable HarmMechanic fails to

fix customer’s brakes, which

causes...

Car accident, car hitting bicyclist

Mechanic is liable to cyclist

Car accident, car hitting bicyclist

Noise from accident startles

someone who falls out a window

Mechanic is NOT liable for falling person

Factual cause and foreseeable type of injury

Factual cause, but no foreseeable type of injury

Car accident, car

does not hit bicyclist

Bicyclist hits pothole and

crashes

Mechanic is NOT liable to cyclist

No factual cause

Mechanic fails to fix customer’s brakes, which

causes...

Mechanic fails to fix customer’s brakes, which

causes...

DO NOT CLICK! Let slide “build” on its own.



Injury & Damagesp Injury -- plaintiff must show genuine injury

• Future injury may be compensated, but must be determined at the time of trial.

p Damages -- are usually compensatory, designed to restore what was lost. In unusual cases, they may be punitive.



Negligencep Contributory Negligence

• In a few states, if the plaintiff is AT ALL negligent, he cannot recover damages from the defendant.

p Comparative Negligence• In most states, if the plaintiff is negligent, a

percentage of negligence is applied to both the defendant and the plaintiff.

• The plaintiff can recover from the defendant to the percentage that the defendant is negligent.

• In some cases, a plaintiff found to be more than 50% negligent cannot recover at all.



Assumption of the Risk

p A person who voluntarily enters a situation that has an obvious danger cannot complain if she is injured.• This rule applies to a situation where the

danger is well-known and the participant chooses to be present.



Strict Liability

p Defective Products-- may incur strict liability.p Ultrahazardous Activities -- defendants are

virtually always held liable for harm.• What is ultrahazardous? Includes using harmful

chemicals, explosives and keeping wild animals.• Plaintiff does not have to prove breach of duty or

foreseeable harm.• Comparative negligence does not apply --

defendant engaging in ultrahazardous activity is wholly liable.

Some activities are so dangerous that the law imposes a high burden on them. This is called strict liability.



“A wide variety of intended acts can have unintended consequences. A defendant may not have intended to harm a plaintiff, but her deliberate

actions have resulted in injury. When someone’s person or property is hurt, how far should society extend liability?

Anticipating the harm enables us to consider the actions themselves.”

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