MARIANNE M. JENNINGS
7th Ed.
Its Legal, Ethical, and
Global Environment
Chapter 10
Business Torts
Copyright ©2006 by West Legal Studies in Business
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What is a Tort?
• A tort is a civil wrong that is an
interference with someone’s person or
property such that injury results.
• Latin Word Tortus: means “crooked,
dubious, twisted”.
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Torts vs. Crimes
• Tort is a private wrong.
– Injured party seeks remedy.
– Recovers damages from the one who
commits the tort.
• Crime is a public wrong.
• Wrongdoer is prosecuted.
• Pays fine to government or is jailed to
pay debt to society.
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Types of Torts
• Intentional torts:
– More than an accidental wrong.
• Tort of negligence:
– Accidental harms that result from the failure to
think through the consequences.
– Still have liability but there are defenses.
• Strict tort liability:
– Absolute standard of liability.
– Used in product liability cases.
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Other Types of Torts
• Personal Torts
• Property Torts
– False
imprisonment
– Defamation
– Battery
– Assault
– Emotional distress
– Negligence
– Trespass
– Disparagement
– Palming off
– Negligence
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Defamation
• Untrue statement by one party that is
published to a third party.
• Slander is oral or spoken defamation.
• Libel is written, and in some states
broadcast, defamation.
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Defamation
• Elements:
– Statement about a business’ or person’s
reputation or honesty that is untrue.
– Statement is directed at business and
made with malice and intent to injure.
– Publication - someone heard and
understood the statement.
– Damages - economic losses such as
damage to reputation.
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Defamation
• Defenses:
– Truth is a complete defense.
– Privileged speech: two types.
• Absolute privilege.
• Qualified privilege.
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Defamation
• Case 10.1
Wilkow v. Forbes (2001).
– What was Forbes’ defense to libel?
– Can an opinion be libelous?
• Case 10.2 Burnett v. National Enquirer,
Inc. (1983).
– Was malice established in the case? Why was
it necessary to establish malice?
– Is the National Enquirer a newspaper for
purposes of the protection of the privilege?
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Defamation
• References and defamation.
– Managers must use caution when
speaking of former or current employees
to potential new employers.
– The tort of defamation can be
established if false statements are made.
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Contract Interference
• Elements:
– Tortfeasor knew of Employee’s contract.
– Tortfeasor intended to interfere with or
breach contract between EmployerPlaintiff and Employee.
– Employer-Plaintiff is injured by breach
of contract.
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Contract Interference
• Texaco, Inc. v. Pennzoil, Co. (1987)
– The court awarded Pennzoil $7.53
billion in actual damages and $3 billion
in punitive damages for tortuous
interference of contract.
– On April 12, 1987, Texaco filed for
bankruptcy protection.
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False Imprisonment
• Custody of someone else for any period of
time against their will.
• Need not establish physical damages; just
the fact that they are detained establishes
sufficient damages.
• Defense of shopkeeper’s privilege.
– Can detain for reasonable time.
– Must have basis for detaining the individual.
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Intentional Infliction of E.D.
• Liability for conduct that exceeds all
bounds of decency.
• Difficult for plaintiff to establish
emotional distress.
• Has been used by debtors against
collectors.
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Invasion of Privacy
• Public disclosure of private facts
• Appropriation of another’s name for
commercial advantage
• Galella v. Onassis (1972).
– The court ruled Galella had invaded
Jacqueline Kennedy Onassis’ privacy.
• HIPAA protects health/patient privacy.
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Appropriation
• Unauthorized use of someone’s name,
voice, image, or likeness for
commercial advantage.
• Even if manner of use is accurate, it is
a tort because of the use without
authorization.
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Appropriation
• Case 10.3 Midler v. Ford Motor
Co. (1988).
– On appeal, Ms. Midler’s case was tried
and she recovered $400,000.
– Was the audience confused as to who
really sang in the commercial?
– Was the use of Midler’s voice
appropriation?
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Negligence
• Duty—Element One.
– All persons are expected to behave as
ordinary and reasonably prudent persons
do:
• Standard of the law is not always used.
• Example: The speed limit of 45 is not
appropriate in ice and snow.
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Negligence
• Case 10.4 Randi W. v. Muroc Joint
Unified School District (1997).
– What concerns are raised about
imposing liability on those who provide
letters of recommendation?
– What was the proximate cause of Randi
W’s injury?
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Negligence
• Breach of Duty—Element Two
– Failure to comply with established
standard of conduct
• Often connected with element one as courts
struggle to determine whether a duty even
exists
– Case 10.5 Graves v. Warner Brothers
(2004).
• What duty did Jenny Jones show have to
the Plaintiffs?
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Negligence
• Causation—Element Three.
– Breach of duty caused the plaintiff’s
injuries.
– “But/for” causation test .
– Restricted by the zone of danger rule =
Duty.
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Negligence
• Proximate Cause (Foreseeability)—
Element Four.
– Some courts hold the cut-off line must be
drawn between the "but/for" causation and
events contributing to plaintiff's injuries
• Case 10.6 Palsgraf v. Long Island RR
(1928)
– There is a legal limit to what is foreseeable.
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Negligence
• Damages—Element Five.
– Medical bills.
– Lost wages.
– Pain and suffering.
– Loss of consortium (as between
spouses).
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Defenses to Negligence
• Contributory negligence:
– Plaintiff is also negligent.
– Operates as a complete bar to recovery
• Comparative negligence:
– Compare acts of plaintiff and defendant and
assess blame for accident.
– Reduces plaintiff’s recovery by amount of
fault.
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Defenses to Negligence
• Assumption of risk—plaintiff knew of
inherent risk and went forward anyway.
• Case 10.7 Mosca v. Lichtenwalter
(1997).
– Is the risk of being struck by a line inherent
in the sport of fishing?
– What is the difference between assumption
of the risk in day-to-day activities and in
sports?
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Tort Reform
• Current Attempts at Reform:
– Limits on verdicts.
– Standards for recovery.
• Case 10.8 BMW of North America, Inc.
v. Gore (1996).
– What constitutional issues are raised?
– To whom would the dissent leave the issue of
punitive damage?
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Tort Reform
• Limits on Punitives:
– Eighth Amendment excessive punitive
damages is cruel and unusual punishment.
Cooper Industries v. Leatherman Tool
Group (2001).
– Due Process violated with excessive
punitives. State Farm v. Campbell (2003).
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Strict Liability
• Absolute liability for injury.
• Can result from violation of statute
(improper disposal of toxic waste).
• Public policy reason is manufacturers
take appropriate steps to design and
manufacture products.
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