19 E
Chapter 3
Business Torts and Crimes
©©
2014
Cengage
Learning.
AllAll
Rights
Reserved.
May
notnot
be be
copied,
scanned,
or or
duplicated,
in whole
or or
in part,
except
for for
useuse
as permitted
in ain a license distributed with a certain
2017
Cengage
Learning.
Rights
Reserved.
May
copied,
scanned,
duplicated,
in whole
in part,
except
as permitted
license
distributed
with
certain product
or service or otherwise
on afor
password-protected
product
or service
or aotherwise
on a password-protected
website
classroom use. website for classroom use.
1
Learning Objectives
 1. Discuss the basis for intentional
and negligent tort liability.
 2. List and explain the generally
recognized business torts.
 3. Explain what business crimes are.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
2
Learning Objectives
 4. Describe what computer crimes
are and the three types that affect
businesses.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
3
3-1 Torts
 A tort is a private civil wrong or
injury by a ‘tortfeasor’ for which
the law provides damages.
 A tort may be intentional or
unintentional (negligence).
•
Negligence is the failure to exercise
reasonable care.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
4
3-1 Torts
 3-1a Intentional Torts
•
To recover for an intentional tort, the
injured person must show three things:



An act by the defendant.
An intention to cause the consequences of
the act.
Causation—the injury was caused by the
defendant’s act or something set in motion
by the act.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
5
3-1 Torts
 3-1a Intentional Torts
•
Intentional torts include:

Assault

Battery

Trespass

False imprisonment
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6
3-1 Torts
 3-1b Negligence Torts
•
To recover for a negligence tort, the
injured party must show all of these
elements:




Duty of tortfeasor to the injured party
Breach of that duty
Breach was the actual and a proximate
cause of the injury
Actual damage or injury
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
7
3-1 Torts
 3-1b Negligence Torts
•
•
•
Injury must be foreseeable (proximate
cause)
Negligence on the part of the injured party is
called contributory negligence, which
completely bars recovery
In other states, comparative negligence is
when the parties share fault and damages
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
8
3-1 Torts
 3-1c Business Torts
•
•
Product Liability: manufacturers, dealers,
suppliers, and rental companies can be
sued based on negligence or strict
liability.
Negligence: manufacturers and suppliers
are liable for use or condition of the
product, design defect, or failure to warn.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
9
3-1 Torts
 3-1c Business Torts
•
Strict Liability: any business in the
product chain (manufacturer, wholesaler,
or retailer) can be liable without fault if
the product is defective and dangerous to
consumer.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
10
3-1 Torts
 3-1d Interference with a Contract
or Economic Advantage
•
Occurs when a business relationship has
been formed, and a third party causes a
breach of that business relationship.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
11
3-1 Torts
 3-1e Confusion About a Product
•
•
Injurious falsehood (also called
commercial disparagement or trade
libel).
Confusion of source.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
12
3-1 Torts
 3-1e Confusion About a Product.
•
Trademarks: words, symbols, or devices
used to distinguish one’s goods from
another’s.


Includes only those marks used by a
business that distinctively differentiate it
from others.
An non-distinct mark may acquire
secondary meaning through common use
and become a trademark.
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
13
3-1 Torts
 3-1e Confusion About a Product.
•
Trademark Infringement
Factors:








Similarity of the marks
Similarity of products
Similarity of marketing and customers
Similarity and amount of advertising
Area of overlapping use
Intent of parties in adopting the marks
Strength of the marks
Actual confusion by the public
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
14
3-1 Torts
 3-1e Confusion About a Product.
•
Trademark dilution occurs when the capacity
of a famous mark to identify and distinguish
goods or services is reduced.

•
Anticybersquatting Consumer Protection Act
Unfair Competition
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
15
3-2 Business Crimes
 3-2a Types of Business Crimes.
•
•
•
Theft: shoplifting, embezzlement, larceny
RICO cases
(The Racketeering Influenced and
Corrupt Organizations (RICO) Act of
1970)
Computer crimes. Committed with aid of a
computer
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
16
3-2 Business Crimes
 3-2a Types of Business Crimes
•
Computer crimes. Computers can:

be objects of the crime

the method of committing the crime


represent where the crime is committed, such
as infringement on the Internet
Electronic Communications Privacy Act
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
17
3-2 Business Crimes
 3-2a Types of Business Crimes
•

Trespass: unauthorized use of or
access to a computer. Can involve
hackers or rogue programs (viruses,
bacteria, worms, Trojan Horses, time
bombs)
Computer Fraud and Abuse Act
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
18
3-2 Business Crimes
 3-2a Types of Business Crimes
•
Criminal Copyright Infringement. To
establish, a prosecutor must prove:



Copyright infringement occurred
Infringement was willful
Infringement was for financial gain
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
19
3-2 Business Crimes
3-2a Types of Business Crimes

Privacy and Data Security Laws
- Businesses must collect and store customer data in
a secure manner.
- No single, overarching privacy law in the U.S.;
there are many laws that govern privacy in
different industries.

Children's Online Privacy Protection Act (COPPA)
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
20
3-2 Business Crimes
 3-2a Types of Business Crimes
•
Foreign Corrupt Practices Act. Applies to
any US person or business who bribes a
foreign official and to any foreign
business which acts in furtherance of such
bribe.


Bribes
Consequences: Fines, Debarment,
Imprisonment
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
© permitted
2014 Cengage
Learning.
All Rightswith
Reserved.
May
not be or
copied,
scanned,
or duplicated,
in whole or in part,website
except for use
as permitted
in a license
distributed
a certain
product
service
or otherwise
on a password-protected
classroom
use. in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
21