West's Legal Environment of Business 6th Ed.

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Chapter 8
Tort Law
Introduction
o An injury can involve both civil (tort)
and criminal liability.
o In a civil action, the plaintiff hires her
own lawyer.
o In a criminal action, the state
prosecutes the injury to the
community.
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Basis of Tort Law
o Doing business today involves risks,
both legal and financial.
o A tort is a civil injury designed to
provide compensation for injury to a
legally protected, tangible or
intangible, interest.
o There are intentional and
unintentional (negligence) torts.
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Types of Torts
o Intentional torts – arise from an act defendant
consciously performs; key is the intent to perform the
act and not necessarily the intent to do harm (e.g.,
shooting gun into the air), though proof of intent to
cause harm is the best way to prove an intentional
tort.
o Negligence – no intent required; act (or
omission) creates risk of harm; accident, careless,
mistake, misjudgment.
o Strict liability – liability without fault; traditionally,
harm caused by ultrahazardous activity or
consumption of drugs/food/beverages; theory
extended to product liability starting in the mid-20th
Century.
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Causation & Damage Required for All Torts
o Causation
o The “bridge” between the defendant’s bad act
and injury/damages suffered by the plaintiff.
o Requires a reasonable relationship between
defendant’s bad act and plaintiff’s damage.
o Damage
o Also called “injury” or “loss.”
o Tort law is based on compensation for a loss that
can somehow be measured in money.
o If no damage, then no compensation is
necessary and the defendant will win.
o “Damage” includes any kind of measurable
financial loss; e.g., physical injury, loss of business,
emotional distress.
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Intentional Torts Against Persons
o The person committing the tort, the
Tortfeasor or Defendant, must
“intend” to commit the act. Intend
means:
o Tortfeasor intended the consequences
of her act; or
o She knew with substantial certainty
that certain consequences would
result.
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Types of Intentional Torts
o
o
o
o
o
o
Assault and Battery.
False Imprisonment.
Infliction of Emotional Distriess.
Defamation.
Invasion of Privacy.
Business Torts.
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Assault and Battery
o ASSAULT is an intentional, unexcused act
that:
o Creates a reasonable apprehension of fear, or
o Immediate harmful or offensive contact.
o NO CONTACT NECESSARY.
o BATTERY is the completion of the Assault:
o Intentional or Unexcused.
o Harmful, Offensive or Unwelcome.
o Physical Contact.
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Defenses to Assault & Battery
o
o
o
o
Consent.
Self-Defense (reasonable force).
Defense of Others (reasonable force).
Defense of Property.
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False Imprisonment
o False Imprisonment is the intentional:
o Confinement or restraint.
o Of another person’s activities.
o Without justification.
o Merchants may reasonably detain
customers if there is probable cause.
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Intentional Infliction of Emotional Distress
o Intentional infliction of emotional
distress – “outrageous” conduct by
defendant causes plaintiff to suffer
severe emotional distress
o An intentional act that is:
o Extreme and outrageous, that
o Results in severe emotional distress in
another.
o Most courts require some physical
symptom or illness.
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Defamation
o Defamation – based on defendant’s
false statement of fact to 3rd party
causes damage to plaintiff; statement
can be spoken (slander) or written or
on the internet (libel).
o Right to free speech is constrained by
duty we owe each other to refrain
from making false statements.
o Orally breaching this duty is slander;
breaching it in print or media is libel.
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Defamation
o Gravamen of defamation is the
“publication” of a false statement that
holds an individual up to hatred,
contempt or ridicule in the
community.
o Publication requires communication
to a 3rd party.
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Damages for Libel
o General Damages are presumed;
Plaintiff does not have to show actual
injury.
o General damages include
compensation for disgrace, dishonor,
humiliation, injury to reputation and
emotional distress.
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Damages for Slander
o Rule: Plaintiff must prove “special
damages” (actual economic loss).
o Exceptions for Slander Per Se. No
proof of damages is necessary:
o Loathsome disease,
o Business improprieties,
o Serious crime,
o Woman is non-chaste.
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Defenses to Defamation
o Truth is generally an absolute
defense.
o Privileged (or Immune) Speech.
o Absolute: judicial & legislative
proceedings.
o Qualified: Employee Evaluations.
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Public Figures
o Public figures exercise substantial
governmental power or are otherwise
in the public limelight.
o To prevail, they must show “actual
malice”: statement was made with
either knowledge of falsity or reckless
disregard for the truth.
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Invasion of Privacy
o Invasion of privacy
o Appropriation.
o Intrusion into a person’s private life.
o Publication of Information that Places a
Person in False Light.
o Public Disclosure of Private Facts.
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Appropriation
o Use of another’s name, likeness or
other identifying characteristic for
commercial purposes without the
owner’s consent.
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Intentional Torts Against Property
o Trespass to land occurs when a
person, without permission:
o Physically enters onto, above or
below the surface of another’s land;
or
o Causes anything to enter onto the
land; or
o Remains, or permits anything to
remain, on the land.
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Trespass to Personal Property
o Trespass to personal property is the
Intentional interference with another’s use or
enjoyment of personal property without
consent or privilege.
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Torts Against Property
o Conversion: civil side of criminal theft.
o (includes embezzlement) – defendant
initially entrusted with plaintiff’s property
(e.g., car, money) for a certain purpose
but defendant then converts property to
own use (e.g., unpermitted use of car,
spending money on personal matters).
o Disparagement of Property.
o Slander of Quality (trade libel).
o Slander of Title (ownership).
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Fraudulent Misrepresentation
o Fraud (also called misrepresentation or
deceit) – defendant’s false statement of fact
made with knowledge of falsity and intent to
deceive plaintiff; plaintiff’s reasonable
reliance on this statement causes damage
to plaintiff.
o Elements:
o
o
o
o
o
Misrepresentation of material fact;
Intent to induce another to rely;
Justifiable reliance by innocent party;
Damages as a result of reliance;
Causal connection.
o Fact vs. Opinion.
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Business Torts
o Wrongful interference with contractual or
business relationship/wrongful interference
with prospective economic advantage –
defendant’s wrongful act interferes with
relationship between plaintiff and 3rd party.
o Occurs when:
oDefendant knows about contract between A
and B;
oIntentionally induces either A or B to breach
the contract; and
oDefendant benefits from breach.
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Wrongful Interference
o With a Business Relationship occurs
when:
o Established business relationship;
o Tortfeasor, using predatory methods,
causes relationship to end; and
o Plaintiff suffers damages.
o Bona fide competitive behavior is a
defense to this tort.
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Damages in a Tort Case
o Compensatory - designed to compensate the victim for
all harm caused by the tortfeasor.
o Special damages – can be measured in exact terms; easiest to prove
since usually documentation and/or other clear way to show
nature/amount; e.g., medical bills re personal injury case, contract re
fraud case or to show loss of income.
o General damages – intangible “quality of life” damages, so harder to
prove with any precision; e.g., emotional distress or pain and suffering;
not available for Br/K but could be available for fraud based on
contract.
o Nominal damages – small amount of money to recognize
that a defendant committed a tort, but there were no
compensable damages suffered by the plaintiff
o Punitive damages – assessed as punishment in addition to
special and general damages; based on (1) defendant’s
oppression, fraud or malice (how “bad” was the
defendant?), and (2) defendant’s wealth (in order to truly
punish the defendant); not available for negligence or Br/K;
subject of much political debate re “tort reform” though
rarely awarded; recent U.S. Supreme Court case says there
should be a single-digit ratio between (1) amount of
punitive damages and (2) amount of general and special
damages.
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