OBE 118 - LEGAL
ENVIRONMENT OF
BUSINESS
INTRODUCTION TO
TORTS
“That great principal of the common law
which declares that it is your duty to use
and exercise your own rights so as not to
cause injury to other people.”
Sir Charles James Watkin Williams, English jurist
DEFINITION OF A TORT
An interference with another’s person or property
resulting in injury to the person or their property
 Torts differ from crimes and contract
breaches, but……have much in common with
crimes.
 Primary distinction is in the interest affected &
how an actor is held accountable.
TORT compared to a crime
Protects private Protects state
interests
interests
Private victim
Public
recovery usually punishment
$
Civil procedure Criminal
procedure
DEFINITION OF A TORT (CONTINUED)
 THE SAME ACT CAN BE BOTH A TORT AND A
CRIMINAL ACT.
Are Most Crimes Torts? Are Most Torts Crimes?
 A TORT ACT MAY ALSO HAVE CONTRACT
CONSEQUENCES.
Torts Are Classified By The Nature Of The
Actor’s Conduct.
 Intentional
 Unintentional
 Negligence
 Absolute Liability Or Strict Liability
DAMAGES
Compensatory damages
•A sum of money awarded to compensate the
plaintiff for the injury suffered – purpose is to
restore the injured person (as nearly as possible)
to his or her former position or the money
equivalent.
•Consists of special and general damages.
SPECIAL (ECONOMIC DAMAGE) - OUT OF
POCKET LOSS
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Objectively verifiable monetary losses
including
SPECIAL (ECONOMIC DAMAGE) - OUT OF
POCKET LOSS
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Medical expenses,
Loss of earnings
Hospital
Doctor
Damaged property
Transportation charges
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Loss of use of property
Costs of repair or
replacement
Cost of obtaining
substitute domestic
services
Loss of business or
employment
opportunities
DAMAGES (CONTINUED)
 General (non-economic damages) pain and
suffering, humiliation.
Subjective, losses including pain, suffering,
inconvenience, mental suffering, emotional
distress, loss of society and companionship,
loss of consortium, injury to reputation and
humiliation.
DAMAGES AND TORT REFORM
(a) In any action for injury against a health
care provider based on professional
negligence, the injured plaintiff shall be
entitled to recover non-economic losses to
compensate for pain, suffering,
inconvenience, physical impairment,
disfigurement and other non-pecuniary
damage.
DAMAGES AND TORT REFORM
(b) In no action shall the amount of
damages for non-economic losses
exceed two hundred fifty thousand
dollars ($250,000).
West's Ann.Cal.Civ.Code § 3333.
PUNITIVE OR EXEMPLARY DAMAGES
 Purpose is to punish
"Punitive damages are
& make an example
damages awarded over
of the actor to
and above
discourage similar
behavior
compensatory damages
to punish a wrongful
party because of
wanton, reckless or
malicious acts or
omissions."
PUNITIVE OR EXEMPLARY DAMAGES
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Conduct suggesting
an award of punitive
damages
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Violence
Oppression
Degradation
Fraud
Wicked
Malice
“Reckless
indifference"
PUNITIVE OR EXEMPLARY
DAMAGES
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Some states provide
procedural barriers to
recovery
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Burden of proof
Professional
agreements to sue
Sharing of award
Punitive Damage Issues
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Intentional acts? Ordinary negligence?
Contract actions?
Appellate Courts?
Statutory limits?
Insurable?
Vicarious liability? Insurable?
LOW FREQUENCY/HIGH SEVERITY: Punitive
damage verdicts are rare, but can be extremely
large. Juries often are allowed to assess
damages subjectively, creating unpredictable
verdicts.
DAMAGES AND TORT REFORM
“While punitive damages are awarded in
less than 4 percent of all civil jury verdicts,
there is a 1-in-7 chance of a punitive award
in disputes arising from contractual or
commercial relationships, including, for
example, disputes stemming from insurance
or employment contracts or from unfair
business practices.”
From The Rand Institute
DAMAGE ISSUES
 Judgment
proof means a judgment debtor
lacks sufficient assets to satisfy a
judgment.
DAMAGE ISSUES
• Bankruptcy allows the discharge of damage
verdicts against defendants except for willful
and malicious injury to the person or property
of another.
INTENTIONAL TORTS
A person intends an act which will invade
another’s interest and either knows or should
know (substantially certain) that there is an
appreciable risk to another from the act
INTENTIONAL TORTS
•One intends something when an act is
done and the result is substantially certain
or when the result is uncertain the result
is desired by the actor.
INTENTIONAL TORTS
•An evil or harmful motive is not required to be
an intentional tort--the actor may even have
intend a benefit
DEFAMATION
Invasion of the interest reputation.
“A false unprivileged statement of fact
communicated to a third person, causing
damage to a person’s or a product’s
reputation.”
DEFAMATION
Libel a writing, printing, picture, effigy,
or other fixed representation to the eye.
DEFAMATION
Slander oral statements and gestures.
Radio and other mechanical
communications are slander in
California. Many other states consider
them libel.
DEFAMATION REQUIREMENTS (Elements)
 Publication - communicated to a third person.
 Statement about a particular person.
 Defamatory character
 Damages
• Intent to make the statement sufficient for most actions but
Malice required when plaintiff is a public figure.
DEFAMATION REQUIREMENTS (Elements)
 PUBLICATION - Communicated to a third person.
DEFAMATION REQUIREMENTS (Elements)
Statement about a particular person.
DEFAMATION REQUIREMENTS (Elements)

Defamatory character
DEFAMATION REQUIREMENTS (Elements)
Damages
DEFENSES TO DEFAMATION
 Truth
is an absolute defense.
 Absolute privilege may exist
Qualified privilege may exist
DEFENSES TO DEFAMATION
 Absolute privilege may exist
Statements of judges, attorneys, parties, etc. Made in
a judicial proceeding.
Statements by legislators during legislative
proceedings.
Qualified Privileges
 Conditional
or qualified privilege -freedom
from malice makes these statements privileged.
Ex: response to a request for information where
the inquiry is reasonable. California cc 47(3).
CALIFORNIA QUALIFIED PRIVILEGE DEFENSE TO
DEFAMATION
 Civil Code §47(c), so long as the prospective employer
requests the information from the former employer, and
the former employer acts without malice, the
communication is privileged, and the former employee
cannot later recover from the former employer under a
defamation theory.
 The privilege does not insulate employers from all liability
arising from employment disclosures, especially where
new employers and third parties seek recovery for injuries
caused by negligent omissions or fraudulent disclosures.
Qualified Privileges
 Constitutional qualified privilege
 Right to comment about public officials, & public
figures.
RETRACTION RIGHT
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Plaintiff must give notice within 20 days after
publish or broadcast has made defamatory
statement.
Retraction is not a defense but it can limit
damages. CC48a.
Cal Civil Code 48a. 1. In any action for damages for
the publication of a libel in a newspaper, or of a
slander by radio broadcast, plaintiff shall recover no
more than special damages unless a correction be
demanded and be not published or broadcast, as
hereinafter provided. Plaintiff shall serve upon the
publisher, at the place of publication or broadcaster
at the place of broadcast, a written notice specifying
the statements claimed to be libelous and demanding
that the same be corrected. Said notice and demand
must be served within 20 days after knowledge of
the publication or broadcast of the statements
claimed to be libelous.
No matter how often a lie is
shown to be false, there
will remain a percentage
of people who
believe it is true.
FALSE IMPRISONMENT
The unprivileged, unconsented confinement of
another within boundaries of the wrongdoer’s
making.
 Confinement can be through threat or
physical barriers.
FALSE IMPRISONMENT
It did not seem like such a bad idea a few minutes ago.
All Fred asked Rhonda was that she climb in the trunk to
see how roomy it was in her new car. When he slammed
the trunk lid and left her there while he gathered the sales
manager and the other salesman Rhonda’s view of this
adventure changed. She was released to the laughter of
the group and Fred claimed his $100 prize from the sales
manager for talking a customer into the trunk of her car.
Does she have a claim for false imprisonment?
SHOPKEEPERS PRIVILEGE STATUTE
Allow shopkeeper to detain to investigate possible
shoplifting without liability for a reasonable mistake
Protection from legal responsibility for the torts of
false imprisonment, assault, battery, emotional
distress defamation, etc.
SHOPKEEPERS PRIVILEGE STATUTE
Privilege usually requires both probable cause and
reasonable behavior.
Probable cause exists when there is reasonable belief
that a person has committed a wrongful act.
Detention must be done in a reasonable manner & for a
reasonable time
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
Extreme or outrageous behavior resulting in
severe emotional distress to another.
 Harsh words alone are not enough
A very complicated tort.
An emotional assault. Must exceed bounds of
normal behavior. Some states require that the mental
disturbance manifest itself as a physical illness.
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
Old English case - (1897). Joker told a
woman that her husband injured in an accident
and was lying at elm street with both legs
broken.
INVASION OF PRIVACY
Unreasonable interference with another’s privacy.
Most persons have a reasonable right to solitude and
freedom from public prying.
Several acts qualify as an invasion of privacy:
Intrusion on an individual’s affairs or seclusion.
Includes wiretapping, invading a person’s home to
search it, and window peeping.
INVASION OF PRIVACY
Public disclosure of private facts
disclosure is offensive to a reasonable person.
Disclosure is not of legitimate concern to the
public.
EXTRA: SCANDAL IN
PROFESSOR
CARPER’S CLASS.
Two students found
awake after 45 minutes
of lecture.
APPROPRIATION
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Use of a person’s name or picture for
commercial purposes without permission
Often treated as a form of invasion of privacy
We each have a property right in the use of
our own name
Note the Bette Midler case
CONTRACT INTERFERENCE REQUIREMENTS
Existence of a valid enforceable contract
Third party awareness of the contracts existence
The third party intentionally causes one of the
parties to breach the contract for the purpose of the
third parties economic gain.
CONTRACT INTERFERENCE
Texaco v. Pennzoil 7.53+3 billion punitive=10.53B
Texaco & the Ten Billion Dollar Jury
by James Shannon
ASSAULT
An intentional, unexcused act that creates in the
mind of another person a reasonable
apprehension or fear of an immediate harmful or
offensive touching.
EXAMPLE: Ferd throws a bucket of oil at Cantwell.
If Cantwell sees the oil or bucket coming, it is assault.
BATTERY:
An intentional unprivileged un-permitted
harmful or offensive contact by another.
EXAMPLE: Ferd throws a snowball at Cantwell
and it hits Cantwell
COMMON DEFENSES TO INTENTIONAL TORTS
Consent: permission freely given or reasonably
implied. Did the act exceed the permission or
consent?
COMMON DEFENSES TO INTENTIONAL TORTS
PRIVILEGE: A right to engage in certain behavior
arising from relationship or circumstance.
DEFENSES -PRIVILEGE-
Conflicting and overlapping meanings
An advantage; a right to preferential treatment
An exemption from a duty others like you must
perform
DEFENSES -PRIVILEGE
 Self defense - right to use force which
reasonably appears necessary for protection of
ones self.
 Apparent necessity
 Reasonable force
 Defense of others - right to assist others if
they would have had the right to defend
themselves.
DEFENSES -PRIVILEGE
 Recapture of chattels - right of one in fresh
pursuit of goods wrongfully taken to use
reasonable force to retake. Force that is likely
to cause death or great bodily injury can never
be used just to protect property.
DEFENSES (CONTINUED)
 DEFENSE OF PROPERTY. Reasonable force
may be used in attempting to remove intruders from
one’s home, although force that is likely to cause
death or great bodily injury is not justified in defense
of property.
 SOCIAL PRIVILEGE - Right to engage in normal
social behavior.
DEFENSES (CONTINUED)
 SHOPKEEPERS PRIVILEGE. “May detain
person for a reasonable for a period in reasonable
manner, of probable cause exists that a theft has
occurred.”
 STATUTE OF LIMITATIONS
•NEGLIGENCE - One year from injury