Understanding Torts: A Comprehensive Guide to Civil Wrongs - Prof. Keith Swim, Study notes of Introduction to Business Management

Download Understanding Torts: A Comprehensive Guide to Civil Wrongs - Prof. Keith Swim and more Study notes Introduction to Business Management in PDF only on Docsity! Chapter 5 Torts 1. Torts a. Civil wrong other than a breach of contract for which the courts will provide a remedy in the form of damages to compensate the injured party. 2. Introduction to the law of torts i. Tort-wrong against a private party 1. Not intended to punish defendants but to compensate injured plaintiffs through a monetary reward. ii. Intentional tort- involves a deliberate action, which involves an injury. 1. Company makes false statements about quality of competitors product iii. Negligent tort (negligence)- unintentional tort that arises from the failure to use reasonable care towards one, to whom a duty is owed in which injury results. 1. Slip and fall in showrooms, defectively designed products iv. Strict Liability- liability without tort. 1. You do the acts that result in the harm 3. Purpose of the law of torts i. Provides a set of legal rules that allow parties injured as a result of actions of others to collect damages. b. Compensation and Appeasement i. Appeasement- purpose of the law is to limit the negative impact of the infliction of injury to the event of the injury itself. 1. Receipt of compensation 2. Knowledge of the fact that the transgressor is punished by being required to pay. c. Justice i. Ethical retribution-payment of compensation is harmful to the offender and that justice requires the offender to suffer from paying this. ii. Ethical Compensation- payment of compensation is a benefit to the victim of the wrong. d. Deterrence i. Tort law designed to alter the incentives of future conduct between parties to prevent (deter) incidents from occurring. ii. Two types of cost associated with accidents 1. Cost of preventing accidents 2. Cost of accidental injuries e. Social Insurance i. Party who is in best position to spread the loss of the injury should be held liable. ii. Deep pocket theory- business has greater wealth therefore they must pay to the injured consumer 4. Damages a. Compensatory damages- Damages awarded are to make the plaintiff whole again i. Medical ii. Economic iii. Future pain and suffering b. Punitive damages- awards designed to punish individual defendants. i. Awarded for intentional torts and negligence cases 5. How businesses are involved in tort a. Involvement i. Due to actions of its employees ii. Own actions against another business iii. Due to it’s products b. Reasonable person standard i. Court takes into question what a reasonable person would do in a given situation and base a decision off of that choice. 6. Intentional torts in a business setting a. Harm doesn’t have to happen, just injury flowing from intentional act. i. Pulling chair out and breaking fat womans pelvis example. b. Personal intentional torts i. Assault and Battery 1. Assault-intentional action that places a person in fear or apprehension of immediate bodily harm or offensive contact a. Can be threat, would a normal person be scared of the event happening. b. Victim must know of intentional act c. Business can become involved (security guard harassing customer) 2. Battery- intentional act of physical contact or offensive touching of someone else w/o his/her permission. a. Person hits another in an offensive manner b. Person shoots another person c. Person commands dog to attack someone d. Throw a rock and hit someone e. All you have to do is unlawfully or offensively touch someone w/o their permission 3. Defenses to assault and battery a. Defense-legal justification to commit what otherwise would be a tort i. Consent- expressed or implied (sporting events) ii. Tortfeasor- one committing the tort-(if they go beyond level of consent the tort will then occur) iii. Privilege-allows the individual to commit the tort due to who he/she is, when acting w/in scope of official capacity. 1. Police men, gov officials iv. Self-defense- defend yourself as well as others 1. Deadly force can be used if first used against you. 2. Cannot use deadly force in protection of property ii. False Imprisonment 1. Defined as intentionally causing the confinement of another person w/o consent or legal reason. 2. Physically restraining an individual 3. Using threatening force to restrain 4. Using force or threat of force against property to restrain them 5. Refusing to release a person from confinement when there is duty to release iii. Intentional Infliction of Mental distress 1. Defined as the intentional or reckless causing of severe mental suffering in another by means of extreme conduct or language. a. Outrageous or extreme conduct by defendant b. Which causes emotional and mental distress to plaintiff c. Manifested by some form of physical injury to plaintiff (heart attack, mental breakdown etc.) iv. Invasion of Privacy 1. Persons name or likeness is used for business purposes w/o consent 2. Invasion upon individuals physical solitude (illegally gaining info from breaking into a home/wire tap) 3. Public disclosure about a person which is offensive and objectionable. (true fact) 4. Public disclosure about a person which places them in false light. (false facts=defamation) a. Exceptions to the rule i. Unwarranted is not Unwanted ii. If something is taken from public records its fair game iii. Public figures give up some but not all rights of privacy v. Defamation 1. Defined as publication of a false statement that tends to injure a person’s reputation and good name. 2. Includes Libel and Slander a. Libel- defamation through some permanent form, in print or recording b. Slander-defamation through oral means, speech 3. FOR THIS TO OCCUR STATEMENTS MUST BE FALSE AND THE ACCUSER MUST KNOW ITS FALSE WHEN STATING IT. 4. Third party must hear the defamation for it to cause harm and be considered defamation 5. Defenses to defamation a. Truth and privilege are defenses i. If somethings true its not defamation b. Privilege- ability to publish some defamatory statements furthers certain social interests. i. Absolute privilege- applies in situations where freedom of speech is required 1. Protects statements in civil/criminal action ii. Constitutional privilege- statements made by federal and state legislators and high ranking officials in performing their duties (also absolute privilege) vi. Malicious Prosecution 1. The wrong use of the legal proceedings, civil or criminal 2. Must win all cases brought against you then proceed to prove that the defendant’s claims against you were invalid and he knew so before accusing you. h. Federal Trademark Dilution act i. Allows trademark owners to sue non-competitors for blurring and tarnishing 1. Blurring- using a famous name for a completely unrelated product (Xerox diapers) 2. Tarnishing- using a word or phrase to create a negative connotation to a well known trademark (coca cola, cocaine, santa clause example) i. Trademark law and the internet i. Cypersquatters were registering domains with big corps names and demanding high payment for the use of these domains. HIGHLY ILLEGAL! j. Trade Dress i. Stealing entire inherent distinctive look of a competitor 1. Taco Cabana Two Pesos Mexican restaurants example. Look the same, similar food, minimal differences in restaurants Two pesos sued. 6. Trade Names a. Apply to a part or all of a business name i. No federal protection for trade names, protection only local in nature 7. Trade Secrets a. Anything that the business wants to keep secret i. Formulas, customer lists, price lists, research, etc that if known, would give competitor an advantage over you in market b. Uniform trade secrets Act i. Owner of trade secret can sue for misappropriation against anyone who obtains trade secret unlawfully. ii. If competitor obtains secret independently then its legal 7. Negligence a. Deals with careless or reckless conduct rather than intentional conduct like discussed in intentional torts i. DEF-failure to exercise due care when there is a foreseeable risk to others 1. Elements a. Defendant has a duty to plaintiff (contract) i. Whenever a person should foresee that his conduct will create unreasonable risk of harm to others b. Defendant fails to perform duty (contract breach) i. “reasonable person of ordinary prudence”- failure to do what the ordinarily prudent person would do under similar circumstances ii. Avoidance cost lower than expected accident cost then reasonable person would be negligible. c. Plaintiff has loss/damages i. Physical, mental, emotional harm all warrant negligence ii. If no harm is done then all negligence is thrown out d. Defendants conduct results in the damages to plaintiff (causation) i. Most basic element of negligence 1. Cause in fact- established by evidence showing that the complained-of act is the cause of the event that caused the injury a. Ex: row of dominos- first one is toppled causing all to fall. Because the first thing happened all the rest followed suit. 2. Proximate Cause- judicial limitation of cause in fact a. Responsibility for ones actions limited to consequences that bear a reasonable relationship to the conduct (FIREWORKS TRAIN EXAMPLE PG 169). b. Defense to Negligence i. Two principal defenses are assumption of risk by plaintiff and plaintiff’s own negligence ii. Influencing the potential plaintiff’s behavior 1. Could the plaintiff have avoided the injury at a lower cost than the defendant could? a. If so the plaintiff would have been acting as a reasonable person and there would b no negligence iii. Assumption of Risk 1. Voluntary exposure to a known risk a. Electric Drill Example (pg 171) b. You know that one drill is cheaper but not meant to drill in concrete and you need to drill in concrete and you go ahead and buy cheaper drill, you (plaintiff) assume all risk that may occur when drilling through the concrete c. A person can only assume KNOWN RISKS iv. Contributory and Comparative Negligence 1. Contributory negligence- failure of the plaintiff to exercise reasonable risk causing the injury (defendant is protected) a. Provides an incentive for plaintiff to take care when both parties are at a potential loss 2. Comparative negligence- allows a portion of the damages resulting from combined negligence of the parties a. Plaintiff injured due to his own negligence as well as defendant negligence and its 40% plaintiffs negligence 60% defendants negligence, defendant pays 60% of damages to plaintiff. 3. Moral Hazard- under a simple negligence standard those at risk don’t have incentive to take self-protective or loss-avoidance measures. v. Superseding Cause 1. Something occurs that breaks the causal connection required to have negligence. 2. AKA Something interferes with the causal relationship that would cause the negligence a. Dominos falling over, boy steps in and nocks over a closer one to the end causing the rest to fall over. b. Earthquake occurs at same time fireworks box fell causing the scale on deck to fall on woman. vi. Strict liability in Tort 1. Liability w/o fault 2. Usually involving abnormal or hazardous activities 8. CHAPTER SUMMARY a. Law of torts concerns the legal rights and duties of parties to involuntary transactions that have resulted in injury to a party b. Efficiency perspective concentrates on the use of tort law to alter incentive structures so minimal amount of resources devoted to accidents c. Intentional tort is intentional invasion of some legally protection interest i. Ex: intentional mental distress, invasion of privacy, defamation, assault, battery d. Nuisance law provides a means for enforcing the right to exclusive use and enjoyment of real property e. Intellectual property rights-when someone uses the intellectual property of another, the innocent party can bring infringement suit against them i. Ex: copyrights, trademarks, trade secrets etc. f. Negligence law deals with accidents which are unintentional torts i. Elements are: Duty, breach of duty, injury, causation 1. Person who can avoid injury at the least cost is liable for damages ii. Defenses of Negligence 1. Assumption of risk, contributory negligence, comparative negligence g. Strict Liability- liability w/o fault applies to activities that are recognized as hazardous but are not so risky as to justify a prohibition. i. Modern standard for holding manufacturers liable for defective products.