Business Law I - BA 230 - Chapter 6 - Torts

Classification of Torts

1. Intentional Torts 2. Unintentional Torts (involving negligence)

Tort Reform (Three Measures the Federal and/or State Government can do to Reduce the Number of Tort Cases)

1. Limiting the amount of both punitive damages and general damages that can be awarded. 2. Capping the amount that attorneys can collect in contingency fees (attorneys' fees that are based on a percentage of the damages awarded to the client) 3. Requiring the losing party to pay both the plaintiff's and the defendant's expenses.

Class Action Lawsuit

A lawsuit in which a large number of plaintidds bring the suit as a group.

Defense to Wrongful Interference

A person will not be liable for the tort of wrongful interference with a contractual or business relationship if it can be shown that the interference was justified, or permissible.

Assumption of Risk

A plaintiff who voluntarily enters into a risky situation, knowing the risk involved, will not be allowed to recover. Requires: 1. Knowledge of the risk 2. Voluntary assumption of the risk

Contributory Negligence

A plaintiff who was also negligent could not recover anything from the defendant. *Doctrine is only held in a few jurisdictions. Replaced by Comparative Negligence.

Actual Malice

A statement must be made with either knowledge of its falsity or a reckless disregard for the truth.

Superceding Cause

A unforseeable intervening event mey break the causal connection between a wrongful act and an injury to another.

Gross Negligence

An intentional failure to perform a manifest duty in reckless disregard of the consequences of such a failure for the life or property of another.

Comparative Negligence

Both the plaintiff's and the defendant's negligence are computed, and the liability for damages is distributed accordingly.

Wrongful Interference with a Business Relationship

Business Tort Prohibition from unreasonably interfering with another's business in their attempts to gain a greater share of the market.

Actionable

Capable of serving as the ground for a lawsuit.

Defenses of Negligence

Claimed by asserting that the plaintiffs have failed to prove the existence of one or more of the required elements for negligence. Additionally, there are three basic affirmative defenses in negligence cases (defenses that a defendant can use to avoid liability even if the facts are as the plaintiff states): 1. Assumption of Risk 2. Superseding Cause 3. Contributory and Comparative Negligence

Compensatory Damages

Compensate or reinburse the plaintiff for actual losses. Broken down into: -General damages: compensate individuals (not companies) for the nonmonetary aspects of the harm suffered. -Special damages: compensate the plaintiff for quantifiable monetary losses. -Punitive Damages (below)

Causation

Courts ask two questions: 1. Is there causation in fact? Causation in fact usually can be determined by use of the but for test: "but for" the wrongful act, the injury would not have occured. 2. Was the act the proximate, or legal, cause? Proximate cause, or legal cause, exists when the connection between an act and an injury is strong enough to justify imposing liability.

Libel (Tort)

Defamation towards a person in writing or other permanent form. Damages for libel: Once a defendant's liability for libel is established, general damages are presumed as a matter of law. To recover damages, the plaintiff need not prove that he or she was actually harmed in any specific way as a result.

Slander (Tort)

Defamation towards a person orally. Damages for Slander: Unlike libel, the plaintiff must prove special damages to establish the defendant's liability.The plaintiff must show that the slanderous statement caused her or him to suffer actual economic or monetary losses.

Defense of Torts

Defendant can raise a number of legally recognized defenses depending on the specific tort involved. Common Defenses: -Consent -Comparative Negligence

Malpractice

Essentially professional negligence. If a professional violates his or her duty of care toward a client, the client may bring a suit against the professional.

The Injury Requirement and Damages

For a tort to have been committed, the plaintiff must have suffered a legally recognizable injury.To recover damages (receive compensation), the plaintiff must have suffered some loss, harm , wrong, or invasion of a protected interest.

Business Torts

Generally involve wrongful interference with another's business rights. Fall into two categories: 1. Interference with a contractual relationship 2. Interference with a business relationship

Defense of Defamation

If the statement is true, that is a defense in and of itself. Only a false statement that cripples someone's reputation.

Privileged Communications

In some cercumstances, a person will not be liable for defamatory statements because she or he enjoys a privilege, or immunity. There are two types: 1. Absolute: only granted in judicial proceedings and certain government proceedings (Example: government officials during legislative debate, attorney or judges' statements during trial). 2. Qualified: A person will not be liable for defamatory statements (Example: an employer's statements in written evaluations of employees).

Intentional Torts Against Property

Include: 1. Trespass to land 2. Trespass to personal property 3. Conversion 4. Disparagement of property The law distinguishes real property from personal property. Real Property: Land and things permanently attached to the land (such as buildings or homes). Personal Property:All other items (cash and securities).

Transferred Intent

Intent can be transferred when a defendant intends to harm one individual, but unintentionally harms a second person.

Battery

Intentional Tort Against Persons An unexcused and harmful or offensive physical contact intentionally performed.

Assault

Intentional Tort Against Persons Intentional and unexcused threat of immediate harmful or offensive contact - words or acts that create a reasonably believable threat.

The Duty of Landowners

Landowners are expected to exercise reasonable care to protect individuals coming onto their property from harm.

Negligence Per Se

May occur if an individual violates a statute or an orginance providing for a criminal penalty and that violation causes another to be injured.

Unintentional Torts (Negligence)

Occurs when someone suffers because of another's failure to live up to a required duty of care. The tortfeasor neither wishes to bring about the consequences of the act nor believes that they will occur. If no risk is created, there is no negligence. To suceed in a negligence action, the plaintiff must prove each of the following: 1. Duty. The defendent owed a duty of care to the plaintiff. 2. Breach. The defendant breached that duty. 3. Causation. The defendant's breach caused the plaintiff's injury. 4. Damages. The plaintiff suffered a legally recognizable injury.

Foreseeable Risk

One in which the reasonable person would anticipate and guard against it.

Duty of Care

People are free to act as they please so long as their actions fo not infringe on the interests of others.

Public Figures

Politicians, entertainers, professional athletes, and others in the public eye are considered public figures. In general, they are considered "fair game." False and defamatory statements about public figures that are published in the media will not consitute defamation unless the statements are made with actual malice.

Punitive Damages

Punishes the wrongdoer and deters others from similar wrongdoing. Only appropriate when defendant's conduct is particularly reprehensible. -Basically violates due process requirements.

Slader Per Se

Special case where plaintiff does not need to provide proof of slander if it is one of the following: 1. A statement that another has a particular type of disease (such as a sexually transmitted disease or mental illness). 2. A statement that another has committed improprieties while engaging in a profession or trade. 3. A statement that another has committed or has been imprisoned for a serious crime. 4. A statement that a person (usually only unmarried persons and sometimes only women) is unchaste or has engaged in serious sexual misconduct.

State Tort Reforms

States have placed caps on noneconomic general damages (like pain and suffering), especially in medical malpractice suits.

Federal Tort Reforms

The Class Action Fairness Act (CAFA) of 2005 shifted jurisdiction over large interstate tort and product liability class-action lawsuits from the state courts to the federal courts. It prevents plaintiffs' attorneys from forum shopping (looking for a state court known to be sympathetic to their clients' cause).

Tortfeasor

The person commiting the tort.

Slander of Quality

The publication of false information about another's product, alleging that it is not what its seller claims. Can turn into Trade Libel, in which the plaintiff must prove that the proper publication caused a third person to refrain from dealing weith the plaintiff and that the plaintiff sustained economic damages (such as lost profits) as a result.

The Reasonable Person Standard

Tort law measures duty by this. In determining whether a duty of care has been breached, the courts ask how a reasnable person would have acted in the same circumstances.

Slander or Title

When a publication falsely denies or casts doubt on another's legal ownership of property, resulting in financial loss to the property's owner.

Tort

Wrongs and compensation. Tort law is designed to compensate those who have suffered a loss or injury due to another person's wrongful act. In tort action, one person or group brings a lawsuit against another person or group to obtain compensation (monetary damages) or other relief for the harm suffered. -Provides remedies for acts that cause physical injury or that interfere with physical security and freedom of movement.

Examples of General Damages

-Emotional or physical pain and suffering -Loss of companionship -Loss of consortium (losing the emotional and physical benefits of a spousal relationship) -Disfigurement -Loss of reputation -Loss or impairment of mental or physical capacity

Examples of Special Damages

-Medical expenses -Lost wages/benefits [now and in the future] -Extra costs -The loss of irreplaceable items -The costs of repairing or replacing damaged property.

Abusive or Fivolous Litigation

Intentional Tort Against Persons The filing of a lawsuit without legitimate grounds and with malice. Alternatively, the use of a legal process in an improper manner.

Wrongful Interference with a Contractual Relationship

Business Tort Three elements are necessary: 1. A valid, enforceable contract must exist between two parties. 2. A third party must known that this contract exists. 3. This third party must intentionally induce a party to the contract to breach the contract.

Defamation

Intentional Tort Against Persons Defamation of character involves wrongfully hurting a person's good reputation.The law imposes a general duty on all persons to refrain from making false, defamatory statements of fact about others. Also arises when a false statement of fact is made about a person's product, business, or legal ownership rights to a property. To establish defamation, a plaintiff normally must prove the following: 1. The defendant made a false statement of fact (statements of opinion cannot count as defamation). 2. The statement was understood as being about the plaintiff and tended to harm the plaintiff's reputation. 3. The statement was published to at least one person other than the plaintiff. 4. If the plaintiff is a public figure, she or he must prove actual malice.

Fraudulent Misrepresentation

Intentional Tort Against Persons Intentional deceit for personal gain. Includes several elements: 1. A misrepresentation of material facts or conditions with knowledge that they are false or with reckless disregard for the truth. 2. An intent to induce another party to rely on the misrepresentation. 3. A justifiable reliance on the misrepresentation by the deceived party. 4. Damages suffered as a result of that reliance. 5. A causal connection between the misrepresentation and the injury suffered. For fraud to occur, more than mere puffery (or seller's talk) must be involved.

Intentional Infliction of Emotional Distress

Intentional Tort Against Persons Involves an intentional act that amounts to extreme and outrageous conduct resulting in severe emotional distress to another. To be actionable, the act must be extreme and outrageous to the point that it exceeds the bounds of decency accepted by society.

Invasion of Privacy

Intentional Tort Against Persons The following four acts qualify as an invasion of privacy under the common law: 1. Intrusion into an individual's affairs or seclusion (someone's home or property without authorization). 2. False light (publication of informaiton that places a person in a false light). 3. Public disclosure of private facts (when a person publicly discloses private facts about an individual that an ordinary person would find objectionable or embarrassing). 4. Appropriation of identity (using a person's name, picture, likeness, or other identifiable characteristic for commercial purposes without permission).

False Imprisonment

Intentional Tort Against Persons The intentional confinement or restraint of another person's activities without justification. It interferes with the freedom to move without restraint, only so long as the person being restrained does not give consent. Examples: -Store employees confines a person for suspected shoplifting. -Cities and counties may face lawsuits for false imprisonment if they detain individuals without reason.

Conversion

Intentional Tort Against Property Any act that deprives an owner of personal property or of the use of that property without the owner's permission and without just cause.

Trespass to Land

Intentional Tort Against Property Occurs when a person, without permission, does any of the following: 1. Enters onto, above, or below the surface of land that is owned by another. 2. Causes anything to enter onto land owned by another. 3. Remains on land owned by another or permits anything to remain on it. Establishing Trespass: Owner of land must notify the person they are trespassing (with a posted sign or fence). Damages: A trespasser is liable for any damage caused to the property. The land owner is not liable for any injuries that the trespasser sustains on the premise. Land owner is liable for "attractive nuisance" (something that would attract kids such as a swimming pool or sand pile and they got injured. Defenses Against Trespass to Land: One defense is to show that the trespass was warranted (enters to assist someone in danger). Another is when the trespasser can prove they have a license to be on the land (must be invited or gain permission).

Disparagement of Property

Intentional Tort Against Property Occurs when economically injurious falsehoods are made about another's product or property rather than about another's reputation. Could be more specifically referred to as: 1. Slander of Quality 2. Slander of Title

Trespass to Personal Property

Intentional Tort Against Property When any individual wrongfully takes or harms the personal property of another or otherwise interferes with the lawful owner's possession and enjoyment of personal property.

Product Liability Lawsuits

Involve the manufacture, sale, and distribution of dangerous and defective goods)