CHAPTER 7 TORTS DAVIDSON, KNOWLES & FORSYTHE Business Law: Cases and Principles in the Legal Environment (8 th Ed.)

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 2 OBJECTIVES OF TORT LAW Tort Law: a body of law concerning “private” wrongs. Tort Law: a body of law concerning “private” wrongs. Protects an individual’s right to his/her property and person. Protects an individual’s right to his/her property and person. Based on common law. Based on common law. Provides a mechanism for persons who have been wronged to seek remedies in the court system. Provides a mechanism for persons who have been wronged to seek remedies in the court system. Resolves social and economic policy questions. Resolves social and economic policy questions. Tort Law: a body of law concerning “private” wrongs. Tort Law: a body of law concerning “private” wrongs. Protects an individual’s right to his/her property and person. Protects an individual’s right to his/her property and person. Based on common law. Based on common law. Provides a mechanism for persons who have been wronged to seek remedies in the court system. Provides a mechanism for persons who have been wronged to seek remedies in the court system. Resolves social and economic policy questions. Resolves social and economic policy questions.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 3 THEORIES OF TORT LIABILITY Intentional Torts: actions intended or known to harm someone. Intentional Torts: actions intended or known to harm someone. Negligence: activities not necessarily intended to harm. Negligence: activities not necessarily intended to harm. Strict Liability: situation whereby public trust is such that neither intent or negligence is an issue. Strict Liability: situation whereby public trust is such that neither intent or negligence is an issue. Duty and Foreseeability Standards of Tort Liability. Duty and Foreseeability Standards of Tort Liability. Intentional Torts: actions intended or known to harm someone. Intentional Torts: actions intended or known to harm someone. Negligence: activities not necessarily intended to harm. Negligence: activities not necessarily intended to harm. Strict Liability: situation whereby public trust is such that neither intent or negligence is an issue. Strict Liability: situation whereby public trust is such that neither intent or negligence is an issue. Duty and Foreseeability Standards of Tort Liability. Duty and Foreseeability Standards of Tort Liability.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 4 THEORIES OF TORT LIABILITY Duty: responsibility to protect others from harm. Duty: responsibility to protect others from harm. Foreseeability: knowledge or notice that something will occur in the future. Foreseeability: knowledge or notice that something will occur in the future.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 5 INTENTIONAL TORTS Assault: wrongful, intentional threat that would put a reasonable person in apprehension or fear of offensive, nonconsensual touching. Assault: wrongful, intentional threat that would put a reasonable person in apprehension or fear of offensive, nonconsensual touching. Battery: consummated assault; nonconsensual touching or striking of the victim. Battery: consummated assault; nonconsensual touching or striking of the victim. Assault: wrongful, intentional threat that would put a reasonable person in apprehension or fear of offensive, nonconsensual touching. Assault: wrongful, intentional threat that would put a reasonable person in apprehension or fear of offensive, nonconsensual touching. Battery: consummated assault; nonconsensual touching or striking of the victim. Battery: consummated assault; nonconsensual touching or striking of the victim.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 6 INTENTIONAL TORTS Defamation: an actor intentionally makes an untrue statement that injures the victim’s reputation. Defamation: an actor intentionally makes an untrue statement that injures the victim’s reputation. – Through slander (spoken) or libel (written). Disparagement: false statement about a business’s product, services, reputation, honesty or integrity. Disparagement: false statement about a business’s product, services, reputation, honesty or integrity. – Trade libel (written) or slander of title (oral).

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 7 INTENTIONAL TORTS False Imprisonment: unlawful detention without just cause. False Imprisonment: unlawful detention without just cause. Emotional Distress: actions inflicting severe emotional harm; suffer serious indignity. Emotional Distress: actions inflicting severe emotional harm; suffer serious indignity. Invasion of Privacy: use someone else’s name, likeness of gain or discloses to the public private facts. Invasion of Privacy: use someone else’s name, likeness of gain or discloses to the public private facts.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 8 INTENTIONAL TORTS Trespass: nonconsensual infringement. Trespass: nonconsensual infringement. Conversion: intentional exclusive control over anther's property without permission Conversion: intentional exclusive control over anther's property without permission Misappropriation of Trade Secrets: unlawful use of trade secrets of another business. Misappropriation of Trade Secrets: unlawful use of trade secrets of another business. Trespass: nonconsensual infringement. Trespass: nonconsensual infringement. Conversion: intentional exclusive control over anther's property without permission Conversion: intentional exclusive control over anther's property without permission Misappropriation of Trade Secrets: unlawful use of trade secrets of another business. Misappropriation of Trade Secrets: unlawful use of trade secrets of another business.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 9 INTENTIONAL TORTS Fraud: misrepresentation of material fact with intent to deceive. Involves five elements: Fraud: misrepresentation of material fact with intent to deceive. Involves five elements: – Material fact not opinion is involved. – The fact was misrepresented. – Falsehood was made with intent to deceive. – The falsehood was relied on by other party. – Person was injured as a result of fraud. Fraud: misrepresentation of material fact with intent to deceive. Involves five elements: Fraud: misrepresentation of material fact with intent to deceive. Involves five elements: – Material fact not opinion is involved. – The fact was misrepresented. – Falsehood was made with intent to deceive. – The falsehood was relied on by other party. – Person was injured as a result of fraud.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 10 INTERNATIONAL TORTS Civil RICO Violations: directed at a pattern of racketeering activity. Civil RICO Violations: directed at a pattern of racketeering activity. Defenses to International Torts: Defenses to International Torts: – Consent. – Privilege. – Necessity. – Truth. Civil RICO Violations: directed at a pattern of racketeering activity. Civil RICO Violations: directed at a pattern of racketeering activity. Defenses to International Torts: Defenses to International Torts: – Consent. – Privilege. – Necessity. – Truth.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 11 NEGLIGENCENEGLIGENCE Four conditions are met: Four conditions are met: – Duty: to protect others from harm based on reasonable-and-prudent person rule. Foreseeability. Foreseeability. Knowledge. Knowledge. Investigation. Investigation. Judgment. Judgment. Statutory Standard. Statutory Standard. – Breach of Duty: negligence cause injury Four conditions are met: Four conditions are met: – Duty: to protect others from harm based on reasonable-and-prudent person rule. Foreseeability. Foreseeability. Knowledge. Knowledge. Investigation. Investigation. Judgment. Judgment. Statutory Standard. Statutory Standard. – Breach of Duty: negligence cause injury

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 12 NEGLIGENCE Causation: heart of the law of negligence. Causation: heart of the law of negligence. Actual Cause. Actual Cause. Proximate Cause. Proximate Cause. Harm: injury occurred. Harm: injury occurred.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 13 NEGLIGENCENEGLIGENCE Defenses to Negligence: Defenses to Negligence: – Assumption of Risk. – Contributory Negligence. – Comparative Negligence. Defenses to Negligence: Defenses to Negligence: – Assumption of Risk. – Contributory Negligence. – Comparative Negligence.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 14 STRICT LIABILITY Duty to reimburse for losses is absolute. Duty to reimburse for losses is absolute. Imposed without regard to fault. Imposed without regard to fault. Foreseeable that injury may result from extreme hazardous activity. Foreseeable that injury may result from extreme hazardous activity. Set out in the applicable statutes and court precedents. Set out in the applicable statutes and court precedents. Duty to reimburse for losses is absolute. Duty to reimburse for losses is absolute. Imposed without regard to fault. Imposed without regard to fault. Foreseeable that injury may result from extreme hazardous activity. Foreseeable that injury may result from extreme hazardous activity. Set out in the applicable statutes and court precedents. Set out in the applicable statutes and court precedents.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 15 PRODUCT LIABILITY Manufacturers and distributors may be held liable for harm caused by defective products. Manufacturers and distributors may be held liable for harm caused by defective products. Common theories for imposing liability: Common theories for imposing liability: – Fraud in marketing product. – Breach of implied or expressed warranties. – Negligence. – Strict liability. Manufacturers and distributors may be held liable for harm caused by defective products. Manufacturers and distributors may be held liable for harm caused by defective products. Common theories for imposing liability: Common theories for imposing liability: – Fraud in marketing product. – Breach of implied or expressed warranties. – Negligence. – Strict liability.

© 2004 West Legal Studies in Business A Division of Thomson Learning BUSINESS LAW: Cases & Principles Davidson Knowles Forsythe 8 th Ed. 16 TORT LIABITY OF BUSINESS ENTITIES Businesses can be held liable for the torts of their employees. Businesses can be held liable for the torts of their employees. Liability imposed through respondeat superior: Liability imposed through respondeat superior: – Superior should answer or pay for torts of employees. Torts that occur in the course and scope of employment. Torts that occur in the course and scope of employment.