© 2008 West Legal Studies in Business A Division of Thomson Learning 1 BUSINESS LAW TODAY Essentials 8 th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus Chapter 4 Torts and Cyber Torts

© 2008 West Legal Studies in Business A Division of Thomson Learning 2 Learning Objectives  What is a tort?  What is the purpose of tort law? What are the two basic categories of torts?  What are the four elements of negligence?  What is meant by strict liability? In what circumstances is strict liability applied?  What is a cyber tort, and how are tort theories being applied in cyberspace?

© 2008 West Legal Studies in Business A Division of Thomson Learning 3 Basics of Tort Law  A tort is a civil, legal injury to a person or property caused by a breach of a legal duty.  Plaintiff (the injured party) sues the Defendant (the Tortfeasor) for damages: Compensatory damages. Punitive Damages.

© 2008 West Legal Studies in Business A Division of Thomson Learning 4 Classification of Torts  Intentional.  Unintentional (negligence-no fault).  Strict Liability (absolute liability).

© 2008 West Legal Studies in Business A Division of Thomson Learning 5  Assault and Battery. Assault: the reasonable apprehension or fear of immediate contact. Battery: completion (contact) of the assault. Defenses: Consent. Self-Defense and Others. Defense of Property. Intentional Torts Against Persons

© 2008 West Legal Studies in Business A Division of Thomson Learning 6  False Imprisonment. Confinement or restraint of another person’s activities without justification. Merchants can detain a suspected shoplifter as long as there is probable cause.  Infliction of Emotional Distress. Extreme and outrageous conduct. Some courts require physical symptoms. Intentional Torts Against Persons

© 2008 West Legal Studies in Business A Division of Thomson Learning 7  Defamation. Publication of a false statement (oral or written) that injures a person’s good reputation. Publication: third party must hear or see statement Statements made on the internet may be actionable. An individual who re-publishes the statement will be liable. Statement must hold someone up to contempt, ridicule or hatred in the community. Defamation

© 2008 West Legal Studies in Business A Division of Thomson Learning 8  Slander per se (no proof of damages is required): Loathsome communicable disease. Professional impropriety. Imprisonment for a serious crime. Unmarried woman is unchaste. Defamation

© 2008 West Legal Studies in Business A Division of Thomson Learning 9  Defenses: Truth is normally an absolute defense. Statement was Privileged: Absolute: judicial and legislative proceedings. Qualified: good faith, limited. Public Figures: plaintiff must show statement made with “actual malice.” Defamation

© 2008 West Legal Studies in Business A Division of Thomson Learning 10  Person has the right to solitude. Breach of that duty is a tort.  Tort of Appropriation.  Tort of False Light.  Public Disclosure of Private Facts.  Rights of Internet users? Invasion of Privacy

© 2008 West Legal Studies in Business A Division of Thomson Learning 11  Fraudulent Misrepresentation. Intentionally deceive another to believe in a condition that is different from the condition that already exists. Knowing misrepresentation of fact. Intent to induce innocent party to rely. Justifiable reliance by innocent party. Causation and Damages. Contrast: “puffery” or statements of opinion. Fraudulent Misrepresentation

© 2008 West Legal Studies in Business A Division of Thomson Learning 12  Wrongful Interference with Contracts. Valid, enforceable contract exists between two parties. Third party knows about contract. Third party intentionally causes either party to breach the original contract. Mathis v. Liu (2002). Wrongful Interference

© 2008 West Legal Studies in Business A Division of Thomson Learning 13  Wrongful Interference with Business Relationship. Distinguish competition vs. predatory behavior. Predatory behavior is unlawfully driving competitors out of market. To prevail, Plaintiff must show Defendant targeted only Plaintiff’s customers and product.  Defenses to Wrongful Interference: Interference was justified or permissible. Wrongful Interference

© 2008 West Legal Studies in Business A Division of Thomson Learning 14  Trespass to Land.  Trespass to Personal Property.  Conversion.  Disparagement of Property. Slander of Quality. Slander of Title. Intentional Torts Against Property

© 2008 West Legal Studies in Business A Division of Thomson Learning 15 Negligence  Negligence is an unintentional tort.  Occurs when someone suffers injury because of the defendant’s failure to comply with a legal duty.  Defendant (tortfeasor) creates foreseeable risk of injury.

© 2008 West Legal Studies in Business A Division of Thomson Learning 16 Negligence--Analysis  Did the Defendant owe the Plaintiff a legal duty of care?  Did the Defendant breach that duty?  Did the Plaintiff suffer a legal injury?  Did the Defendant’s breach of duty cause the Plaintiff’s injury?

© 2008 West Legal Studies in Business A Division of Thomson Learning 17 Negligence: Duty of Care  Duty of Care and Breach. Duty is based on reasonable person standard. How would a reasonable person have acted under the circumstances? Duty of Landowners to warn business invitees of risks, and keep common areas safe. Exception: Obvious risks. CASE 4.1 Izquierdo v. Gyroscope, Inc. (2007). Duty of Professionals to clients (attorneys, CPA’s, doctors).

© 2008 West Legal Studies in Business A Division of Thomson Learning 18 Negligence: Injury Requirement  Injury Requirement and Damages Plaintiff must suffer a legally recognizable injury. Not all injuries can be compensated.  Causation Causation in Fact (“but for” test). Proximate Cause (foreseeably strong connection). Palsgraf v. Long Island Railroad (1928).

© 2008 West Legal Studies in Business A Division of Thomson Learning 19 Defenses to Negligence  Assumption of the Risk. CASE 4.2 Sutton v. Eastern New York Soccer Association, Inc. (2004).  Superceding Intervening Cause. Event must be unforeseeable.

© 2008 West Legal Studies in Business A Division of Thomson Learning 20 Defenses to Negligence  Contributory Negligence (few jurisdictions). Plaintiff recovers nothing if he is at fault.  Comparative Negligence (more common). As long as Plaintiff is less than 50% at fault he can recover a pro-rata share of the verdict.

© 2008 West Legal Studies in Business A Division of Thomson Learning 21 Special Negligence Doctrines  Res Ipsa Loquitur.  Negligence Per Se. Violation of law is legal breach of duty. Plaintiff must show: Defendant broke a law/statute. Plaintiff is in special class to be protected; and Statute designed to prevent injury to Plaintiff.  “Danger Invites Rescue” doctrine.  Dram Shop Acts.

© 2008 West Legal Studies in Business A Division of Thomson Learning 22 Strict Liability  Does not require fault, intent or breach of duty.  Usually involves ‘abnormally dangerous’ activities and risk cannot be prevented.  Dangerous Animals.  Product Liability—manufacturers and sellers of harmful or defective products.

© 2008 West Legal Studies in Business A Division of Thomson Learning 23 Cyber Torts  Defamation Online. Can a person be liable for a defamation tort committed in cyberspace? CASE 4.3 Carafano v. Metrosplash.com, Inc. (2003). Should an Internet Service Provider (ISP) be liable for the actions of its subscriber?  Who should be liable for “spam” and computer viruses that cause injury? Federal CAN-SPAM Act 2003.