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CHAPTER 7 Business Torts and Product Liability.

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Presentation on theme: "CHAPTER 7 Business Torts and Product Liability."— Presentation transcript:

1 CHAPTER 7 Business Torts and Product Liability

2 BUSINESS TORTS AND PRODUCT LIABILITY Key Points
Identify the principal intentional business torts and available defenses Understand intentional torts Understand product liability Understand strict liability

3 A CRIME IS A PUBLIC WRONG WHEN ONE BREACHES A DUTY OWED TO SOCIETY
CRIMES A CRIME IS A PUBLIC WRONG WHEN ONE BREACHES A DUTY OWED TO SOCIETY

4 TORT A TORT IS A CIVIL WRONG, OTHER THAN A BREACH OF CONTRACT, FOR WHICH THE COURT WILL PROVIDE A REMEDY NORMALLY IN THE FORM OF DAMAGES

5 3 GENERAL TORT CATEGORIES
Intentional Product Liability Strict Liability

6 INTENTIONAL TORTS

7 FOUR ELEMENTS DUTY BREACH OF DUTY CAUSATION INJURY

8 An element in most torts except for:
FAULT An element in most torts except for: Products liability Strict liability

9 INTENTIONAL TORTS AGAINST PERSONS
Assault

10 INTENTIONAL TORTS AGAINST PERSONS
Battery

11 INTENTIONAL TORTS AGAINST PERSONS
False imprisonment

12 INTENTIONAL TORTS AGAINST PERSONS
Fraud

13 INTENTIONAL TORTS AGAINST PERSONS
Defamation: slander libel

14 INTENTIONAL TORTS AGAINST PERSONS
Invasion of privacy: Appropriation of a person’s name or likeness Intrusion Public disclosure of private facts False light

15 INTENTIONAL TORTS AGAINST PERSONS
Intentional infliction of emotional distress

16 INTENTIONAL TORTS AGAINST PERSONS
Personal injury

17 INTENTIONAL TORTS AGAINST PERSONS
Malpractice (Medical, legal, accounting, etc.)

18 INTENTIONAL TORTS AGAINST PERSONS
Wrongful death

19 INTENTIONAL TORTS AGAINST PROPERTY
Trespass to real property

20 INTENTIONAL TORTS AGAINST PROPERTY
Trespass to personal property

21 INTENTIONAL TORTS AGAINST PROPERTY
Conversion

22 INTENTIONAL TORTS AGAINST PROPERTY
Nuisance

23 INTENTIONAL TORTS AGAINST PROPERTY
Injurious falsehood

24 BUSINESS TORTS Patent Infringement

25 Copyright infringement
BUSINESS TORTS Copyright infringement

26 Trademark infringement
BUSINESS TORTS Trademark infringement

27 BUSINESS TORTS Unfair competition

28 INTENTIONAL TORT DEFENSES
Consent Mistake Necessity Self-defense

29 PRODUCT LIABILITY

30 PRODUCT LIABILITY CLAIMS
Causes of action against manufacturer, distributor and/or sellers for injury from a defective product to the person or property of purchaser, consumer and/or bystander

31 POSSIBLE TORT AND/OR CONTRACT CLAIMS
Negligence Breach of warranty Strict liability

32 NEGLIGENCE

33 NEGLIGENCE Failure to do what a reasonable person would do or doing what a reasonable person would not do

34 PLAINTIFF MUST PROVE EACH OF THE FOLLOWING ELEMENTS:
Duty Breach of duty Causation: Actual cause Proximate cause Injury

35 MANUFACTURING DEFECTS
Improper manufacturing of goods gives rise to tort claim

36 DESIGN DEFECTS Negligence law requires that manufacturers designing products to anticipate and avoid consumer injury Two tests: Risk/utility test: Consumer expectations test:

37 INADEQUATE WARNINGS Failure to warn of a danger associated with its product creates manufacture and maybe seller liability!!!!

38 INADEQUATE WARNING Issues include:
Whether the supplier knew or should have known that the product could be dangerous in a foreseeable use The feasibility of an effective warning The probable seriousness of the injury

39 NEGLIGENCE DEFENSES Comparative Negligence Contributory Negligence
Assumption of Risk

40 WARRANTIES AND BREACH OF WARRANTIES

41 EXPRESS WARRANTIES Express warranty is when a seller of goods states a fact or makes a promise regarding the character or quality of the goods

42 EXPRESS WARRANTIES Created by: Any description of the goods
Any affirmation of fact or promise Any description of the goods Any sample or model Advertisement

43 Sales talk or puffing does not create an express warranty
EXPRESS WARRANTIES Sales talk or puffing does not create an express warranty

44 An “expert’s” opinion may create an express warranty
EXPRESS WARRANTIES An “expert’s” opinion may create an express warranty

45 DISCLAIMERS – EXPRESS WARRANTIES
May be disclaimed or modified only with great difficulty

46 IMPLIED WARRANTIES An implied warranty automatically attaches to the sale of goods by operation of law

47 TWO TYPES Merchantability 2. Fitness for a Particular Purpose

48 DISCLAIMERS-IMPLIED WARRANTIES
May be excluded or modified as follows: Any disclaimer of merchantability must mention merchantability and, in the case of a writing, must be conspicuous Any disclaimer of fitness for a particular purpose must be by a writing and conspicuous

49 STRICT LIABILITY

50 RES IPSA LOQUITUR The thing speaks for itself
In rare cases, plaintiff need not prove manufacturer’s negligence Injury caused by an instrumentality under control of defendant·

51 STRICT LIABILITY—PART I
Definition: One who sells any product in a defective condition, unreasonably dangerous to user or consumer, is liable for harm caused if: · The seller is engaged in the business of selling such a product and · The product is expected to and does reach user without substantial change in the condition in which it is sold

52 STRICT LIABILITY—PART II
Coverage: The rule applies— Even though seller has exercised all possible care Even where the user has not bought the product from seller To all those in the distribution chain, from manufacturer through ultimate retailer

53 STRICT LIABILITY—PART III
Policy: To place the burden and cost of injury on the chain of distribution (which can both insure for and spread the cost), rather than imposing the entire burden on the injured user

54 Defenses: Assumption of risk Product misuse
Normally not assumption of risk

55 TORT REFORM? PRO Tort costs are about 2.2% of America’s GDP
Tort costs are higher in the U.S. than in other countries Too much of tort awards get paid to the attorneys rather than the victims

56 TORT REFORM? CON Lawsuits are less than 2% pf spending and product liability suits are only a fraction of that. Insurance costs don’t drop when tort damages awards are capped Only 3 % of tort cases go to trial Punitive damages are only awarded in 3.3% of tort cases

57 See You in Court? Maybe Not
States have been cracking down on the types of suits that can be filed and how much can be recovered. Here’s a look at some of the restrictions.

58 See You in Court? Maybe Not
States have been cracking down on the types of suits that can be filed and how much can be recovered. Here’s a look at some of the restrictions.

59 Class-action restrictions
Legislatures in nine states have made it harder to combine large numbers of claimants in a single lawsuit

60 Medical- malpractice maximums
Limits on damages, including pain and suffering, and similar measures have been approved by 23 states

61 Punitive-damages limits
Ceilings on the amount of punitive damages have been passed in 32 states

62 Barring out-of-state plaintiffs
Eight states, once meccas for out-of-state plaintiffs, now curtail suits by people with no connection to the jurisdiction

63 Appeal-bond reform Nearly three dozen states have limited the size of the bond needed to appeal a verdict, removing a huge burden for companies

64 Guns Some 33 states have passed laws protecting firearms makers from certain suits filed by gun victims

65 Obesity/junk food Laws in 23 states keep you from suing the likes of McDonald’s for making you fat

66 Drugs A number of states have made it harder to win claims against pharmaceutical companies if their products have been approved by the U.S. Food & Drug Administration

67 Class-action restrictions
Legislatures in nine states have made it harder to combine large numbers of claimants in a single lawsuit

68 Medical- malpractice maximums
Limits on damages, including pain and suffering, and similar measures have been approved by 23 states

69 Punitive-damages limits
Ceilings on the amount of punitive damages have been passed in 32 states

70 Barring out-of-state plaintiffs
Eight states, once meccas for out-of-state plaintiffs, now curtail suits by people with no connection to the jurisdiction

71 Appeal-bond reform Nearly three dozen states have limited the size of the bond needed to appeal a verdict, removing a huge burden for companies

72 Guns Some 33 states have passed laws protecting firearms makers from certain suits filed by gun victims

73 Obesity/junk food Laws in 23 states keep you from suing the likes of McDonald’s for making you fat

74 Drugs A number of states have made it harder to win claims against pharmaceutical companies if their products have been approved by the U.S. Food & Drug Administration


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