Transcript Business Law for the Entrepreneur and Manager

Business Law for the Entrepreneur
and Manager
Chapter 2 – Torts and Business
Frank Cavico and Bahaudin G. Mujtaba
© Cavico & Mujtaba, 2008
Chapter Topics
• Intentional Torts In The United States
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Introduction and Elements
Intentional Torts against the Person
Intentional Torts against Property
Defenses
Conclusion
• The Tort Of Negligence In The United States
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Introduction
Elements of the Negligence Cause of Action
Special Negligence Doctrines
Defenses
• The Doctrine Of Strict Tort Liability In The United
States
– Summary
© Cavico & Mujtaba, 2008
Intentional Torts in the United States
Introduction and Elements
•
Intentional torts provide a legal remedy for those
people whose protected personal or property
interests are purposefully invaded or harmed by
another. The required elements, or components,
to an intentional tort law suit generally are:
1.
2.
3.
4.
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A wrongful act by another
Requisite intent
Causation
Damages
A purposeful act that is committed volitionally,
that is, voluntarily, by defendant is first required
© Cavico & Mujtaba, 2008
Intentional Torts against the Person
• The first intention tort to the person is a “battery.” A battery is a
purposeful, intentional act by the defendant that causes a harmful or
offensive contact to the person of the plaintiff
• Nominal damages can serve in many jurisdictions as a predicate for a
punitive damage recovery
• Assault is an act by a defendant which causes a reasonable
apprehension of fear in the victim of an immediate harmful or
offensive contact to the victim’s person, that is, the fear of a battery
• “False imprisonment” occurs when a defendant acts or fails to act
and thereby confines or restrains the plaintiff to a bounded area
• Intentional infliction of emotional distress arises when the defendant
purposefully acts in an extreme, outrageous, and atrocious manner and
thereby causes the plaintiff to suffer severe emotional distress
© Cavico & Mujtaba, 2008
•
A major intentional tort with widespread business ramifications is
“defamation.” The elements to a cause of action for defamation that
the plaintiff must prove are as follows:
1.
2.
3.
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False and defamatory language by the defendant, “of or concerning” the
plaintiff, that is, identifying the plaintiff to a reasonable reader, listener,
or viewer
“Publication” of the defamatory language to a third party and
Resulting injury to the reputation of the plaintiff
The “injury to the reputation” requirement of defamation presents a
problem, since now one must carefully distinguish between two types
of defamation – libel and slander
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Libel is a defamatory statement recorded in writing or some other
permanent form (“libel per se” and “libel per quod”)
Slander is spoken defamation; it is oral and heard; it is in less permanent
and less broad areas of dissemination
© Cavico & Mujtaba, 2008
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There are four chief defenses to defamation:
1.
2.
3.
4.
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Consent
Truth
Absolute privilege
Qualified or conditional privilege
Defamation can also occur against one’s property, and at
times this tort is called “disparagement of property,”
which can include a variety of legal wrongs, such as
slander of quality, trade libel, or slander of title
The four “privacy” torts succinctly stated are:
1.
2.
3.
4.
Appropriation
Intrusion
“False light”
Public disclosure
© Cavico & Mujtaba, 2008
• “Malicious prosecution.” This tort is based on a private
defendant (and not a government prosecutor) wrongfully
instituting criminal (and not civil) proceedings against a
party, which terminate in that party’s innocence, and which
the defendant lacked probable cause to prosecute and
possessed an improper motive for instituting the criminal
action
• Interference with contractual or business relations
requires the presence of a contact, a business relationship,
or the expectancy of a business relationship, which the
defendant is aware of and which the defendant interferes
with by improper means in order to advance its own
business interests
© Cavico & Mujtaba, 2008
Intentional Torts against Property
•
There are four main types of intentional torts to property:
1.
2.
3.
4.
Trespass to land: happens when a person purposefully and
physically invades another’s land or real property
Trespass to chattels: trespass to personal property (as opposed
to real property)
Conversion: is a purposeful act by the defendant which amounts
to an exercise of dominion and control over a chattel of the
plaintiff’s, which is so long or serious in nature that the
defendant must pay the full value of the chattel as damages
Defamation to property
© Cavico & Mujtaba, 2008
Defenses
•
Three general categories of defenses are:
1. Consent: considers that a defendant is not liable for a
wrongful act if the plaintiff has consented to that act.
Consent may be given expressly or impliedly
2. Self-defense: when a person possesses reasonable
grounds to believe that he or she is being attacked, or
about to be attacked, that person may use such force
as reasonably necessary to protect against the
potential harm
3. Defense of property: use of reasonable force to
prevent the commission of a tort against his or her
property
© Cavico & Mujtaba, 2008
Conclusion
• These common law intentional torts protect
against intentional infringements of legally
protected interests. When injury to a person
or harm to property occurs not through
intentional or purposeful conduct, but rather
by means of unintentional and careless
conduct, another vital area of the law is
brought forth – the tort of negligence
© Cavico & Mujtaba, 2008
The Tort of Negligence in the United States
Introduction
• The legal wrong of negligence is an unintentional tort
• The term “negligence,” moreover, is a legal term that is
used in two ways. First, it is the name given to the civil
wrong tort lawsuit for acting unreasonably; and second, it
is a type of wrongful conduct which is itself a component
of the tort cause of action
• The common law will not allow a person to defend his or
her behavior on the ground that his or her subjective
person or frame of mind was to act in a non-negligent
manner
© Cavico & Mujtaba, 2008
Elements of the Negligence
Cause of Action
•
Four key elements to the cause of action:
1.
2.
3.
4.
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Duty of care: the plaintiff must show the existence of a duty,
recognized by the law, requiring the defendant his or her conduct to a
legally established standard in order to protect the plaintiff from an
unreasonable risk of harm
Breach of duty: occurs when the defendant’s conduct fails to conform
to the required standard of care
Causation: the law requires a sufficient causal connection between the
defendant’s careless conduct and the resulting harm. The causation
element is satisfied by a showing of two elements: 1) the existence of
actual causation, called “cause in fact,” and 2) the presence of legal
causation, called “proximate cause”
Damages: the plaintiff must prove some type of actual loss or damage
Generally speaking, damage liability for the tort of negligence is
deemed by the common law to be “joint and several.” That is, when
there are more than one defendants who have caused the plaintiff’s
damages, they are all equally responsible for paying the judgment,
regardless of the percentage of fault attributed to them
© Cavico & Mujtaba, 2008
Special Negligence Doctrines
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Res ipsa loquitur maintains that the fact that a particular
injury occurred may in and of itself establish a breach of
the duty owed to the plaintiff
In order to take advantage of the res ipsa loquitur
doctrine, the plaintiff must be able to demonstrate:
1.
2.
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The accident causing the plaintiff’s injury is not the type that
ordinarily would occur unless someone was negligent
Evidence exists showing that the instrumentality that caused the
injury was in the sole control of the defendant
The notable effect of establishing the violation of a statute
is the occurrence of “negligence per se.” That is, the
plaintiff will have established a conclusive presumption of
the duty and breach of duty elements to a negligence
lawsuit
© Cavico & Mujtaba, 2008
• Four key precepts to the doctrine of negligent infliction of emotional
distress:
1. If there is a physical injury, then damages for the attendant’s emotional
distress are recoverable as part of the physical injury
2. If there is a physical impact to the plaintiff, which in itself causes no
actual physical injury, but which is accompanied or followed by emotional
distress, then damages are permitted for such emotional distress
3. If there is no physical impact, but the plaintiff nonetheless suffers physical
disorders, such as shock to the nervous system, then damages are
permissible for the emotional and mental suffering
4. If there is no impact, and the plaintiff does not suffer any physical
disorders, but the plaintiff does suffer emotional distress, then there is no
recovery permitted
• There is a distinction between nonfeasance and misfeasance.
Nonfeasance means not acting; and most significantly as a general rule
there is no legal duty imposed on a person to affirmatively act to aid,
rescue, or benefit another person
• Members of a profession may be obligated not by the law, but by the
codes of ethics of their profession, to affirmatively act to aid people
© Cavico & Mujtaba, 2008
Defenses
•
There are three main defenses to a lawsuit for
negligence:
1. Contributory negligence: careless conduct on the
plaintiff’s part that is a contributing cause to his or
her own injury
2. Comparative negligence: is not a complete defense;
rather, the plaintiff’s damages are determined, the
jury makes a finding on each party’s fault, and the
plaintiff’s damages are accordingly reduced by the
proportion the plaintiff’s own fault bears to the total
amount of the plaintiff’s harm
3. Assumption of the risk: arises when the plaintiff
encounters a known risk voluntarily
© Cavico & Mujtaba, 2008
The Doctrine of Strict
Tort Liability in the United States
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Strict liability, or liability without fault, is a special type
of liability imposed by the common law. Although an
actor not only did not intend any harm, and even though
he or she acted in a careful and prudent manner, the actor
is nevertheless legally responsible for any injuries caused
by his or her conduct
Strict liability is imposed in three types of situations:
1.
2.
3.
Instances involving activities that the law regards as “ultrahazardous”
Liability of the owners and possessors of dangerous animals
Strict tort liability for the manufacturers and sellers of defective
products
© Cavico & Mujtaba, 2008
Summary
• Tort law itself was originally created to protect
victims faced with physical harm, as well as to
deter future injurious cases
• Countries around the world have followed in the
“footsteps” of the United States by developing
product liability laws and tort laws. in order to
protect consumers, citizens, and residents
• the laws are also created to protect businesses and
manufacturers from consumers that are willing to
take advantage of products and the laws. It is for
this reason that international managers and
entrepreneurs are often forced to develop
strategies to avoid legal problems with tort law
© Cavico & Mujtaba, 2008
Reference
1.
•
Cavico, F. & Mujtaba, B. G., (2008). Business Law for the Entrepreneur
and Manager. ILEAD Academy Publications; Davie, Florida, USA. ISBN:
978-0-9774-2115-2.
Cavico, F. and Mujtaba, B. G. (2008). Legal Challenges for the Global
Manager and Entrepreneur. Kendal Hunt Publishing; United States.
© Cavico & Mujtaba, 2008