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© Cavico & Mujtaba, 2008 Business Law for the Entrepreneur and Manager Frank Cavico and Bahaudin G. Mujtaba Chapter 2 – Torts and Business.

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Presentation on theme: "© Cavico & Mujtaba, 2008 Business Law for the Entrepreneur and Manager Frank Cavico and Bahaudin G. Mujtaba Chapter 2 – Torts and Business."— Presentation transcript:

1 © Cavico & Mujtaba, 2008 Business Law for the Entrepreneur and Manager Frank Cavico and Bahaudin G. Mujtaba Chapter 2 – Torts and Business

2 © Cavico & Mujtaba, 2008 Business Law for the Entrepreneur and Manager (Frank Cavico & Bahaudin g. Mujtaba, 2008; ILEAD Academy, LLC) Table of Contents – Chapter Titles Chapter 1 – Introduction to Law and the Legal System Chapter 2 – Torts and Business Chapter 3 – Products Liability Chapter 4 – Contract Law Chapter 5 – Sales Law and the Uniform Commercial Code Chapter 6 – Agency and Employment Law Chapter 7 – Business Organizations Chapter 8 – Commercial Paper and Banking Transactions Chapter 9 – Creditors and debtors – Rights and Responsibilities Chapter 10 – Internet Law Chapter 11 – Intellectual Property Law Chapter 12 – Real Property Law Chapter 13 – International Business Law Chapter 14 – Liability of Accountants and Other Professionals Chapter 15 – Wills and Trusts Chapter 16 – Personal Property, Gifts, and Bailment Chapter 17 – Conclusion and Case Problems

3 © Cavico & Mujtaba, 2008 Chapter Topics Intentional Torts In The United States –Introduction and Elements –Intentional Torts against the Person –Intentional Torts against Property –Defenses –Conclusion The Tort Of Negligence In The United States –Introduction –Elements of the Negligence Cause of Action –Special Negligence Doctrines –Defenses The Doctrine Of Strict Tort Liability In The United States –Summary

4 © 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.A wrongful act by another 2.Requisite intent 3.Causation 4.Damages A purposeful act that is committed volitionally, that is, voluntarily, by defendant is first required

5 © 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

6 © 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.False and defamatory language by the defendant, “of or concerning” the plaintiff, that is, identifying the plaintiff to a reasonable reader, listener, or viewer 2.“Publication” of the defamatory language to a third party and 3.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 –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

7 © Cavico & Mujtaba, 2008 There are four chief defenses to defamation: 1.Consent 2.Truth 3.Absolute privilege 4.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.Appropriation 2.Intrusion 3.“False light” 4.Public disclosure

8 © 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

9 © Cavico & Mujtaba, 2008 Intentional Torts against Property There are four main types of intentional torts to property: 1.Trespass to land: happens when a person purposefully and physically invades another’s land or real property 2.Trespass to chattels: trespass to personal property (as opposed to real property) 3.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 4.Defamation to property

10 © 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

11 © 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

12 © 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

13 © Cavico & Mujtaba, 2008 Elements of the Negligence Cause of Action Four key elements to the cause of action: 1.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 2.Breach of duty: occurs when the defendant’s conduct fails to conform to the required standard of care 3.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” 4.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

14 © Cavico & Mujtaba, 2008 Special Negligence Doctrines 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.The accident causing the plaintiff’s injury is not the type that ordinarily would occur unless someone was negligent 2.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

15 © 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

16 © 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

17 © Cavico & Mujtaba, 2008 The Doctrine of Strict Tort Liability in the United States 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.Instances involving activities that the law regards as “ultra- hazardous” 2.Liability of the owners and possessors of dangerous animals 3. Strict tort liability for the manufacturers and sellers of defective products

18 © 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

19 © 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: Cavico, F. and Mujtaba, B. G. (2008). Legal Challenges for the Global Manager and Entrepreneur. Kendal Hunt Publishing; United States.


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