1. 10-1 Chapter 10— Torts in the Business Environment REED SHEDD PAGNATTARO MOREHEAD F I F T E E N T H E D I T I O N McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 10-2 Learning Objectives  To appreciate how tort law is related to property.  To understand the three divisions of torts and to develop a theory of why torts are so divided.  To be able to explain the elements of negligence and to relate these elements to the development of negligence law.  To grasp why tort litigation is so controversial in society today.  To be able to explain why some torts are also crimes.

3. 10-3 Tort Tort law limits how people act and use their resources Definition A civil wrong other than breach of contract

4. 10-4 Categories Of Torts IntentionalNegligent Strict Liability

5. 10-5 Intentional Torts Deliberate Action Causes INJURY

6. 10-6 Intentional Torts Either: Desire to bring about certain results Results are substantially likely Deliberate Action

7. 10-7 Intentional Torts Types  Assault & Battery  Infliction Of Mental Distress  Invasion Of Privacy  False Imprisonment & Malicious Prosecution  Trespass  Conversion  Defamation- Public Or Private Person  Fraud  Common Law Business Torts

8. 10-8 Common Law  Injurious Falsehood- Trade Disparagement  Intentional Interference With Contractual Relations Business Torts

9. 10-9 Negligence Definition Unreasonable behavior that causes injury.

10. 10-10 D C A Negligence ‘A, B, Cs’ A Duty Of Care + Causation (Fact & Proximate) + Damages B Breach Of Duty (Unreasonable Behavior)

11. 10-11 Proximate Causation  Injury ‘in fact’ not sufficient  Proximate cause = legal cause  Was injury ‘foreseeable’ or reasonable to expect.

12. 10-12 Negligence Defenses Assumption of Risk (Plaintiff’s knowing and willing undertaking of an activity) Affirmative Defenses Contributory Negligence (Plaintiff’s own fault) ( now offset by Comparative responsibility)

13. 10-13 Strict Liability In Tort  Strict products liability- unreasonably dangerous defective products  Production defect  Design defect  Warning defect  Respondeat superior- scope of employment  Ultrahazardous activity

14. 10-14 Other Strict Liability Torts  Dram Shop Acts – Tavern owner liable for intoxicated patrons  Common Carriers - Damage To Goods Being Transported, except  Acts Of God  Action Of Alien Enemy  Order Of Public Authority  Inherent Nature Of Goods  Misconduct Of Shipper

15. 10-15 pop QUIZ pop QUIZpop Best Box Company advertises so effectively that National Products, Inc. stops doing business with Average Package Corp. Best is liable for: a. Appropriation b. Wrongful interference with a contractual relationship relationship c. Wrongful interference with a business relationship relationship d.None of the above

16. 10-16 think TANK think TANKthink Identify and describe the elements of a cause of action based on negligence.

17. 10-17 Compensatory Damages Compensate Plaintiff For Injuries Suffered Punitive Damages Used To Punish Defendant Types:  Past/Future Medical Expense  Past/Future Economic Losses  Past/Future Pain Suffering Calculation - Difficult  Negligent Behavior “Gross” or “Willful & Wanton”  Exemplary Damages Damages

18. 10-18 Highest Jury Tort Awards The Crucial Controversy In Personal Injury Torts Is In The Area Of Damages. $103 Million $55 Million Medical Malpractice Negligent Security Defective Truck Transmission $109 Million (2007)

19. 10-19 Alternatives To Tort System Disadvantages  Contingency fee  Legal expenses  Punitive damages  Rarely cost- effective Alternatives Alternatives Arbitration Arbitration No-fault No-fault insurance insurance Workers’ Workers’Compensation

20. 10-20 Workers’ Compensation Acts  Protect Employees/Families From Job- Related Risks  Employer Acted Unreasonably  Tests For Compensation  Injury Accidental  Result Of Employment  Exclusive Remedy Rule

21. 10-21 think TANK think TANKthink Television reporters get jobs at a local grocery store by misrepresenting information about themselves in order to do a story about the store’s alleged sale of out-of-date meat. Are the reporters liable? a. Yes b. No