Business Law Chapter 3 + 4

Question 1

Tort law

Answer 1

compensates victims for harm caused by the activities of others. For example: if your neighbour punches you in the face, you can sue him for the tort of battery.
Tort: a wrongful act causing harm to the person or property of another

Question 2

Strict Liability

Answer 2

if someone stores dangerous substances, they could be held liable for resulting damage from the dangerous substances even if they are blameless.

Question 3

Vicarious liability

Answer 3

the liability of an employer to compensate for torts committed by an employee during the course of his/her employment

Question 4

Types of Intentional Torts (10)

Answer 4

• trespass
• assault
• battery (physical contact)
• Nuisance (private and public)
• false imprisonment
• false arrest
• malicious prosecution
• defamation (libel - written, slander - spoken)
• inducing a breach of contract
• product defamation

Question 5

Battery

Answer 5

unlawful physical contact with a person (common in the medical and sports fields).

Question 6

Nuisance torts

Answer 6

Public Nuisance: interference with the lawful use of public amenities. Ex: Blocking public roads, emitting dangerous substances in public places, etc
Private Nuisance: interference with an occupier’s use and enjoyment of her land. Ex: excessive noise, contaminating liquids poured into rivers, etc.

Question 7

Malicious prosecution

Answer 7

causing a person to be prosecuted for a crime without an honest belief that the crime was committed

Question 8

Defamation

Answer 8

Making an untrue statement that causes injury to the reputation of another person
Two types: Libel (written defamation) and slander (spoken defamation)
-Defamation requires communicating of the offending statement to someone other than the person defamed

Absolute Privilege: Sometimes absolute privilege occurs, where people have complete immunity from liability for defamation – this happens in parliamentary debate, proceedings in law courts, and other places to promote candid discussions

Qualified privilege: Other times qualified privilege occurs, where someone has immunity from liability for defamation provided a statement was made in good faith (for example in a letter of reference).

Question 9

Inducing a breach of contract

Answer 9

intentionally causing one party to breach his contract with another

Question 10

Unlawful interference with economic relations

Answer 10

attempting by threats or other unlawful means to induce one person to discontinue business relations with another

Question 11

Product defamation and Passing Off

Answer 11

Product defamation: making false and damaging statements about the products of another person

Passing off: representing one’s own goods as those of another. For example by using similar labeling or packaging.

Question 12

Negligence

Answer 12

a form of unintentional tort, where someone carelessly causes injury to another. They should then compensate the victim for that injury

Question 13

In order to prove Negligence, follow these steps

Answer 13

1. Show the defendant had a duty of care
2. Then prove that the defendant breached the duty of care
3. Prove that the suffered injuries were a cause of the breach
4. Were the injuries reasonably foreseeable?
5. Prove there was a causal connection between the action of the defendant and the injuries suffered by the plaintiff

Question 14

Types of Defences to Negligence

Answer 14

1. A defendant may dispute evidence the plaintiff produces on: Duty of care, Breach of the standard of care, Causation
2. Contributory negligence: The defendant may also allege that the plaintiff’s own conduct also contributed to injury. A partial defence to a negligence action when the plaintiff’s conduct also contributed to the injury – the loss will be apportioned according to the degree of fault.
3. Voluntary Assumption of Risk: If a plaintiff was aware of the risk of harm prior to undertaking the activity then the defendant can use a defence of Voluntary assumption of risk against the plaintiff
4. Failure to mitigate damage: A plaintiff is expected to act reasonably to mitigate any damage suffered

Question 15

Insurance

Answer 15

• Courts do not admit evidence about the existence or amount of insurance coverage in negligence actions (a defendant can not claim the plaintiff could have avoided the loss by having adequate insurance coverage).
• A plaintiff can not be compensated twice – once by the insurance company and once by the defendant. Once a plaintiff receives their insurance money, then their right to claim against the wrongdoer is passed to the insurance company. The insurance company becomes subrogated (they become entitled to the rights and claims of the plaintiff) and can sue the defendant

Question 16

Other types of Negligence

Answer 16

1. Product Liability: the liability of manufacturers for injury or loss caused by the defects in their products. • A manufacturer owes a duty of care to the ultimate consumers of their products, but it is not always easy to prove that the manufacturer fell below the standard of care and was negligent
2. Duty to Warn: • Manufacturers owe a duty to customers to give proper warning of dangerous products and to make customers aware of the risks associated with the use or misuse of the product. A plaintiff with a claim based on the duty to warn must prove that the duty was owed, and that the warning was deficient, and that had a proper warning been given, the injury would not have occurred. It must be proven that the failure to warn influenced her behaviour, which caused the injury.
3. Occupier’s Liability: A tort imposing liability on occupants of land for harm suffered by visitors to the property

Question 17

Damages

Answer 17

• The usual remedy for a tort is sensation in the form of a sum of money (known as damages)
• The purpose of damages is to restore the plaintiff as much as possible to the position they would have been in had the tort not been committed

Question 18

Punitive or exemplary damages

Answer 18

Awarding damages is not usually to punish the wrongdoer, but sometimes in rare cases they are. Punitive or exemplary damages are damages awarded with the intention of punishing the wrongdoer

Question 19

Special vs General damages

Answer 19

Special damages: damages to compensate for quantifiable injuries (ex. Medical bills, lost wages, etc)

General damages: damages o compensate for injuries that cannot be expressed in monetary terms (ex. Future loss of earnings due to disability, “pain and suffering” of losing one’s sight, etc)

Question 20

Restitution

Answer 20

Restitution: an order to restore property wrongfully taken – if for example a defendant has wrongfully converted the plaintiff’s property

Question 21

Injunction

Answer 21

an order for restraining a person from doing, or continuing to do a particular act. For example an injunction can restrain the defendant from trespassing on the plaintiff’s land.

Question 22

Mandatory Injunction

Answer 22

this is done less frequently, and it is an order requiring a person to do a particular act. For example removing a fence blocking the plaintiff’s right of way to her property.

Question 23

3 different ways you can sue

Answer 23

• The contractual relationship leads to a breach of contract cause of action
• The fiduciary relationship leads to breach of fiduciary duties
• The duty of care owed in tort leads to a tort cause of action

Question 24

Fiduciary duty

Answer 24

Fiduciary duty: a duty imposed on a person who stands in a special relation of trust to another

Question 25

Two steps in imposing liability for breach of fiduciary duties

Answer 25

1. Establishing that the relationships is duty applies

2. Determining if the professional’s behaviour breaches the fiduciary obligations

Question 26

Fiduciary relationships have 3 characteristics:

Answer 26

1. The fiduciary has scope for the exercise of some discretion or power
2. The fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or practical interests
3. The beneficiary (client) is particularly vulnerable to or is at the mercy of the fiduciary holding the discretion or power

Question 27

Third-party liability

Answer 27

liability to some other person who stands outside a contractual relationship. This happens when the tort liability has plaintiffs that expand farther than just the client who paid for the advice – for example when an engineer or architect makes a recommendation for the design specification, the liability extends to the occupiers and others in the building.

Question 28

Tort of Deceit

Answer 28

when someone intentionally makes an untrue statement to mislead someone, this causes an intentional tort of deceit. Someone who relies on this information and suffers a loss can recover the loss.

Question 29

Fraudulent misrepresentation

Answer 29

an intentional tort imposing liability for an incorrect statement made knowingly with the intention of causing injury to another

Question 30

Negligent misrepresentation

Answer 30

an unintentional tort imposing liability when an incorrect statement is made without due care for its accuracy, and injury is caused

Question 31

To determine how wide liability runs

Answer 31

• Is there a sufficiently close relationship between the plaintiff and the defendant that carelessness on the defendant’s part may cause damage to the plaintiff?
• Eligible plaintiffs must be reasonably “foreseeable” and be using the information for the purpose actually “foreseen” by the defendant
• If the number of plaintiffs or the magnitude of their losses are undeterminable, then a court may restrict or limit the duty owed

Question 32

Proving Negligent Misrepresentation

Answer 32

1. There must be a duty of care based on a “special relationship” between the representor and the representee
2. The representation in question must be untrue, inaccurate or misleading
3. The representor must have acted negligently in making the misrepresentation
4. The representee must have relied (in a reasonable manner) on the negligent misrepresentation
   - The reliance on the misrepresentation must be reasonable
   - It is possible that it can be reasonable to rely on a statement, but negligent to rely exclusively on it
   - Detrimental reliance: worsening one’s situation after acting upon false information
5. The reliance must have been detrimental to the representee (ie. damages resulted)