Chapter 5: Miscellaneous Torts Affecting Business Flashcards
Conspiracy
Occurs when tow or more defendants are to act together with the primary purpose of causing the plaintiff to suffer a financial loss.
Why is the tort of conspiracy harder to prove if the defendant’s actions were lawful, as opposed to unlawful?
If the actions were lawful, the court requires proof that the primary purpose was to hurt the plaintiff. If the actions were unlawful, then it is enough to require proof that the defendant should have known that their actions might hurt the plaintiff.
Intimidation
Occurs when the plaintiff suffers a loss as a result of the defendant’s threat to commit an unlawful act against either the plaintiff or a third party.
Two Party Intimidation
Occurs when defendant directly coerces the plaintiff into suffering a loss.
Three-Party Intimidation
Occurs when the defendant coerces a third party into acting in a way that hurts the plaintiff.
What are the 3 basic rules to intimidation?
- Plaintiff has to prove defendant threatened to commit unlawful act (crime, tort, breach of contract).
- Tort does not apply unless plaintiff gave in.
- No need to prove defendant intended harm. Can be to benefit self.
Interference with Contractual Relations
Occurs when the defendant disrupts a contract that exists between the plaintiff and a third party.
Direct Inducement to Breach of Contract
Occurs when the defendant directly persuades a third party to break its contract with the plaintiff.
What are the two types of interference with contractual relations?
- Direct inducement to breach of contract.
2. Indirect inducement to breach of contract.
What are the four factors required for direct inducement to breach of contract?
- The defendant must know about the contract.
- The defendant must intend to use the third part to breach.
- The defendant must actually cause the third party to break contract.
- The plaintiff must suffer a loss as result of the defendant’s actions.
Indirect Inducement to Breach of Contract
Occurs when the defendant indirectly persuades a third party to break its contract with the plaintiff.
What are the five factors required for indirect inducement to breach of contract?
- The defendant must know about the contract.
- The defendant must intend to use the third part to breach.
- The defendant must actually cause the third party to break contract.
- The plaintiff must suffer a loss as result of the defendant’s actions.
- Unlawful act.
Unlawful Interference with Economic Relations
May occur if the defendant commits an unlawful act for the purpose of causing the plaintiff to suffer an economic loss.
What are the three requirements for unlawful interference with economic relations?
- Intent to injure.
- Unlawful or illegal act.
- Economic loss.
Which torts require that a defendant’s action be unlawful, or threaten something unlawful?
Intimidation, indirect inducement to breach of contract, interference with economic relations.
Which torts can be applied regardless of whether the defendant’s actions are lawful or unlawful?
Conspiracy, direct inducement to breach of contract.
Deceit
Occurs if the defendant makes a false statement, which they know to be untrue, with which they intend to mislead the plaintiff and which causes the plaintiff to suffer a loss.
What are the four criteria to take someone to court for deceit?
- Defendant must make false statement.
- Defendant must know they are making a false statement. Can be reckless, but being careless does not qualify.
- Statement must be made with intention to mislead plaintiff.
- Plaintiff must suffer a loss as a result of reasonably relying on that statement.
False Statement
- Half-truth.
- Failing to update information.
- Exceptions to caveat emptor (let the buyer beware).
Example of half-truth:
If I am selling my business to you, and I provide figures representing gross profits as if they reflect net profits.
Example of failing to update information:
If I am selling my sines s to you, and I provide information that is accurate when I give it, but later becomes inaccurate because of a dramatic change in the market before the deal closes.
Caveat Emptor
“Let the buyer beware.” The typical rule that the seller is not obligated to volunteer information. However, exceptions include hidden defects in houses that make the building dangerous, or disclosing important information for a life insurance policy.
I tricked you into buying an apartment from me for $600,000. According to what I said, the apartment would have been worth $750,000. The apartment is worth $500,000. How much are you entitled to?
$100,000.
Occupier’s Liability
Requires an occupier of premises to protect visitors from harm.