Torts II Outline VBB Spring 2013

I. Vicarious Liability
A. Basics
1. Occurs when the tort liability incurred by one party (tortfeasor) is imputed to another
party
-D is held responsible for the tort committed by someone else even if he did nothing
to
aid or encourage it, wasnt negligent, or even tried to prevent it
-D is liable for a tort he didnt commit
2. Also called imputed negligence or indirect liability
3. Liability rests on a special relationship between D and the tortfeasor
-Ex. Employee commits a tortious act and P sues the employer
-Goal is for P to be compensated in monetary damages
4. Not a cause of action itself. P must first prove that the active tortfeasor committed a
tortious act and then find a special relationship to hold the responsible tortfeasor
vicariously liable
B. Respondeat Superior
1. Employer is held vicariously liable for torts committed by an employee while the
employee
was acting within the course and scope of employment
a. Imposes liability whether or not the employer was itself negligent and whether or
not
the employer had control of the employee
b. Provides incentive for employer to take safety precautions
c. Employer- responsible tortfeasor; employee- active tortfeasor
2. Scope of Employment (soe)- Must determine whether the conduct of the employee
was within the scope of employment at the time of the injury
a. Acts necessary to the comfort, convenience, health, and
welfare of the
employee
while at work, though strictly personal and not acts of service, do not
take the
employee outside the scope of employment
b. Question of fact for the jury to decide
c. OShea v. Welch- someone using his personal car for business does not take him
out
of the soe
3. Going and Coming Rule- an employee commuting to and from work is outside the
scope of
employment and the employer will not be held vicariously liable
a. Exceptions:
i. Special Hazards- when the travel to and from work subjects the employee
to
some special hazard not common to other members of the traveling
public
-Bussard v. Minimed- employee wrecked after sick from pesticides
ii. Special Errand- liability if employee is rendering a service, either express
or
implied, to employer with his consent
-Incidental benefit to employer not common to the ordinary commute
4. Frolic & Detour
a. Frolic- occurs when the employee departs from the course and scope of
employment to a significant degree in pursuit of his own interests
i. Completely abandoned the business purpose and outside soe
ii. Unrelated to employment and purely personal
iii. Employee is doing something naughty
b. Detour- a deviation that is sufficiently related to the employment to fall under
soe

i. Inside soe, not far removed enough, foreseeable departures

ii. Minor detour from soe and a less serious deviation
iii. Ex. stopping for coffee or running a small errand
c. Question of fact for the jury
5. Slight Deviation Rule- several factors to determine whether an employee has
embarked on
a slight or substantial deviation:
a. Employees intent
b. Nature, time, and place of the deviation
c. Time consumed in the deviation
d. Work for which the employee was hired
e. Incidental acts reasonably expected by the employer
f. Freedom allowed for the employee in performing his job responsibilities
6. Other tests to determine SOE:
a. Control Theory- liability when the act of the employee was committed with
implied
authority, acquiescence, or ratification of the employer
i. Based on employers right to control and direct the employees activities
ii. Were the employees actions part of his job?
b. Enterprise Theory- whether the employers enterprise benefited by the context
of the
employees act but for the unfortunate injury
i. Based on benefit to employers enterprise from employees conduct
ii. Examines the purpose of the employees activities
c. Predominant Motive Test- the fact that the predominant motive of the servant
benefits himself or a third person does not prevent him from being in
soe
d. Foreseeability- whether the tortious conduct was reasonably foreseeable
7. Liability
a. Employer cannot insulate himself from liability by imposing safety rules or
instructing
his employees to proceed carefully
-Preventative policies do not bar liability, employer is still liable
-Or else employer could say I told him not to
b. Indemnity- If employer is held liable, he can recover the full amount from his
employee under indemnity (entire burden shifts to employee)
c. Contribution- If the employer is held liable, he can recover a partial amount
from
employee under contribution (employee would pay his proportionate share)
8. An employer may be held liable for the intentional torts of his employee when they are
reasonably connected with the employment and so within its scope
a. Is it foreseeable that the employee will commit an intentional tort while in the
soe?
-Ex. bouncers, bill collectors, police officers
b. Employer can be held vicariously liable if the employee commits the tort in
furtherance of the employers business
C. Independent Contractors
1. Independent Contractor- someone who performs work for hire for the defendant, but
who is not considered to be an employee
a. Generally, an employer is not vicariously liable for tortious conduct incurred by an
independent contractor
b. Must determine whether the person is an employee or an independent contractor
in
order to hold the employer vicariously liable
2. Right to Control- the test to determine whether a person is an employee or an
independent
contract is the right to control the physical details of the work

a. Focuses on Ds legal right to control the actual means and methods by which the
work is performed, rather than merely the final result of that work
b. Where the employer seeks to control the actual details of the workfurnishing
tools,
setting work schedules and activities, and directly supervising the worka
court is more
likely to classify the worker as an employee and hold principal
VL
3. Generally, no RS for torts committed by the IC
a. Newspaper not VL for money collector who punched woman (Murrell v. Goertz)
b. Principal is not in a position to control the manner in which IC performs the work
c. Factors to consider: extent of control, distinct occupation or business, type of
occupation, skill required, who supplies the
instrumentalities/tools/place of work, length
of time of employment, payment
method, work part of regular business of employer,
parties belief as to type of
relationship, is principal in business?
4. Exceptions where employer will be held VL for ICs conduct:
a. Contract requires intrinsically dangerous work
b. Employer is charged by law with the duty breached
c. Work will create a nuisance
d. Act is illegal
e. Work will involve peculiar risks of harm unless proper precautions are taken (risks
that
are extremely high and special to the work performed)
5. Non-Delegable Duty- owed by the employer to the community at large which imputes
VL even though injury to P was caused by actions of an independent contractor
a. Duty- legal obligation, must look at the source of the duty
b. When is something a non-delegable duty?
i. Anything that causes a grave risk of harm to another
ii. Statute, code, or administrative regulation
6. Apparent Authority- one who expressly or impliedly represents that another party is
his
servant or agent may be held vicariously liable for the latters negligent acts to the extent
of
that representation
a. There must be a representation made to a third party and the third party relies on
it
to his detriment
b. Vicarious liability will apply when someone makes a representation whether there
is a
relationship between them or not (relationship is not necessary)
7. Shareholders are not VL for the torts of employees of the corporation
D. Joint Enterprise
1. Four elements of a joint enterprise:
a. Agreement, express or implied, among the members of the group
b. Common purpose to be carried out by the group
c. Community of pecuniary interest in that purpose among the members
d. Equal right to a voice in the direction of the enterprise; an equal right of control
2. Arises when D has agreed, in advance of any tortious activity, to participate in a specific
activity that subsequently produces an injury to P
3. Each individual participant in the joint enterprise can be held VL for the others actions
E. Bailments
1. A bailment does not make a bailor vicariously liable for the acts of the bailee in the use
of
the chattel
-The possessor or person in control (bailee) will usually be held liable, not the bailor
2. Exception: Family Car Doctrine- the owner of an automobile is held vicariously liable
when the car is negligently driven by a member of the immediate household

-Usually applies to cars but can apply to other motor vehicles, boats, etc.
3. Graves Amendment- no vicariously liability for injury or damage arising out of the use
of a vehicle rented or leased by someone in the business of renting or leasing motor vehicles
-Applies to rental car companies
4. Omnibus Clause- liability insurance for the designated automobile applies to the
named
insured, any member of the insureds household, and to any person using the
automobile with
the insureds permission, provided that it was in the scope of permission
-Lessens the need for automobile consent statutes- make the owner of a car
vicariously
liable for injury caused by the negligent operation of the vehicle as
long as it is being
used with the owners consent
F. Imputed Contributory Negligence
1. Both Ways Test- Contributory negligence will not be imputed unless negligence could
be
imputed and vise versa
2. Negligence of the driver will not be imputed to the passenger unless they are in a
masterservant relationship or joint venture
3. Derivative Claims- when a claim is derivative in nature (loss of consortium or wrongful
death)
the contributory negligence of an injured party will usually be imputed to P because
Ps claim
derived from that of the injured party
II. Strict Liability
A. Basics
1. When a court imposes strict liability, D must pay damages although D neither
intentionally
acted nor failed to live up to the objective standard of reasonable care
-Someone suffers harm even though D exercised the utmost care
2. Do not need to show intent, negligence, or causation
-Applies no matter what precautions were taken
B. Animals
1. Liability can be imposed on those who keep, possess, or harbor animals, not just the
owner
2. Trespassing Animals
a. Possessors of animals likely to roam and do damage are strictly liable for their
trespass
b. Owners are usually liable for property damage done by barnyard animals
-Cattle, horses, sheep, hogs, goats, fowl, turkey, chickens, etc.
c. No strict liability on owners whose domesticated animals have caused harm to
anothers property (must prove negligence)
-Ex. dogs and cats
d. Highway Exception- strict liability does not apply if cattle being driven to the
market
escape onto an adjacent highway
-Cattle MUST be in transition and being driven to a market
e. Fencing In Statute- require owner of the animals to fence them in and if they
dont,
they are held strictly liable for any damage caused by the animal
f. Fencing Out Statute- if P fenced his land properly, there is strict liability only if
the
animal breaks into another persons fenced in property
3. Wild Animals
a. Landowners are not responsible for harm done by wild animals on their property
unless they reduce the wild animal to possession or control or introduce a
nonindigenous animal into the area

for all

time

b. The owner or possessor of a non-domesticated animal is subject to strict liability

harm done by the animal
c. Must first determine the classification of the animal: is it wild or domesticated?
-Depends on the customs of the community
-Deer, ferrets, etc. may be wild or domesticated depending on the area
d. 506- wild animals are not by custom devoted to the service of mankind at the
and in the place in which they are kept
e. Exception: No SL for trespasser when there was a warning sign of wild animals
4. Domesticated Animals- possessor of an ordinary domesticated animal is not subject

to SL
a. The owner of a domestic animal is subject to strict liability only if he knew or had
reason to know that the animal had dangerous propensities and the
dangerous
propensity was the cause of the harm
-Ex. dog that has bitten someone before
b. 506- domesticated animals are by custom devoted to the service of mankind at
the time and in the place in which they are kept
5. Zoos
a. Courts apply a negligence standard rather than strict liability to people who
display
wild animals to the public
b. No difference in liability for public and private zoos
6. One Bite Rule
a. There is no one free bite rule before the owner can be held liable
b. If P was engaged in trespass at the time of the bite, there is no strict liability
-Defense to the dog bite statute
-Statute might say trespass to chattel or trespass to land
c. If P cannot prove the owner knew or should have know of the animals dangerous
propensities, strict liability doesnt apply and P must prove negligence
7, If a person isnt held SL, we can still prove he was negligent
C. Abnormally Dangerous Activities
1. Apply strict liability and not negligence because it is reasonable and just to hold
someone
responsible who engages in these activities
-Defenses: act of God, assumption of risk
2. Non-Natural Use- person will be held strictly liable for non-natural use of his land that
causes
harm to another. They are uses that are for the purpose of introducing
something that was not
naturally on the land
a. Factors for non-natural use of land:
i. Character of the thing or activity in question
ii. Place and manner in which it is maintained
iii. Relation to its surroundings
b. Natural Use- landowner may use his land for anything in the course of ordinary
enjoyment
c. The person who brings onto his land anything likely to do harm if it escapes, must
keep it safe, or is otherwise responsible for all damage which is the natural
consequence of its escape (Rylands v. Fletcher)
3. 520: Factors to determine whether an activity is abnormally dangerous:
a. High degree of risk- existence of a high degree of some harm to the person, land
or
chattels of another
b. Likelihood that the harm that results will be great
c. Inability to eliminate the risk by exercising reasonable care
d. Activity is not a manner of common usage

e. Activity is inappropriate in the locality where its used

f. Social value of the activity- extent to which its value to the community is
outweighed
by its dangerous attributes
4. Ultrahazardous Activity- an activity that necessarily involves a risk of serious harm to
the
persons, land or chattels of others which cannot be eliminated by the exercise of the
utmost
care and is not a manner of common usage
a. Depends on the nature of the location and where the activity takes place
b. Restatement 521- one who carries on an abnormally dangerous activity is subject
to
liability for harm to the person, land or chattels of another resulting from the
activity,
although he has exercised the utmost care to prevent the energy
-SL is limited to the kind of harm, the possibility of which makes the activity
abnormally dangerous
c. Ultrahazardous is now referred to as abnormally dangerous
5. Abnormally dangerous activities:
-Blasting, transportation and storage of toxic chemicals and inflammable liquids,
pile
driving, crop dusting, fumigation with toxic gases, testing of rockets,
fireworks displays,
operation of plutonium production facilities, operation of
hazardous waste disposal
sites, operation of oil wells, and storage of large
quantities of water and other liquids
-In some cases, these activities have NOT been subject to strict liability
6. Most jurisdictions impose strict liability for blasting if its done in a residential or urban
area
-The risk that makes it dangerous is flying debris
7. If P can recover under a theory of negligence, strict liability is not the right cause of
action
D. Defenses
1. A person will not be held strictly liable if damage is caused by an unforeseeable act of
God
-An act of God may be foreseeable under certain circumstances
2. D is not strictly liable if P assumes the risk
a. Assumption of Risk
i. P had knowledge that some risk was involved
ii. P voluntarily encountered that risk or put himself in the way of harm
iii. Causation- Ps conduct actually resulted in the harm
b. If a person with full knowledge of the evil propensities of an animal wantonly
excites
him, or voluntarily and unnecessarily puts himself in the way of such
animal, he would
be adjudged to have brought the injury upon himself, and not be
entitled to recover
3. D is not SL if P is the one who actually caused the accident
III. Products Liability
A. Basics
1. Products liability deals with the problem of the liability of suppliers of products to users
and others for losses caused by some defect in the product
-Liability of a manufacturer, seller, or other supplier of chattels, to one with whom
he is
not in privity of contract, who suffers physical harm caused by the chattel
2. Three theories of recovery used to impose liability:
a. Negligence
b. Breach of Warranty

c. Strict Liability
B. Negligence
1. Negligence analysis: duty, breach, causation, damages
2. Most common types of breach are negligence in:
a. Manufacturing the product
b. Inspecting or testing the product (by any party with a duty to do so)
c. Advertising or sale of the product, typically a problem of failure to warn about
dangerous attributes of the product
3. Negligence liability is imposed on all sellers of chattelswhether damage is to person or
property, whether the manufacturer produced the whole product or a component part,
whether the injured person was the immediate purchaser or not
4. Privity of contract does not bar a negligence claim against a manufacturer
a. Old rule- manufacturer only owed a duty to its direct buyer
b. A manufacturer owes a duty of care to all those who may foreseeably be injured
by
its products (MacPherson v. Buick)
5. Flaws in negligence liability claims
a. Difficult to prove mans negligence led to the defect that injured P
b. There is frequently no remedy against the available D (PJ issues)
C. Breach of Warranty
1. Warranty is an express or implied representation about the quality or attributes of a
product.
If the product does not live up to these representations, and loss results, a breach of
warranty
claim may provide one avenue of recovery
2. Types of warranties:
a. Express Warranty
b. Implied Warranty of Merchantability
c. Implied Warranty of Fitness for a Particular Purpose
3. Express Warranty
a. Factors in deciding whether the manufacturer should be held liable:
i. There was an express warranty
ii. The goods were not fit for their ordinary purpose
iii. Plaintiff justifiably relied on the representation
b. Restatement 402b: One engaged in the business of selling chattels who, by
advertising, labels, or otherwise, makes to the public a
misrepresentation of a
material fact concerning the character or quality of
a chattel sold by him is
subject to liability for physical harm to a consumer
of the chattel caused by
justifiable reliance upon the misrepresentation,
even though: a) it is not made
fraudulently or negligently, and b) the
consumer has not bought the chattel
from or entered into any contract
relation with the seller (Innocent Representation)
c. Seller makes specific representations about the qualities of a product and the
buyer
is injured due to the failure of the goods to fulfill those representations
4. Implied Warranty of Merchantability
a. A seller warrants that its goods are fit for the ordinary purpose for which the goods
are
used. This is not based on any representations of the seller and arises by
operation of law
b. Limitations:
i. It can be disclaimed, if it is done clearly
ii. States may adopt alternative provisions concerning who may recover for
breach
iii. Warranty claim requires timely notice of breach to the seller

c. The thing sold is reasonably fit for the general purpose for which it is manufactured
sold
5. Implied Warranty of Fitness for a Particular Purpose
-If a buyer, expressly or by implication, makes known to the seller the particular
purpose
for which the good is required and it appears that he has relied on the
sellers skill or
judgment, an implied warranty arises of reasonable fitness for that
purpose
6. UCC Limitations
a. Claimant must give prompt notice of the breach to the manufacturer within a
reasonable time of discovering the breach
b. Buyer must have relied on the warranty in making the purchase
c. Sellers might be able to limit or disclaim warranties
d. Feature that was the subject of the warranty had to cause the injury
D. Strict Liability
and

1. Restatement 402A:

1. One who sells any product in a defective condition unreasonably dangerous to the
user
or consumer or to his property is subject to liability for physical harm thereby
caused to the
ultimate user or consumer, or to his property, if:
a. The seller is engaged in the business of selling such product, and
b. It is expected to and does reach the user or consumer without
substantial
change
in the condition in which it is sold
2. The rule stated in Subsection (1) applies although
a. The seller has exercised all possible care in the preparation and sale of his
product,
and
b. The user or consumer has not bought the product from or entered into any
contractual relation with the seller
2. D is held strictly liable when:
a. D is in the business of selling the product
b. D in fact sells the product
c. At the time D sells the product, the product is in a defective condition
d. The defective condition renders the product unreasonably dangerous
e. The defect is the actual and proximate cause of harm to P
3. Policy reasons for strict liability (Greenman v. Yuba Products)
a. Increasing sophistication of products makes it difficult for consumers to assess the
risks
b. Lack of personal relationship between the manufacturer and consumer
c. Manufacturers encourage purchase of their product through extensive advertising
d. Risk of liability will encourage man to make the product safer and discover and
disclose
risks that the consumer might not recognize
4. Three types of recovery under strict products liability:
a. Manufacturing Defect- a flaw in construction that causes the product to depart
from its
intended design
b. Design Defect- the products very design rendered it dangerously unsafe
c. Warning Defect- failure to inform the user of potential dangers makes the product
dangerously unsafe
5. Manufacturing Defects
a. P alleges that the product was defective because it did not meet the manufacturers
own specifications for the product
-The product did not come off the assembly line as the manufacturer intended
b. Elements:

i. Identify the defect in the product

ii. Prove the defect caused the harm
iii. Trace the existence of the defect to the time of the sale of the product by D
iv. Negate other sources of the flaw, such as maintenance or misuse
c. Product can be evaluated against the mans own production standards
d. Manufacturing Defects- imperfections that inevitably occur in a small % of products
as a
result of fallibility of the man process. The product does not conform in some
significant
aspect to the intended design or to the great majority of products
manufactured in
accordance with that design
e. The defect results from some mishap in the manufacturing process itself, improper
workmanship, or because defective materials were used in construction
6. Design Defects
a. A product can be defective if its design makes it unnecessarily dangerous
-The product came out the way the manufacturer wanted to so every unit of a
product is similarly defective
b. Products whose inherent characteristics made them dangerous are not considered
unreasonably dangerous
-Whiskey, tobacco
c. Two tests:
i. Consumer Contemplation Test
ii. Risk-Utility Test
d. Consumer Contemplation Test- a product is defective if it is dangerous to an
extent
beyond what would be expected by the ordinary consumer (minority)
i. The defect depends on the product being more dangerous than the ordinary
consumer would expect
ii. The failure of the product to perform safely may be viewed as a violation of the
reasonable expectations of the consumer
e. Risk-Utility Test- balances the dangers and the benefits of the product design
(majority)
i. This test looks at the product as designed and asks whether the magnitude of
the
danger presented by the product outweighs the utility of the product
ii. Compares the actual dangers presented by the product (not the foreseeable
dangers) with the actual benefits provided by the product (not the
anticipated or
foreseeable benefits)
iii. Most jurisdictions have adopted some form of this test
iv. Factors:
1. Usefulness and desirability of the product
-Utility to the user and public as a whole
2. Safety aspects of the product
-Likelihood that it will cause injury and probable severity of injury
3. Availability of a substitute product
-Meets the same need and isnt as unsafe
4. Manufacturers ability to eliminate the unsafe character without impairing
its
usefulness or making it too expensive
5. Users ability to avoid danger by exercising care
6. Users awareness of the dangers, either because of public knowledge of
the
condition or warnings and instructions
7. Feasibility, on part of the man, of spreading the loss by setting the price of
the
product or carrying liability insurance
v. P is required to prove an alternative feasible and safer design existed in the

market

or could have been done

-P must show the alternative design would have made a difference
f. State of the Art- the best scientific and medical technology that is practically and
economically feasible at the time the product was made or marketed to be
utilized by the
man. The product is evaluated in light of knowledge and technology that
were available
at the time of manufacture, rather than at the time of trial
-Refers to the existing level of technological expertise and scientific knowledge
relevant to a particular industry at the time the product is designed
-Later technological change that makes it possible to design out danger does not
make previously acceptable designs defective
g. Alternative Safer Design- Most jurisdictions require P to prove an alternative
feasible
design in order to prove a design defect. The test is whether the danger
actually avoided
by the proposed alternative design would be greater than:
i. Costs of the new design, and
ii. Loss of product utility from the new design, and
iii. New dangers created by the new design
f. Foreign-Natural Test- can hold vendors of food strictly liable only if the injurycausing
substance is a piece of glass, wire, or other substance foreign to the food
-If the substance is natural, no strict liability and P must prove negligence in
preparation of the food to recover
7. Warning Defects
a. Elements:
i. Manufacturer knew or should have known about the hazard; and
ii. Failed to take precautions in marketing the product to warn users or consumers
about the hazard
iii. Not only must the manufacturer discover the hazard, but the warning given
must
be adequate to inform the public about danger
b. Triggering the Duty to Warn
i. Obvious Dangers- if the danger is obvious or well-known to the public, there is
no
reason to warn, (ex. cigarettes, alcohol, shallow pool, etc.)
ii. Hidden Dangers
iii. Allergic Reactions- duty to warn if the ingredient is one to which a
substantial
number of persons are allergic
iv. Warnings required where necessary for safe and proper use of the product
v. Warnings necessary for reasons of personal autonomy and consent when
dealing
with the risks of prescription drugs and similar beneficial but risky
products
c. Read and Heed Presumption- P is usually given the benefit of a presumption that
a
proper warning would have been read and heeded, thus accident would have
been
avoided
-Presumption is rebuttable, (ex. show P ignored other warnings provided)
d. Post-Sale Warning- duty on the manufacturer to provide post-sale warnings about
risks
that are discovered or that develop after the sale
-No liability for failure to recall unless it violates a statute
e. Warning must be:
i. Available to the actual user
ii. Understandable to the actual user
iii. Sufficiently prominent to attract users notice
iv. Sufficiently urgent given the gravity of the risk
f. Learned Intermediary- in cases involving pharmaceuticals, warnings and

10

instructions
between drug

should be provided to the physician who is a learned intermediary

company and patient
-Exception- liability if manufacturer is directly marketing to the consumer

E. Proof
1. A defect can be proven by circumstantial evidence, where a preponderance of the
evidence establishes that the accident was caused by a defect and no other possibilities
a. All other possibilities do not have to be eliminated (Friedman v. GMC)
b. Similar to reasoning in res ipsa loquitor (only allowed in negligence case, not SL)
c. Circumstantial evidence leads to a reasonable inference that there was a defect
d. The fact that the product went wrong can give rise to the inference that it was
defective and the defect existed when it left Ds hands
2. P must show:
a. The product that injured P was manufactured by D
b. The product was defective and P was injured as a result
c. The defect was present in the product at the time of sale and was not introduced by
a
distributor, installer, or repairer
3. General Defect Theory- P is not required to prove a specific defect in some
circumstances
4. The most convincing evidence is a direct showing of what went wrong
5. Violation of Safety Statute or Regulation- most jurisdictions provide that a violation
of a product safety statute or regulation makes the product defective as a mater of law
a. Product is defective per se for violating the safety statute
b. Very similar to concept of negligence per se
F. Defenses
1. Plaintiffs Conduct
a. Traditional Strict Liability Rule:
i. Contributory negligence is not a defense
ii. Assumption of the risk is a complete bar to Ps claim
-When P voluntarily confronts a known hazard, his claim is barred
b. Rest. 402:
i. Contributory negligence that consists of a mere failure to discover the defect or
to
guard against the possibility of its existence is not a defense
ii. Assumption of the risk is a defense
c. Comparative Negligence- Ps recovery will be reduced to the extent that his own lack
of reasonable care contributed to his injury
2. Product Misuse
a. Manufacturer is not liable for injuries resulting from abnormal or unintended use of
his
product that was not reasonably foreseeable
b. Misuse is not a defense if it was reasonably foreseeable by the manufacturer
-Misuse does not necessarily make a product defective
c. Jury will decide whether the misuse was foreseeable or not
3. Express Preemption
a. State law can be expressly preempted by federal law
b. Riegel v. Medtronic- cardiac patient had surgery and balloon ruptured in his body
i. Court looked at the express language of the statute and plain meaning
ii. Congress intended to invade an area where states had jurisdiction
-Expressly stated in the statute
iii. Federal government created a ceiling on the product so NY could not pass laws
that required more than this ceiling
4. Implied Preemption

11

a. Occurs when a tort claim would create a situation where it would be impossible for D
comply both with what P is arguing in the tort claim should have been done and
federal law requires
b. Wyeth v. Levine- woman got a shot and her arm had to be amputated
i. FDAs approval of the manufacturer was not a complete defense
ii. FDA created a floor for the drug label and D could have strengthened it
iii. Inadequacy of the warning was a proximate cause of Ps injury
iv. In failure to warn cases, the manufacturers, not the FDA, bear primary
responsibility
for their drug labeling at all times
5. Government Standards- D can introduce evidence of compliance with government
standards on the issue of whether the manufacturer was liable or if a product was defective
-A regulatory standard issued by the federal government may preempt state claims
only if
the Court determines Congress intended such a preemption
G. Defendants Other than Principal Manufacturers
1. Strict liability does not apply to the seller of a defective product
-Limited to defendants in the business of selling products
2. Used Products- sellers of used products cannot be strictly liable for selling used
products because they are outside the original chain of distribution
-Exception: seller of used product will be held strictly liable when:
a. There was a defect that could be reasonably discovered upon inspection, or
b. Defect was created by the used product seller
3. Chain of Distribution- retailers, wholesalers, and distributors can be held strictly liable
4. Occasional Seller- one who does not hold himself out as having any knowledge or skill
in the
commercial sense will not be subject to strict liability
5. Owners- owner of a product might be liable for negligence, but not strict liability
6. Manufacturer of Component Parts or Raw Materials- the maker of a component
part not subject to further processing or substantial change in the manufacturing process can
be held strictly liable if there is a defect in the part or material
7. Sales & Service Transaction
a. A business involved in providing products and services will not be strictly liable if the
transaction is predominantly a service, only with an incidental transfer of goods
-Hecter v. Cesars Medical- P sued hospital for defective pacemaker
-Hospital is primarily engaged in providing services, not products
b. Strict liability does not apply to services
c. One who renders a service to another is under a duty to exercise reasonable care in
doing so and is liable for negligence to foreseeable plaintiff
8. Animals- strict liability depends on whether the animal is a product or not, then whether
the product was commercially sold
H. Harm Other than Economic Injury
1. Economic loss resulting from personal injury
-Lost wages, loss of consortium, medical expenses, pain and suffering
2. Economic loss without personal injury to property damage
3. Damage to property
to
what

IV. Nuisance
A. Basics
1. Two types: private and public nuisance
-The harm suffered by P must be substantial
2. Interference with Use and Enjoyment

12

a. Physical damage to land

b. Interference with comfort or health of the occupant of the land
-Smoke, dust, noise, light, or odors
c. Interference with mental tranquility, as by keeping something noxious or unpleasant
on
adjoining land
3. Substantial Interference
a. Substantial means more than trifle, some significant injury must occur
b. Substantial if it changes the condition of the land, measurable economic loss results,
or it
causes personal injury
c. If nuisance only results in discomfort or annoyance, interference must be severe
d. Severe if the interference significantly affects the market value of the land
e. Would the normal person in the locality regard the invasion as seriously annoying?
f. Continuity- does the nuisance occur on a regular or continuing basis or just once?
4. Nuisance is not a separate cause of action
-Liability can be grounded in intent, negligence and strict liability
-Sometimes nuisance can be grounded in all three basis of liability
B. Private Nuisance
1. Private Nuisance- some thing or activity that substantially interferes with a possessors
use and enjoyment of land
a. 821D- a non-trespassory invasion of anothers interest in the private use and
enjoyment
of land
b. Typically involves the problem of conflicting land uses
2. Interference is usually accomplished by a non-trespassory invasion, such as smells, light,
absence of light, smoke, dust, noise, or other forms of pollution
-If interference is a physical invasion, P can sue for trespass to land
3. Unreasonableness of Interference
a. Balancing factors:
i. Amount of harm caused by the activity
ii. Capacity of each party to bear the harm and shift the loss
iii. Nature of the clashing land uses
iv. Nature of the locality
v. Which activity has priority in time
b. Does the harm caused by the activity outweigh the benefits it produces?
c. Can the harm be reduced without significant loss of utility?
C. Public Nuisance
1. 821B- an unreasonable interference with a right common to the general public
-Circumstances that might create an action for public nuisance is whether the conduct:
a. Involves a significant interference with the health, safety, peace, comfort or
convenience of the public, or
b. Is proscribed by a statute, ordinance, or administrative regulation, or
c. Is of a continuing nature or has produced a permanent or long-lasting effect,
and
as the actor knows or has reason to know, has a significant effect upon the
public
right
2. Private Individuals: 821C- in order to recover damages in an individual action for a
public
nuisance, one must have suffered harm of a kind different from that suffered by other
members of the public exercising the right common to the general public that was the subject of
interference
a. Private remedies are available if person has suffered a particular harm
-Ex. personal injury, damage to or loss of value of land

13

b. Harm must be different from that suffered by the general public, or

c. Private individual suffers from a private nuisance in conjunction with the public
nuisance
3. Typically, a public representative will bring a claim for a public nuisance
-County attorney, district attorney, attorney general, U.S. attorney, etc.
4. Examples of public nuisances:
a. Public health- pollution of water supply, malarial swamp; public safety- vicious dog;
public morals- crack house, gambling; public comfort/convenience- blocking a
public
street, smoke, dust, vibrations, etc.
D. Intentional Nuisances
1. Negligence Per Se (At Law)- an act, occupation or structure which is a nuisance at all
times
and under any circumstances, regardless of location or surroundings
2. Negligence Per Accidens (In Fact)- those that become nuisances by reason of their
location, or by reason of the make in which they are construed, maintained or operated
-Morgan v. High Penn Oil- oil refinery emitted gases and odors next to trailer park
-Do not need to show negligence, just that D knew with a substantial certainty he
was interfering with Ps land
3. A person who intentionally creates or maintains a private nuisance is liable for the
resulting injury to others, regardless of care or skill exercised by him to avoid the injury
E. Businesses
1. Community Interests- the interests of the community should be considered in the
determination of the existence of a nuisance
a. Carpenter v. Double R Cattle- cattle feed lot led to pollution, manure, smells,
animals
near Ps property
-Not a nuisance because utility of Ds conduct outweighed Ps harm
b. Balancing Test- consideration of all relevant circumstances involves balancing the
gravity of harm to P against the utility of Ds conduct, both to D and the
community
i. Gravity of harm- look at the extent and character of harm to P, the suitability of
the
locality for that use, burden on P to minimize the harm, etc.
ii. Utility of conduct- look at the purpose of Ds conduct, its social value, the
suitability
of the locality for Ds property, etc.
2. Hypersensitivity- harm must be of a kind that would be suffered by a normal person of
the community
a. Cannot bring a nuisance claim to protect a hypersensitive use of ones land
b. Nuisance is designed to protect reasonable uses of ones land
3. Right to Farm Statutes- prevent new residents from restricting established agricultural
practices
-Place the blame on P who comes to the nuisance and doesnt get a remedy
4. Lawful Businesses- the fact that someone has been issued a permit or license to
conduct a
business at a particular location does not preclude it from becoming a nuisance
-If a store conducts business in an unusual manner, there might be a claim for
nuisance
5. Coming to Nuisance- residential landowner may not have relief if he knowingly came
into a
neighborhood for industrial or agricultural endeavors and has been damaged thereby
6. Custom- social custom or expectations are factors to consider when determining
whether the
harm suffered is substantial; no nuisance if the community customs and
expectations are
consistent with the uses that are being put to the land
-Ex. Livestock was major part of Idahos industry (Carpenter)
F. Damages

14

1. Temporary Damages- compensate for the harm suffered up to the time of trial
-If nuisance is continuing, an award of temporary damages will require P to sue
repeatedly
to collect for additional harm
2. Permanent Damages- based on the loss of land value, and are suppose to compensate
for all
harm caused by the nuisance, past, present and future
-P can sue for compensatory damages- past injury, harm, reduction to the land, etc.
3. Punitive Damages- P can recover punitive damages if he can prove Ds conduct was
intentional, gross, willful, or wanton
4. Injunction- P can request an injunction to prevent D from continuing the conduct that
created the nuisance
i. P must show a nuisance exists then satisfy requirements for equitable relief:
a. Damages are not an adequate remedy, and
b. Irreparable injury will occur if no injunction is granted
c. Ds conduct must be intentional and continuing
d. Damage resulting from the nuisance must be substantial
ii. Court will balance the equities- harm to P vs. utility to D
iii. If P does not get an injunction, he can still recover compensatory damages for past
and
future harm
G. Defenses
1. Intent
a. Consent- P has consented to the existence of the nuisance (express or implied)
V. Defamation
A. Basics
1. A defamatory communication is one that would tend to harm a persons reputation in the
community; a defamatory communication:
a. Exposes P to hatred, contempt, and ridicule
b. Impairs Ps reputation for morality and integrity, or
c. Causes P to be avoided by others
2. Two types
a. Slander- defamation published by spoken words or gestures
b. Libel- defamation published by printed word, photos, sound recordings, video, etc.
3. Role of judge and jury
a. Judge- determine whether the communication is capable of a defamatory meaning
b. Jury- determine whether the defamatory meaning was the one in fact conveyed
-If a statement is capable of two meanings, jury will decide
4. 558: To create liability for defamation there must be:
a. A false and defamatory statement concerning another
b. An unprivileged publication to a third party
c. Fault amounting at least to negligence on the part of the publisher; and
d. Actionability of the statement irrespective of special harm or the existence of special
harm caused by the publication
5. The defamatory statement must refer to P
-Occurs when P is identified by name or as the subject of a statement
6. Two step process to determine if defamation is actionable:
a. Are the words capable of a defamatory meaning?
b. Would the jury understand the statement as defamatory?
7. Pleading Defamation- P must plead:
a. The defamatory words

15

b. Publication- communication of words to a third person (anyone other than P)

c. Extrinsic facts- words were reasonably understood to convey a meaning defaming P
d. Colloquium- formal allegation that the words were spoken of and concerning P
e. Innuendo- allegation of the particular defamatory meaning conveyed by the words
f. Special damages- only when they are necessary
8. Elements:
a. Statement was false
b. Harm to Ps reputation
c. Words were published
9. Defamation can be in lots of different forms:
-Sign language, graffiti, words, representations in pictures/drawings, protesting
coupled
with words on picketing signs, etc.
10. D can raise truth as a defense
-D must prove the statements are substantially true
-If statements are proven to be true, D has a complete defense to Ps claim
B. Who Can be Defamed?
1. Any living person can be defamed
a. There can be no defamation for the dead, since no reputation is affected
b. Defamation of a dead person can give rise to a defamation claim of a living person
2. Group Defamation
a. 564A- One who publishes defamatory matter concerning a group or class of
persons is
subject to liability to an individual member of it, but only if:
i. The group or class is so small that the matter can reasonably be understood to
refer
to the member, or
ii. The circumstances of publication reasonably give rise to the conclusion that
there is
particular reference to the member
b. Where the group or class libeled is large, none can sue even though the language is
inclusive; where the group or class libeled is small, and each and every member
of the
group is referred to, any individual member can sue
-Groups that are usually successful have 25 or less people
3. Corporations- a corporation has no reputation in the personal sense so it cannot be
defamed
a. Can have a claim for defamation that casts an aspersion upon its honesty, credit,
efficiency, or other business or moral character
b. A charitable or non-profit corporation might have a claim since defamation affecting
its
character or operations can deprive it of gifts or other sources of revenue
4. Colloquium or reference to P does not need to identify P by name if it is reasonably
understood as referring to him
a. If words are not reasonably understood to refer to P, there is no defamatory
imputation
identifying P
b. When P is not expressly identified, issue is whether a reader with knowledge of the
surrounding circumstances could have reasonably understood that the words
referred to P
C. Libel & Slander
1. 568
a. Libel- consists of publication of defamatory matter by written or printed words, or
by its
embodiment in physical form, or by any other form of communication which
has the
potentially harmful qualities characteristic of written or printed words
b. Slander- consists of the publication of defamatory matter by spoken words,
transitory
gestures, or by any form of communication not stated above

16

2. Damages
a. Libel- damages are presumed
b. Slander- must prove special damages
-Must show nexus- connection between defamatory statement and harm to Ps
rep
3. Broadcasting- most states have statutes that any broadcast defamation is treated as
slander, whether there is a script or not
4. Repetition
a. Original publisher is liable for damages due to a repetition that might reasonably
have
been anticipated
b. A party who repeats defamation is himself liable for its publication, even if he states
the
source
5. Slander Per Se- actionable without proof of special damages
a. Imputations of a Major Crime
i. Crime involving moral turpitude- treason, espionage, rape, murder, burglary,
etc.
ii. 571- crime punishable by state or federal institution and involving moral
turpitude
b. Loathsome Disease
i. Mostly consists of diseases contracted during sexual intercourse and STIs
ii. Person must be presently suffering from the disease- must be an existing
disease
iii. Does not include insanity, tuberculosis, and other communicable diseases
c. Business, Trade, Profession or Office
i. If the words are likely to affect P in his business, trade, profession or office, the
probability of some temporal damage is sufficiently obvious
ii. Person must be employed in the profession when statement was made
d. Serious Sexual Misconduct
i. Traditionally a charge imputing unchastity to a woman and didnt apply to men
ii. Courts are split on imputation of homosexuality
6. Libel Per Se and Libel Per Quod
a. Libel Per Quod- statement that is not defamatory on its face and its necessary to
be
aware of certain extrinsic (or unstated) facts in order to appreciate its defamatory
implications
-P must allege and prove those extrinsic facts to have a cause of action
b. Special damages are not required in any libel action
D. Publication
1. Publication- communication of the defamatory words to someone other than the person
defamed
-No cause of action if it is just communicated to P and no one else hears it
2. 577- D must have intended the publication or been at least negligent with regard to its
communication to a third party
-No liability if the publication occurred by mistake and not by Ds fault
3. No publication when:
a. Words are spoken by D to P, with no reason to suppose anyone can overhear, but
they
are heard by a concealed listener
b. D sends defamatory matter in a letter to P but is unexpectedly read by third person
4. Publication by Plaintiff- D is not liable for any publication made by P alone
5. D can be liable for failure to remove defamation posted on his premises
6. Single Publication Rule- the publication of a book, periodical, or newspaper containing

17

defamatory matter gives rise to only one cause of action for libel, that accrues at the
original publication and the statute of limitations runs from that date
-Morning and evening editions of a newspaper give rise to two separate claims
-New or different editions = different causes of action
E. Basis of Liability
1. In order for a public official to recover for defamation, he must prove the statement was
made with actual malice (New York Times v. Sullivan)
a. Actual Malice- means D knew the statement was false or made it with a reckless
disregard of whether it was false or not
b. Applies to public officials, public figures, and any matter of public or general interest
2. Public Officials and Figures
a. Public Official- test is whether the position in government has such an apparent
importance that the public has an independent interest in the qualifications
and
performance of the person who holds it, beyond the general public interest
in the
qualifications and performance of all government employees
b. Public Figure- person of such pervasive fame or notoriety that he is a public figure
in all
contexts
c. Limited Public Figure
i. Person can be a public figure with respect to a particular public controversy
ii. Person can become a public figure voluntarily or being involuntarily drawn in
3. Test of Serious Doubt- (subjective standard) there must be sufficient evidence that D
entertained serious doubts as to the truth of his publication; publishing with such doubts
shows a reckless disregard for the truth (St. Amant v. Thompson)
a. Recklessness may be found where there are obvious reasons to doubt the veracity of
the informant or the accuracy of his reports
b. Jury must determine whether the publication was made in good faith
4. D must have made the false publication with a high degree of awareness of probable
falsity
or must have entertained serious doubts as to the truth of the publication (HarteHanks
Communications v. Connaughton)
a. Failure to investigate before publishing, even when a reasonably prudent person
would
have done so, is not enough to show reckless disregard
b. If D published the defamatory material in order to increase his profits, this is not
enough
to show actual malice
c. Can look at Ds knowledge and actions or omissions in respect of that knowledge
5. Repetition- person is not relieved from liability for repeating a defamatory charge, even
if he indicates the source and accurately repeats it
6. A private individual of public concern does not have to prove actual malice (Gertz v.
Robert)
a. NY Times Standard does not apply to private individuals
-Less opportunity for self-help correction and more deserving of protection
-P only has to show D was at least negligent
b. States may define the proper standard for defamation
c. No presumed or punitive damages unless P shows actual malice
d. P can only recover for actual injury
i. Impairment of reputation and standing in the community
ii. Personal humiliation
iii. Mental anguish and suffering
7. State can impose any standard of liability as the measure of proof required (Dun &
Bradstreet
v. Greenmoss Builders)
a. State can impose strict liability when its a public figure of private concern

18

b. Private figure P bears the burden of showing the statement is false before he can
recover damages from a media defendant
8. A private figure of public concern against a media D has the burden of proving the
statement was false while D has the burden of proving the statement was true
(Philadelphia
Newspapers v. Hepps)
9. Opinions
a. Factors to determine whether a statement is a fact or opinion:
i. Specific language used
ii. Whether the statement is verifiable
iii. General context of the statement
iv. Broader context in which the statement appeared
b. Fair Comment- affords legal immunity for the honest expression of opinion on
matters of
legitimate public interest when based upon a true or privileged
statement of fact
c. 566- Comment was generally privileged when it concerned a matter of public
concern, was upon true or privileged facts, represented the actual opinion of
the speaker,
and was not made solely for the purpose of causing harm
F. Privilege
1. Judicial Privilege
a. Judge has absolute immunity for defamatory words published in the course of
judicial
proceedings
b. Privilege attaches to judge, attorney, radio station, witnesses, pleadings, affidavits,
etc.
c. Privilege does not extend to what is said outside the court
d. If privilege exists, limitation is that what was said must have some reasonable
bearing to
the subject of the inquiry (required relevance or pertinence)
2. Legislative Proceedings
-Absolute privilege for members of Congress and state legislatures in the performance
of
their legislative functions
3. Federal Public Officials
-If publication took place within the scope of the federal officials office or employment,
no cause of action available against the officer or US
4. Conditional or Qualified Privilege
a. Privilege allowed between former employer and new employer
-Employer can lose the privilege if he improperly uses it
b. D cannot claim a qualified privilege if he knows the defamatory statement is false or
doesnt think it is true
c. Court can look to whether the information was requested by the recipient or was
volunteered
VI. Privacy
A. Basics
1. Invasion of Privacy- 652A
a. One who invades the right of privacy of another is subject to liability for the resulting
harm to the interests of the other
b. The right of privacy is invaded by:
i. Intrusion- unreasonable intrusion upon the seclusion of another
ii. Appropriation- appropriation of the others name or likeness
iii. Public Disclosure- unreasonable publicity given to the others private life

19

iv. False Light- publicity that unreasonably places P in a false light before the
public
B. Intrusion
1. Intrusion involves the invasion of a persons private space or affairs
-There must be some sort of invasion into a private area of Ps life
2. Usually invoked against spying, eavesdropping, snooping, breaking and entering, and
similar
invasions of a persons home or office
3. Elements
a. Intrusion must be into a private place, conversation or matter, and
b. It must be highly offensive to a reasonable person
4. Intrusion Upon Seclusion- 652B
-One who intentionally intrudes, physically or otherwise, upon the solitude or seclusion
of
another or his private affairs or concerns, is subject to liability to the other for
invasion of his
privacy, if the intrusion would be highly offensive to a reasonably
person
5. Intrusion can be accomplished:
a. Physically, as by entering a persons house or office
b. Electronically, as by wiretapping
c. Mechanically, as by using a telephone to observe P at home
6. Intrusion must be highly offensive to a reasonable person
a. Intrusion must be significant in scope, not trivial
b. It must invade an area that the reasonable person would feel is truly private
-Ex. Observation of a person in a public place is normally not an invasion of
privacy,
no matter how much the person being observed wants to be alone
7. Third Parties
a. Information obtained from the intrusion does not have to be published to a third
person
to be actionable
b. Tort of intrusion is complete as soon as the offensive intrusion itself takes place
c. The person who receives the information is not liable for intrusion
8. P does not have to have complete privacy to have some expectation of privacy
-Sanders v. ABC- P had a privacy claim for Ds intrusion upon him at work
C. Appropriation
1. Appropriation involves the use of Ps name, likeness, or identity for the users benefit
-Based on the idea that a persons identity may have a distinct value that should be
protected from exploitation without permission
2. Elements
a. D appropriates (makes use of) Ps name or likeness
b. Use was for Ds own purposes or benefit, commercially or otherwise
c. P suffered damages
d. D caused the damages incurred
3. Appropriation of Name or Likeness- 652C
-One who appropriates to his own use or benefit the name or likeness of another is
subject
to liability to the other for invasion of privacy
4. First Amendment Privilege- permits the use of Ps name or likeness when it is made in
a
publication concerning a matter that is newsworthy of a legitimate public concern
5. Right of Publicity- protects the ability of famous people to enjoy and control the
benefits of
their fame
-Famous people have the exclusive right to license the use of their names and faces
D. Public Disclosure
1. Imposes liability for the publication of private facts when the matter publicized is of a

20

kind that a) would be highly offensive to a reasonable person, and b) is not of legitimate concern
to
the public
-Complaint is that the matters are private and that the disclosure of them is so highly
offensive that P should be able to recover for the mental anguish suffered as a
result of the
public discourse
2. Elements
a. D must publicize
b. Some private information about P
c. The disclosure of the private information must be highly offensive to a reasonable
person
d. The information disclosed must not be a matter of legitimate public concern
3. Publicity
a. Publicity must be widespread disclosure, not just to one other person
b. Communicating the private fact to a single person or a small group of people is not
enough for an invasion of privacy
4. Publics Right to Know
a. If the facts disclosed involve a matter of legitimate concern to the public, the
Constitution protects the right to disclose them
b. Public figures and public officials have a narrower scope of privacy
c. Public has a legitimate interest in even some private facts about public figures and
officials, to the extent that the facts relate to the persons office or place in the
public eye
5. Breach of Confidence- a person entrusted by another with confidential information may
owe the other an obligation not to disclose the information to third parties
a. Based on the relationship between the person entrusting the information and person
receiving it; often implied from a contractual duty between the parties
b. Information must be confidential
c. Exception- confidential information may be disclosed to appropriate parties on
occasion
E. False Light
1. False light occurs when D places P in an objectionable false light in the public eye
-Protects a persons privacy interest in not being portrayed to the public in an
objectionable false position; that is, as something the person is not
2. Elements
a. D must publicize some matter that places P in a false light
b. The false light must be highly offensive to a reasonable person
c. D must have knowledge of the falsity of the position in which P is placed or must act
in
reckless disregard of the falsity
3. False Light- 252E
-False light actions protect Ps interest in not being made to appear before the public,
otherwise than he is
4. If the matter is of public concern, P must show actual malice- that D knew of the
statements
falsity or acted with reckless disregard of the statements truth
-Public figures must show actual malice; private individuals can just show negligence
F. Defenses and Damages
1. Defenses
a. First Amendment- free speech
b. Consent- if a person consents, he will have no claim
c. Newsworthiness
d. Absolute Privilege

21

e. Conditional Privilege
2. Damages
-Three types of damages are available
VII. Misrepresentation
A. Basics
1. Three forms of misrepresentation:
a. Negligence
b. Fraudulence
c. Innocence
2. Basic elements of misrepresentation
a. False representation of a material fact
b. Scienter
c. Intent to induce reliance
d. Justifiable reliance
e. Damages
3. 531- A person who makes a misrepresentation is liable to the person or class of persons
the maker intends, or had reason to expect, will act in reliance upon the misrepresentation
-Foreseeability alone is not sufficient
-The tortfeasor must have information that would at least lead a reasonable person to
conclude that there is an especial likelihood that it would influence someone in Ps
position
B. Concealment & Non-Disclosure
1. Generally, there is no duty to disclose a material fact or opinion to someone
-Exceptions
a. Fiduciary Relationship- fiduciary or confidential relations carry with them the
duty
to make a disclosure of all material facts
b. Active Concealment- where a person actively conceals a material fact, he is
under a duty to disclose a fact, and failure to do so creates liability
c. Incomplete Statements- if D does speak, he must disclose enough
information to
prevent his words from being misleading
d. Material to the transaction- if the fact is material and goes to the very heart of
the
transaction, there might be a duty to disclose
2. Fraudulent Misrepresentation
a. Inducement- D must induce P into reliance, intent to deceive
b. Materiality
c. Reliance
d. Damages
3. 526- a misrepresentation is fraudulent if D:
a. Knows or believes that the matter is not as he represents it to be
b. Does not have confidence in the accuracy of his representation that he states or
implies
c. Knows that he does not have the basis for his representation that he states or
implies
4. No fraudulent misrepresentation when D remains silence
5. The false representation must concern a material fact
C. Basis of Liability
1. Three forms of misrepresentation: negligent, fraudulent, and innocent
2. Negligent Misrepresentation

22

a. Occurs when the party making the statement is mistaken and has a duty to use due
care
b. Elements
i. Misrepresentation of fact by D
ii. The misrepresentation is made in the course of Ds business, profession, or
employment, or in the course of a transaction in which D has an
economic interest
iii. The misrepresentation results from Ds negligence (failure to use reasonable
care)
in obtaining information and communicating it to P
iv. Justifiable reliance (by P who D owes the duty of care)
v. Resulting economic damage
c. Liability arises only where there is a duty to give correct information
d. If P fails to use due care, he can be liable for contributory negligence
e. 311- one who negligently gives false information to another is subject to liability for
physical harm caused by action by the other in reasonable reliance upon
information,
where such harm results to:
i. The other, or
ii. Such third persons as the actor should expect to be put in peril by the action
taken
-Such negligence may consist of failure to exercise reasonable care in:
i. Ascertaining the information, or
ii. The manner in which it is communicated
f. Relying on an instruction manual or how-to guide does not give rise to liability
-Winter v. GP Putnams Sons- author not liable for incorrect info about
mushrooms
g. Hanberry v. Hearst- D liable for endorsing shoes that injured P
i. D can be liable for an opinion that comes with additional facts
-Additional facts show D had additional knowledge about the shoes
ii. Must be reasonable to infer person representing the information has additional
knowledge
h. Negligent misrepresentation can be fraudulent, negligent, or innocent
-P does not need to show D had actual knowledge of the statements falsity
i. 552C- one who, in a sale, rental or exchange transaction with another, makes a
misrepresentation of a material fact for the purpose of inducing the other to
act or refrain
from acting in reliance upon, is subject to liability to the other
-P can receive expectation damages
j. Ds actions can be so grossly negligent that they amount to fraud
D. Third Persons
1. New York Rule
i. Accountants are liable for negligence when:
a. They are aware their statements will be used for a particular purpose
b. By a particular known party
b. Some conduct by the accountant links them to a third party who will rely on
the statements (nexus requirement)
ii. Need to have the bounded, triangular relationship
iii. This is not limited to accountants
iv. More restrictive than restatement
2. Restatement Approach
a. Accountant is liable to the limited group of persons that he knows will rely on the
info

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b. With regard to a transaction that the accountant intends the info to influence
3. Foreseeability Rule
a. Accountants are liable for all foreseeable consequences of their actions
b. Most broad
4. Typically, accountants are not liable to a third party who relies on the info to their
detriment
E. Reliance
1. The misrepresentation must cause P to take some action, and P must be justified in
taking this
action based on the representation
2. To determine whether the reliance was justified, court must ask:
a. Was the representation one that a reasonable person would rely on?
i. Must be material- about a fact that makes a difference
ii. P is not entitled to rely if P knows facts that the representation is untrue
b. Did P in fact rely upon the statement to his or her detriment?
-Causation element
3. Factors to consider whether the reliance was reasonable under the circumstances:
a. Ps intelligence and experience (subjective)
b. Relationship between the parties
-Is it an arms length transaction or are the parties in a confidential relationship?
c. Could the falsity of the statement been discovered through ordinary care?
4. Reliance is not justified if the statements were obviously false
-The obviousness of a statements falsity vitiates reliance so no one can rely on falsity
5. No duty to investigate- P does not have a duty to make an inquiry or investigation as to
the truth of an apparently reliable statement
F. Opinion
1. A misrepresentation must be of an existing fact, not the mere expression of an opinion
-BUT, an opinion can be a representation of an existing fact
2. Generally, courts do not regard opinions as reliable, but:
a. Statements of quantity are usually considered statements of fact
b. Opinions might imply a factual basis that is false
c. D may not really have an opinion
3. Statistics in an opinion are usually treated as puffery
4. Predictions of the future are usually considered statements of opinion, unless known to
be untrue/impossible
5. An opinion that consists of trade talk or puffing is not actionable as misrepresentation
6. When parties are so situated that the buyer may reasonably rely upon the expression of
the sellers opinion, seller can be held liable
-Ex. Vulcan Metals v. Simmons- false statements about vacuum were facts, not
opinions
G. Law
1. 545: Misrepresentation of Law
a. If a representation to a matter of law in a business transaction is a representation of
fact the recipient is justified in relying upon it to the same extent as though it
were a
representation of any other fact
b. If the representation as to a matter of law in a business transaction is a
representation of
opinion as to the legal consequences of facts known to the maker
and the recipient or
assumed by both to exist, the recipient is justified in relying
upon it to the same extent as
though it were a representation of any other opinion
stated in 542 or 543
2. A misrepresentation based on the effect of a law is actionable but a misrepresentation

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based

on a law is not
-People are presumed to know the law so P cannot say he relied on Ds
misrepresentations
of the law
3. Misrepresentation of a fact is actionable; misrepresentation of the law is not
-Sorenson v. Gardner- P did not rely on his ignorance of the law, but of the facts
4. Representations as to the law of another state are treated as statements of fact, upon
which
P may justifiably rely
H. Prediction & Intention
1. No cause of action based on intentions or future predictions
a. False representations must be of existing facts and cannot consist of mere promises
or
conjectures as to future acts or events
b. Promises or assurances as to future events cannot be made the basis of an action
for
fraud
c. Exception- can be actionable if there is a present intent and present existing facts
2. Whether P has a cause of action for a statement based on future intentions depends on
whether it was material to the transaction
3. Ds state of mind can be established as a basis of fraudulent misrepresentation
-Can look at Ds state of mind to determine whether he intended to go through with his
promise
-Need to show state of mind is an existing fact
VIII. Interference with Advantageous Relationships
A. Business Relations
1. Injurious Falsehood- creates liability for any false and malicious statement resulting in
the pecuniary loss to another
-Elements:
i. A false statement of a kind calculated to damage a pecuniary interest of P
ii. Publication to a third person
iii. Malice in the publication
iv. Resulting special damage to P, in the form of pecuniary loss
2. Title
a. Horning v. Hardy- P tried to sell his house but D sued, thinking he owned the
property,
and P was not able to sell the house
i. Ps interference with Ds title was privilege because he had honestly and
reasonably believed he had an economic interest in the property
ii. D could not prove actual malice
b. Qualified Privilege- if D has a present, existing economic interest to protect, such
as the
ownership or condition of property, he is privileged to prevent performance
of the K of
another which threatens it; D is also privileged to assert an honest
claim, or bring or
threaten a lawsuit in good faith, to exercise the right of
petition to public authorities or to
settle his own case out of court
c. Conditional Privilege- the privilege may be lost either by proof of constitutional
malice in
the form of reckless disregard for truth or falsity or knowing falsehood or by proof
of
common law malice in the form of spite or ill-will
3. Unfavorable statements made by a competitor are not actionable
a. A competitor making a statement comparing his product to another is not
actionable
b. A statement which takes the form of an unfavorable comparison of products, or
which
puffs or exaggerates the quality of ones own product is not actionable

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i. Puffery or mere trade talk is not enough

ii. The competitors puffing privilege permits statements of comparison, that Ds
goods
are the best in the market, that they are better than Ps, or boasting or
exaggeration,
even though D is fully aware that what he said is false, and the
publication is made f
or the purpose of injuring P to take business away from
him
c. Exception- when the statements of a third party are involved
-Actionable because ascertainable facts give the comparison more weight
B. Interference with Existing Contracts
1. Occurs when P has an existing contract with a party but D interferes with it
2. Elements
a. Existence of a validly enforceable contract
b. Ds knowledge of the existence of that contract
c. Malicious, improper, or intentional interference with that contract
d. A breach of that contract, and
e. P suffers damages
3. Negative covenant- a promise not to do something
4. Bacon v. St. Paul Union Stockyard- P had a cause of action because D would not allow
him to
work at his stockyard and told other businesses not to hire him, interfering with Ps
work contract
5. Examples of interference
a. Third party intervener induces one of the parties to breach the contract
b. Third party erects barriers or burdens to performance in way of both parties
6. Indirect Interference
a. Interference does not have to be direct, in the sense of actually urging a party to
breach or offering a more advantageous deal
b. Indirect interference can occur by conduct that makes it more difficult for the party
to
perform the contract
7. Improper Purpose
a. D desired to interfere with the performance of the contract without justification
b. Malice (desire to cause harm, spite, or ill-will) is not required
C. Interference with Prospective Relationships
1. Occurs when P had a probability of a future economic gain in which D interfered
2. Elements
a. D intentionally and improperly
b. Interferes with anothers prospective contractual relationship
c. By inducing or preventing a third person not to enter or continue a relationship
d. Resulting in pecuniary loss from the failure to enter the contract
3. Illegal contracts or contracts against public interest are not protected against
interference
4. A contract to marry is not protected from interference
5. If D opens a business solely for the purpose of putting P out of business, P has a claim
6. Intentional Interference with Performance of Contract by Third Person
-One who intentionally and improperly interferes with the performance of a K (except a
contract to marry) between another and a third person by inducing or otherwise
causing
the third person not to perform the K, is liable to the other for the pecuniary
loss resulting to
the other from the third persons failure to perform the K
7. 767- factors to determine whether conduct is improper:
a. Nature of the actors conduct
b. Actors motive

26

c. Interests of the other with which the actors conduct interferes

d. Interests sought to be advanced by the actor
e. Social interests in protecting the freedom of action of the actor and contractual
interests of the others
f. Proximity or remoteness of the actors conduct to the interference
g. Relations between the parties
8. Types of wrongful conduct:
a. Violating ethical standards
b. Physical violence, threats, limitations, and unlawful conduct
c. Conduct designed to prevent or hinder a person entering into a contractual or
business
relationship
d. Boycotts
e. Concerted refusal to deal
f. Wrongful prosecution of civil suits; wrongful prosecution of criminal sanctions
g. Fraud
h. Economic pressure
9. Justification & Public Policy
a. A reasonable and disinterested motive for the protection of other individuals or the
public will justify intentional interference with contract
-D does not have to be a completely disinterested party
b. Privilege to interfere with prospective relationships arises if it is in the interest of
other or
the public interest
c. Justification concerns public welfare and morality
d. Determined by the facts of a case and D can raise it as a defense or privilege
10. Expectancy
a. Where P can prove that, but for the tortuous interference of D, he would have
received
a gift or a specific profit from a transaction, he is entitled to recover for the
damages done
by D
b. P can only recover for the loss of expectancy, not actual damages
D. Tortious Breach of Contract
1. A person who recovers for duress, is entitled to the same damages as someone
recovering
for fraud or deceit; P can elect the remedy and sue for tort damages
2. There is no tort recovery for a breach of contract, unless it is an insurance contract or
violates an independent duty of tort law
3. Heart Balm Laws- allows families to recover for interference with their familial
relationships
-Jurisdictions have abolished these claims and enacted Anti-Heart Balm laws
IX. Misuse of Legal Proceedings
A. Malicious Prosecution
1. Elements
a. Institution of criminal proceedings
b. Lack of probable cause to initiate proceedings
c. Malice
d. Termination of the proceedings in favor of the accused
e. Damages
2. Initiate criminal proceedings
a. D must be actively involved in beginning or continuing criminal proceedings against
P

27

b. Any formal institution of criminal proceedings will satisfy this element

3. Absence of probable cause
a. Must show D lacked either a reasonable or honest belief in the truth of the charge
b. A reasonable mistake of fact does not show lack of probable cause; but
-Instituting a criminal proceeding when a reasonable person would have
investigated further shows a lack of probable cause
4. Favorable termination
a. Termination means that the criminal proceeding cannot be revived, and that further
prosecution would require a new proceeding
b. Favorable means that the termination was on the merits and in favor of the accused
5. Malice
a. D must have had an improper motive for bringing the action
b. D must have a purpose other than bringing the guilty party to justice
c. Using the threat of prosecution to obtain some advantage from P is a typical
example
of malicious conduct
6. Damages
a. Loss of reputation
b. Emotional distress and humiliation
c. Costs of defending against the criminal charges
7. Defenses
a. As an affirmative defense, D can prove P was in fact guilty of the crime
b. The standard will be proof by a preponderance of the evidence
c. If the guilt of P is established to the jurys satisfaction, its a complete defense
B. Wrongful Civil Proceedings
1. Basics
a. Sometimes called malicious prosecution
b. Elements are essentially the same as for malicious prosecution of a criminal
proceeding
c. Some courts add the requirement of special injury
i. Ex. Initiating a claim without probable cause for an improper purpose
ii. Ex. Injury caused by the seizure of Ps person or property
2. Lack of probable cause is NOT an element
3. Favorable termination of the underlying suit is NOT an element
4. Person needs a good faith basis for thinking his claim is viable, otherwise its a wrongful
civil
proceeding
-Counterclaims can also be wrongful proceedings
5. More controversial than malicious prosecution; courts tend to limit these suits
C. Abuse of Process
1. Basics
a. D must make use of the processes of the court
b. The use must be for a purpose for which the process was not designed
2. Process
a. Process of the court means some enforceable order of the court
b. Merely filing a complaint doesnt constitute abuse of process, but service of the
summons is part of the process of the court and can trigger abuse of process
c. Process includes many orders and proceedings that are part of litigation
i. Discovery
-Using it to harass, abuse, embarrass, etc.
ii. Seizures pursuant to pre-judgment attachments
d. Ex. Suing someone to ruin their reputation while he is trying to sell something

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