FUNDAMENTALS OF

BUSINESS LAW, 10E

R O G E R L E R OY M I L L E R

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 TORT LAW
CHAPTER 4

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 LEARNING OBJECTIVES

1. What is the purpose of tort law?

What types of damages are
available in tort lawsuits?
2. What are two basic categories of
torts?
3. What is defamation? Name two
types of defamation.

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 LEARNING OBJECTIVES (CONT’D)

4. Identify the four elements of

negligence.
5. What is meant by strict liability? In
what circumstances is strict liability
applied?

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 INTRODUCTION

• Torts are wrongful actions. The word

tort is French for “wrong.” Through
tort law, society tries to ensure that
those who have suffered injuries as a
result of the wrongful conduct of
others receive compensation from
the wrongdoers.
• Many of the lawsuits brought by or
against business firms are based on
the tort laws.
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 THE BASIS OF TORT LAW

• The Purpose of Tort Law

• To provide remedies for acts that cause:
• Physical injury or interfere with physical security and
freedom.
• Destruction or damage to property.
• Harm to intangible interests, such as personal privacy,
family relations, reputation, and dignity.

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 THE BASIS OF TORT LAW

• Damages Available in Tort Actions

• Compensatory damages—intended to
compensate or reimburse plaintiffs for
actual losses.
• Punitive damages—may also be
awarded to punish the wrongdoer and
deter others.
• Tort Reform
• Types of reform
• Federal reform
• State reform
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 THE BASIS OF TORT LAW

• Classifications of Torts
• Intentional torts result from the
intentional violation of person or
property (fault plus intent).
• Unintentional torts (torts involving
negligence) result from breach of a duty
to act reasonably (fault without intent).
• Defenses
• Reasons why the plaintiff should not
obtain damages.
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 INTENTIONAL TORTS
AGAINST PERSONS
• Intentional torts against persons:
• Assault and battery
• False imprisonment
• Intentional infliction of emotional distress
• Defamation (libel or slander)
• Invasion of privacy
• Fraudulent misrepresentation
• Abusive or frivolous litigation
• Wrongful interference

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 INTENTIONAL TORTS
AGAINST PERSONS
• Assault and Battery
• An assault is an unexcused and intentional act
that causes another person to fear immediate
harm.
• A battery is an assault that results in physical
contact.
• Example: Threatening someone with a gun is an
assault. Firing the gun (if the bullet hits the
victim) is a battery.

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 INTENTIONAL TORTS
AGAINST PERSONS
• False Imprisonment
• The intentional confinement or restraint of
another person’s movement without
justification is false imprisonment.
• The person under restraint does not wish to be
restrained.
• Undue force or unreasonable detention can lead
to liability for a person or business.

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 INTENTIONAL TORTS
AGAINST PERSONS
• Intentional Infliction of Emotional
Distress
• An extreme and outrageous act, intentionally
committed, that results in severe emotional
distress to another.
• To be actionable (capable of serving as the
ground for a lawsuit), the conduct must be so
extreme and outrageous that it exceeds the
bounds of decency, such as stalking
accompanied by threats.

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 INTENTIONAL TORTS
AGAINST PERSONS
• Defamation
• Defamation of character involves
wrongfully hurting a person’s good
reputation.
• Libel—written or another permanent
form, such as a digital recording
• Slander—oral

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 INTENTIONAL TORTS
AGAINST PERSONS
• Invasion of Privacy
• Wrongful intrusion into a person’s private
activities
• Publication of information that places a person
in a false light
• Disclosure of private facts that an ordinary
person would find objectionable
• Using a person’s name, picture, or other
likeness for commercial purposes without
permission

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 INTENTIONAL TORTS
AGAINST PERSONS
• Fraudulent Misrepresentation
• A false representation made by one party,
through misstatement of facts or through
conduct.
• The intention is to deceive the other party to his
or her detriment.
• Negligent misrepresentation occurs when a
person supplies information without having a
reasonable basis for believing its truthfulness.

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 INTENTIONAL TORTS
AGAINST PERSONS
• Abusive or Frivolous Litigation
• Malicious prosecution—When a person initiates
a lawsuit out of malice and without probable
cause, and loses the suit
• Abuse of process—When a person uses a legal
process against another improperly or to
accomplish a purpose for which it was not
designed

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 INTENTIONAL TORTS
AGAINST PERSONS
• Wrongful Interference
• The knowing, intentional interference by a third
party between other parties for the purpose of
advancing the economic interests of the third
party
• Business torts involving wrongful interference
are generally divided into two categories:
• A contractual relationship
• A business relationship

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 INTENTIONAL TORTS
AGAINST PROPERTY
• Wrongful actions that interfere with
individuals’ legally recognized rights
with regard to their land or personal
property include:
• Trespass to land
• Trespass to personal property
• Conversion
• Disparagement of property

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 INTENTIONAL TORTS
AGAINST PROPERTY
• Trespass to Land
• Trespass to land is the invasion of
another’s real property without consent
or privilege.
• Examples: Walking or driving on
someone else’s land without permission
or constructing a building so that part of
it is on your neighbor’s property.

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 INTENTIONAL TORTS
AGAINST PROPERTY
• Trespass to Personal Property
• Trespass to personal property is unlawfully
damaging or interfering with the owners’ rights
to use, possess, or enjoy their personal
property.
• Example: Kelly takes Ryan’s business law book
as a practical joke and hides it so that Ryan is
unable to find it for several days before the final
examination.

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 INTENTIONAL TORTS
AGAINST PROPERTY
• Conversion
• Conversion is wrongfully taking or using the
personal property of another without
permission.
• Conversion is the civil side of crimes related to
theft, but it is not limited to theft.
• Example: Mark takes Stan’s iPad and gives it to
someone else, which is personal trespass, but if
he refuses to return it to Stan, it is conversion.

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 INTENTIONAL TORTS
AGAINST PROPERTY
• Disparagement of Property
• Any economically injurious falsehood that is
made about another’s product or property.
• The term includes:
• Slander of quality—publication of false information about another’s
product, alleging that it is not what its seller claims
• Slander of title—publication casts doubt on another’s legal
ownership of a property, and the property’s owner suffers financial
loss as a result

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 NEGLIGENCE

• The tort of negligence occurs when

someone suffers injury because of
another’s failure to live up to a
required duty of care.
• Central to the tort of negligence is the
concept of a duty of care, the principle
that people are free to act as they please
so long as their actions do not infringe
on the interests of others.

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 NEGLIGENCE

• When someone fails to comply with

the duty to exercise reasonable care,
a potential tort may have been
committed.
• The tortfeasor neither wishes to
bring about the consequences of the
act nor believes that they will occur.

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 NEGLIGENCE

• In order to succeed in a negligence

action, the plaintiff must prove:
1. Duty
2. Breach
3. Causation
4. Damages

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 NEGLIGENCE

• Defendants often assert that

plaintiffs failed to prove the
existence of one or more of the
required elements for negligence.
• Basic affirmative defenses are:
•Assumption of risk
•Superseding cause
•Contributory or comparative negligence

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 NEGLIGENCE

• Special Negligence Doctrines and

Statutes
• Res ipsa loquitur
• Negligence per se
• Special negligence

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 NEGLIGENCE

• Res ipsa loquitur—plaintiff need

not prove negligence on the part of
the defendant because “the facts
speak for themselves”
• Negligence per se—when a person
violates a statute or an ordinance
and the violation causes another to
suffer the kind of injury that the
statute or ordinance was intended to
prevent
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 NEGLIGENCE

• Special negligence—prescribe
duties and responsibilities in certain
circumstances
• Violation of these statutes will impose
civil liability.
• Examples of special negligence statutes:
dram shop acts and Good Samaritan
statutes are examples.

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 STRICT LIABILITY

• Under the doctrine of strict liability,

a person may be held liable,
regardless of the degree of care
exercised, for damages or injuries
caused by their product or activity.

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 STRICT LIABILITY

• Strict liability includes liability for

harms caused by:
• Abnormally dangerous activities
• Exotic or domestic animals
• Defective products (product liability)

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service or otherwise on a password-protected website for classroom use.