Description
For this Assignment, you will assume the role of a junior legal assistant for the legal department of XYZ Corporation. The organization has recently undertaken a number of efforts to increase its presence in the local community and is promoting corporate social responsibility and positive social change initiatives. The CEO, Isabella Torres, feels strongly that in order to have the most beneficial effects in the community, the company needs to set a good example by having a workforce that is serious about compliance and adherence to regulations. She is committed to the idea that in order to “do good,” you have to “be good” in all aspects of the business.
Introduction to Tort Law
In civil litigation, contract and tort claims are by far the most numerous. The law
attempts to adjust for harms done by awarding damages to a successful plaintiff who
demonstrates that the defendant was the cause of the plaintiff’s losses. Torts can be
intentional torts, negligent torts, or strict liability torts. Employers must be aware that in
many circumstances, their employees may create liability in tort. This chapter explains
the different kind of torts, as well as available defenses to tort claims.
Purpose of Tort Laws
LEARNING OBJECTIVES
1. Explain why a sound market system requires tort law.
2. Define a tort and give two examples.
3. Explain the moral basis of tort liability.
4. Understand the purposes of damage awards in tort.
Definition of Tort
The term tort is the French equivalent of the English word wrong. The word tort is also
derived from the Latin word tortum, which means twisted or crooked or wrong, in
contrast to the word rectum,which means straight (rectitude uses that Latin root). Thus
conduct that is twisted or crooked and not straight is a tort. The term was introduced
into the English law by the Norman jurists.
Long ago, tort was used in everyday speech; today it is left to the legal system. A judge
will instruct a jury that a tort is usually defined as a wrong for which the law will provide
a remedy, most often in the form of money damages. The law does not remedy all
“wrongs.” The preceding definition of tort does not reveal the underlying principles that
divide wrongs in the legal sphere from those in the moral sphere. Hurting someone’s
feelings may be more devastating than saying something untrue about him behind his
back; yet the law will not provide a remedy for saying something cruel to someone
directly, while it may provide a remedy for “defaming” someone, orally or in writing, to
others.
Although the word is no longer in general use, tort suits are the stuff of everyday
headlines. More and more people injured by exposure to a variety of risks now seek
redress (some sort of remedy through the courts). Headlines boast of multimillion-dollar
jury awards against doctors who bungled operations, against newspapers that libeled
subjects of stories, and against oil companies that devastate entire ecosystems. All are
examples of tort suits.
The law of torts developed almost entirely in the common-law courts; that is, statutes
passed by legislatures were not the source of law that plaintiffs usually relied on.
Usually, plaintiffs would rely on the common law (judicial decisions). Through thousands
of cases, the courts have fashioned a series of rules that govern the conduct of
individuals in their noncontractual dealings with each other. Through contracts,
individuals can craft their own rights and responsibilities toward each other. In the
absence of contracts, tort law holds individuals legally accountable for the
consequences of their actions. Those who suffer losses at the hands of others can be
compensated.
Many acts (like homicide) are both criminal and tortious. But torts and crimes are
different, and the difference is worth noting. A crime is an act against the people as a
whole. Society punishes the murderer; it does not usually compensate the family of the
victim. Tort law, on the other hand, views the death as a private wrong for which
damages are owed. In a civil case, the tort victim or his family, not the state, brings the
action. The judgment against a defendant in a civil tort suit is usually expressed in
monetary terms, not in terms of prison times or fines, and is the legal system’s way of
trying to make up for the victim’s loss.
Kinds of Torts
There are three kinds of torts: intentional torts, negligent torts, and strict liability torts.
Intentional torts arise from intentional acts, whereas unintentional torts often result from
carelessness (e.g., when a surgical team fails to remove a clamp from a patient’s
abdomen when the operation is finished). Both intentional torts and negligent torts imply
some fault on the part of the defendant. In strict liability torts, by contrast, there may be
no fault at all, but tort law will sometimes require a defendant to make up for the victim’s
losses even where the defendant was not careless and did not intend to do harm.
Dimensions of Tort Liability
There is a clear moral basis for recovery through the legal system where the defendant
has been careless (negligent) or has intentionally caused harm. Using the concepts that
we are free and autonomous beings with basic rights, we can see that when others
interfere with either our freedom or our autonomy, we will usually react negatively. As
the old saying goes, “Your right to swing your arm ends at the tip of my nose.” The law
takes this even one step further: under intentional tort law, if you frighten someone by
swinging your arms toward the tip of her nose, you may have committed the tort of
assault, even if there is no actual touching (battery).
Under a capitalistic market system, rational economic rules also call for no negative
externalities. That is, actions of individuals, either alone or in concert with others, should
not negatively impact third parties. The law will try to compensate third parties who are
harmed by your actions, even as it knows that a money judgment cannot actually mend
a badly injured victim.
Figure 7.1 Dimensions of Tort Liability.
Dimensions of Tort: Fault
Tort principles can be viewed along different dimensions. One is the fault dimension.
Like criminal law, tort law requires a wrongful act by a defendant for the plaintiff to
recover. Unlike criminal law, however, there need not be a specific intent. Since tort law
focuses on injury to the plaintiff, it is less concerned than criminal law about the reasons
for the defendant’s actions. An innocent act or a relatively innocent one may still provide
the basis for liability. Nevertheless, tort law—except for strict liability—relies on
standards of fault, or blameworthiness.
The most obvious standard is willful conduct. If the defendant (often called
the tortfeasor—i.e., the one committing the tort) intentionally injures another, there is
little argument about tort liability. Thus all crimes resulting in injury to a person or
property (murder, assault, arson, etc.) are also torts, and the plaintiff may bring a
separate lawsuit to recover damages for injuries to his person, family, or property.
Most tort suits do not rely on intentional fault. They are based, rather, on negligent
conduct that in the circumstances is careless or poses unreasonable risks of causing
damage. Most automobile accident and medical malpractice suits are examples of
negligence suits.
The fault dimension is a continuum. At one end is the deliberate desire to do injury. The
middle ground is occupied by careless conduct. At the other end is conduct that most
would consider entirely blameless, in the moral sense. The defendant may have
observed all possible precautions and yet still be held liable. This is called strict liability.
An example is that incurred by the manufacturer of a defective product that is placed on
the market despite all possible precautions, including quality-control inspection. In many
states, if the product causes injury, the manufacturer will be held liable.
Dimensions of Tort: Nature of Injury
Tort liability varies by the type of injury caused. The most obvious type is physical harm
to the person (assault, battery, infliction of emotional distress, negligent exposure to
toxic pollutants, wrongful death) or property (trespass, nuisance, arson, interference
with contract). Mental suffering can be redressed if it is a result of physical injury (e.g.,
shock and depression following an automobile accident). A few states now permit
recovery for mental distress alone (a mother’s shock at seeing her son injured by a car
while both were crossing the street). Other protected interests include a person’s
reputation (injured by defamatory statements or writings), privacy (injured by those who
divulge secrets of his personal life), and economic interests (misrepresentation to
secure an economic advantage, certain forms of unfair competition).
Dimensions of Tort: Excuses
A third element in the law of torts is the excuse for committing an apparent wrong. The
law does not condemn every act that ultimately results in injury.
One common rule of exculpation is assumption of risk. A baseball fan who sits along the
third base line close to the infield assumes the risk that a line drive foul ball may fly
toward him and strike him. He will not be permitted to complain in court that the batter
should have been more careful or that management should have either warned him or
put up a protective barrier.
Another excuse is negligence of the plaintiff. If two drivers are careless and hit each
other on the highway, some states will refuse to permit either to recover from the other.
Still another excuse is consent: two boxers in the ring consent to being struck with fists
(but not to being bitten on the ear).
Damages
Since the purpose of tort law is to compensate the victim for harm actually done,
damages are usually measured by the extent of the injury. Expressed in money terms,
these include replacement of property destroyed, compensation for lost wages,
reimbursement for medical expenses, and dollars that are supposed to approximate the
pain that is suffered. Damages for these injuries are called compensatory damages.
In certain instances, the courts will permit an award of punitive damages. As the
word punitiveimplies, the purpose is to punish the defendant’s actions. Because a
punitive award (sometimes called exemplary damages) is at odds with the general
purpose of tort law, it is allowable only in aggravated situations. The law in most states
permits recovery of punitive damages only when the defendant has deliberately
committed a wrong with malicious intent or has otherwise done something outrageous.
Punitive damages are rarely allowed in negligence cases for that reason. But if
someone sets out intentionally and maliciously to hurt another person, punitive
damages may well be appropriate. Punitive damages are intended not only to punish
the wrongdoer, by exacting an additional and sometimes heavy payment (the exact
amount is left to the discretion of jury and judge), but also to deter others from similar
conduct. The punitive damage award has been subject to heavy criticism in recent
years in cases in which it has been awarded against manufacturers. One fear is that
huge damage awards on behalf of a multitude of victims could swiftly bankrupt the
defendant. Unlike compensatory damages, punitive damages are taxable.
LEARNING OBJECTIVES
Whenever a company or individual acts unreasonably and causes injury, that person or
company may be liable for a tort. In some cases it doesn’t matter how careful or
reasonable the company or individual is—they may be liable for any injury resulting from
their actions. Torts are an integral part of our civil law, and in this chapter, you’ll learn
about what kinds of torts exist and how to defend yourself or your company from
potential tort liability. Specifically, you should be able to answer the following questions:
1. What are torts?
2. What are intentional torts, and how does one defend against an accusation of
one?
3. What is negligence and how does it affect virtually all human activity?
4. What is strict liability and how does it affect businesses engaged in making and
selling products?
5. What are the arguments for and against tort reform?
Figure 7.1 A Typical Construction Site
Look at the picture in Figure 7.1 “A Typical Construction Site”. You’ve probably seen
a similar picture of a construction site near where you live, with multiple orange traffic
cones (with reflective stripes so they can be seen at night) and a large sign warning
vehicles not to attempt to drive on the road. Now imagine the picture without the traffic
cones, warning signs, or caution tape. If you were driving, would you still attempt to
drive on this road?
Most of us would probably answer no, since the road is obviously under construction
and attempting to drive on it may result in severe damage to property (our vehicles) and
personal injury. Similarly, pedestrians, skateboarders, and bicyclists will likely steer
clear of this road even if it wasn’t clearly marked or roped off. So if the dangers
associated with this construction are obvious, why would the construction workers go
through the time and expense of setting up the traffic cones, sign, and tape?
The answer has to do with tort law. A tort can be broadly defined as a civil wrong, other
than breach of contract. In other words, a tort is any legally recognizable injury arising
from the conduct (or nonconduct, because in some cases failing to act may be a tort) of
persons or corporations. The other area of civil law that corporations have to be
concerned about is contract law. There are several key differences between torts and
contracts.
First is the realm of possible plaintiffs. In contract law, only persons that you have a
contract with, or you are a third-party-beneficiary to (such as when you are named the
beneficiary to a life insurance policy and the company refuses to pay the claim), can
possibly sue you for breach of contract. In tort law, just about anyone can sue you, as
long as they can establish that you owe them some sort of legally recognized duty. The
second key difference is damages, or remedies. In contract law, damages are usually
not difficult to calculate, as contract law seeks to place the parties in the same position
as if the bargain had been performed (known as compensatory damages).
Compensatory damages also apply in tort law, but they are much more difficult to
calculate. Since money cannot bring the dead back to life or regrow a limb, tort law
seeks to find a suitable monetary equivalent to those losses, which as you can imagine
is a very difficult thing to do. Additionally, tort law generally allows for the award
of punitive damages, something never permitted in contract law.
There is also some intersection between tort law and criminal law. Often, the same
conduct can be both a crime and a tort. If Claire punches Charlie in the gut, for
example, without provocation and for no reason, then Claire has committed the tort of
battery and the crime of battery. In the tort case, Charlie could sue Claire in civil court
for money damages (typically for his pain, suffering, and medical bills). That case would
be tried based on the civil burden of proof—preponderance of the evidence. That same
action, however, could also lead Charlie to file a criminal complaint with the prosecutor’s
office. Society is harmed when citizens punch each other in the gut without provocation
or justification, so the prosecutor may file a criminal case against Claire, where the
people of the state would sue her for the crime of battery. If convicted beyond a
reasonable doubt, Claire may have to pay a fine to the people (the government) and
may lose her liberty. Charlie gets nothing specifically from Claire in the criminal case
other than the general satisfaction of knowing that his attacker has been convicted of a
crime.
You might recall from Chapter 3 “Litigation” that the standard of proving a criminal case
(beyond a reasonable doubt) is far higher than the standard for proving a civil case (a
preponderance of evidence). Therefore, if someone is convicted of a crime, he or she is
also automatically liable in civil tort law under the negligence per se doctrine. For that
reason, criminal defendants who wish to avoid a criminal trial are permitted to plead “no
contest” to the criminal charges, which permits the judge to sentence them as if they
were guilty but preserves the right of the defendant to defend a civil tort suit.
Perhaps more than any other area of law, tort law is a reflection of American societal
values. Contracts are enforced because they protect our expectation that our promises
are enforced. Criminal law is the result of elected legislatures prohibiting behavior that
the community finds offensive or immoral. Tort law, on the other hand, is generally not
the result of legislative debate or committee reports. Each tort case arises out of
different factual situations, and a jury of peers is asked to decide whether or not
the tortfeasor (the person committing the tort) has violated a certain societal norm.
Additionally, we expect that when an employee is working for the employer’s benefit and
commits a tort, the employer should be liable. Under the respondeat superior doctrine,
employers are indeed liable, unless they can demonstrate the employee was on a frolic
and detour at the time he or she committed the tort.
The norms that society protects make up the basis for tort law. For example, we have
an expectation that we have the right to move freely without interference unless
detained pursuant to law. If someone interferes with that right, he or she commits the
tort of false imprisonment. We have an expectation that if someone spills a jug of milk in
a grocery store, the store owners will promptly warn other customers of a slippery floor
and clean up the spill. Failure to do so might constitute the tort of negligence. Likewise,
we expect that the products we purchase for everyday use won’t suddenly and without
explanation injure us, and if that happens then a tort has taken place.
It has been said many times that tort law is a unique feature of American law. In Asian
countries that follow a Buddhist tradition, for example, many people have a belief that
change is a constant part of life and to resist that change is to cause human suffering.
Rather than seeking to blame someone else for change (such as an injury, death, or
damage to personal property), a Buddhist may see it as part of that person’s or thing’s
“nature” to change. In countries with an Islamic tradition, virtually all events are seen as
the will of God, so an accident or tragedy that leads to injury or death is accepted as
part of one’s submission to God. In the United States, however, the tradition is one of
questioning and inquiry when accidents happen. Indeed, it can be said with some truth
that many Americans believe there is no such thing as an accident—if someone is
injured or killed unexpectedly, we almost immediately seek to explain what happened
(and then often place blame).
Torts can be broadly categorized into three categories, depending on the level of intent
demonstrated by the tortfeasor. If the tortfeasor acted with intent to cause the damage
or harm that results from his or her action, then an intentional tort has occurred. If the
tortfeasor didn’t act intentionally but nonetheless failed to act in a way a reasonable
person would have acted, then negligence has taken place. Finally, if the tortfeasor is
engaged in certain activities and someone is injured or killed, then under strict
liability the tortfeasor is held liable no matter how careful or careless he or she may
have been. In this chapter, we’ll explore these three areas of torts carefully so that by
the end of the chapter, you’ll understand the responsibilities tort law imposes on both
persons and corporations. The chapter concludes with a brief discussion of other issues
that affect torts, including tort reform.
Key Takeaways
A tort is a civil wrong (other than breach of contract) arising out of conduct or
nonconduct that violates societal norms as determined by the judicial system. Unlike
contracts and crimes, torts do not require legislative action. Torts protect certain
expectations we cherish in a free society, such as the right to travel freely and to enjoy
our property. There are three primary areas of tort law, classified depending on the level
of intent demonstrated by the tortfeasor.
Assignment: Types of Business Law: Part 1
To support these positive social change initiatives and efforts at ensuring compliance
among XYZ Corporation’s employees, Kate Braverman, Chief Counsel of the Legal
Department, leads the company-wide Business Law and Compliance Fair to showcase
some upcoming policy changes and hold Q&A sessions for all staff members. She asks
you to assist with the Q&A. If someone’s question requires more details than a short
answer can supply, you have been asked to gather the required information and submit
it to your department head for review before passing it along to the requestor.
Part 1: Torts Report
Cameron from the IT department asks the following:
“We developed and have been managing an online professional matching service. The marketing
department provided us with photographs and voice files of 10 individuals that we thought were
safe for use; however, we have since found out that the individuals did not know that their
information was going to be published online and made publicly available. They thought the
service was going to be private, in a password-protected environment. Since the service went live
and the identities were discovered, we have been bombarded with angry phone calls and e-mails
from this group. I need to apologize to these people and discuss this further with my boss, but my
main question is: Did we violate any laws or has my team exposed the company to possible legal
consequences?”
•
•
•
To prepare for this Assignment:
Review the Learning Resources, focusing on the definitions and implications of tort law,
as well as examples of tort law.
Review the Torts Report scenario involving Cameron and his team, which will serve as
the basis for your Assignment this week.
Assignment: Types of Business Law: Part 2
As you will recall from Part 1 you are playing the role of a junior legal assistant for the
legal department of XYZ Corporation.
The organization has recently undertaken a number of efforts to increase its presence in
the local community and is promoting corporate social responsibility and positive social
change initiatives. To support these positive social change initiatives and efforts at
ensuring compliance among XYZ Corporation’s employees, Kate Braverman, Chief
Counsel of the Legal Department, leads the company-wide Business Law and
Compliance Fair to showcase some upcoming policy changes and hold Q&A sessions
for all staff members.
Because you have been asked to assist with the Q&A, this week, you will continue your
work of gathering information to present to staff members. This week, you will focus on
contracts.
Sue is a graphic designer at XYZ Corporation, and she also runs her own business as a
photographer. She says:
“Sorry, this is more personal, but I hope you can give me some advice. I just entered a contract to
photograph the full line of a pottery company, a job that will involve nearly 1,000 photographs.
The contract promises excellent pay, with a specific dollar amount stated in the contract, but
unfortunately, I neglected to include any payment terms. Can you help investigate this for me?”
•
To prepare for this Assignment:
Review the Contract Research Report scenario involving Sue and her photography
business, which will serve as the basis for your Assignment this week.
Submit a Contract Research Report that addresses the following prompt.
Kate approves the request and asks you to help Sue. You will need to research the
dangers that Sue might face by not spelling out the terms of payment within her
contract. Provide her with a research report on these dangers and recommendations
for how to correct this situation, if it is possible. (225–300 words, 3–4 paragraphs)
Note: Be sure to reference at least two scholarly sources to support your work.
Assignment: Types of Business Law: Part 1
To support these positive social change initiatives and efforts at ensuring compliance
among XYZ Corporation’s employees, Kate Braverman, Chief Counsel of the Legal
Department, leads the company-wide Business Law and Compliance Fair to showcase
some upcoming policy changes and hold Q&A sessions for all staff members. She asks
you to assist with the Q&A. If someone’s question requires more details than a short
answer can supply, you have been asked to gather the required information and submit
it to your department head for review before passing it along to the requestor.
Part 1: Torts Report
Cameron from the IT department asks the following:
“We developed and have been managing an online professional matching service. The marketing
department provided us with photographs and voice files of 10 individuals that we thought were
safe for use; however, we have since found out that the individuals did not know that their
information was going to be published online and made publicly available. They thought the
service was going to be private, in a password-protected environment. Since the service went live
and the identities were discovered, we have been bombarded with angry phone calls and e-mails
from this group. I need to apologize to these people and discuss this further with my boss, but my
main question is: Did we violate any laws or has my team exposed the company to possible legal
consequences?”
•
•
•
To prepare for this Assignment:
Review the Learning Resources, focusing on the definitions and implications of tort law,
as well as examples of tort law.
Review the Torts Report scenario involving Cameron and his team, which will serve as
the basis for your Assignment this week.
Assignment: Types of Business Law: Part 2
As you will recall from Part 1 you are playing the role of a junior legal assistant for the
legal department of XYZ Corporation.
The organization has recently undertaken a number of efforts to increase its presence in
the local community and is promoting corporate social responsibility and positive social
change initiatives. To support these positive social change initiatives and efforts at
ensuring compliance among XYZ Corporation’s employees, Kate Braverman, Chief
Counsel of the Legal Department, leads the company-wide Business Law and
Compliance Fair to showcase some upcoming policy changes and hold Q&A sessions
for all staff members.
Because you have been asked to assist with the Q&A, this week, you will continue your
work of gathering information to present to staff members. This week, you will focus on
contracts.
Sue is a graphic designer at XYZ Corporation, and she also runs her own business as a
photographer. She says:
“Sorry, this is more personal, but I hope you can give me some advice. I just entered a contract to
photograph the full line of a pottery company, a job that will involve nearly 1,000 photographs.
The contract promises excellent pay, with a specific dollar amount stated in the contract, but
unfortunately, I neglected to include any payment terms. Can you help investigate this for me?”
•
To prepare for this Assignment:
Review the Contract Research Report scenario involving Sue and her photography
business, which will serve as the basis for your Assignment this week.
Submit a Contract Research Report that addresses the following prompt.
Kate approves the request and asks you to help Sue. You will need to research the
dangers that Sue might face by not spelling out the terms of payment within her
contract. Provide her with a research report on these dangers and recommendations
for how to correct this situation, if it is possible. (225–300 words, 3–4 paragraphs)
Note: Be sure to reference at least two scholarly sources to support your work.
Assignment: Types of Business Law: Part 1
For this Assignment, you will assume the role of a junior legal assistant for the legal department
of XYZ Corporation. The organization has recently undertaken a number of efforts to increase
its presence in the local community and is promoting corporate social responsibility and positive
social change initiatives. The CEO, Isabella Torres, feels strongly that in order to have the most
beneficial effects in the community, the company needs to set a good example by having a
workforce that is serious about compliance and adherence to regulations. She is committed to
the idea that in order to “do good,” you have to “be good” in all aspects of the business.
To support these positive social change initiatives and efforts at ensuring compliance
among XYZ Corporation’s employees, Kate Braverman, Chief Counsel of the Legal
Department, leads the company-wide Business Law and Compliance Fair to showcase
some upcoming policy changes and hold Q&A sessions for all staff members. She asks
you to assist with the Q&A. If someone’s question requires more details than a short
answer can supply, you have been asked to gather the required information and submit
it to your department head for review before passing it along to the requestor.
Part 1: Torts Report
Cameron from the IT department asks the following:
“We developed and have been managing an online professional matching service. The marketing
department provided us with photographs and voice files of 10 individuals that we thought were
safe for use; however, we have since found out that the individuals did not know that their
information was going to be published online and made publicly available. They thought the
service was going to be private, in a password-protected environment. Since the service went live
and the identities were discovered, we have been bombarded with angry phone calls and e-mails
from this group. I need to apologize to these people and discuss this further with my boss, but my
main question is: Did we violate any laws or has my team exposed the company to possible legal
consequences?”
•
•
•
To prepare for this Assignment:
Review the Learning Resources, focusing on the definitions and implications of tort law,
as well as examples of tort law.
Review the Torts Report scenario involving Cameron and his team, which will serve as
the basis for your Assignment this week.
Assignment: Types of Business Law: Part 2
As you will recall from Part 1 you are playing the role of a junior legal assistant for the
legal department of XYZ Corporation.
The organization has recently undertaken a number of efforts to increase its presence in
the local community and is promoting corporate social responsibility and positive social
change initiatives. To support these positive social change initiatives and efforts at
ensuring compliance among XYZ Corporation’s employees, Kate Braverman, Chief
Counsel of the Legal Department, leads the company-wide Business Law and
Compliance Fair to showcase some upcoming policy changes and hold Q&A sessions
for all staff members.
Because you have been asked to assist with the Q&A, this week, you will continue your
work of gathering information to present to staff members. This week, you will focus on
contracts.
Sue is a graphic designer at XYZ Corporation, and she also runs her own business as a
photographer. She says:
“Sorry, this is more personal, but I hope you can give me some advice. I just entered a contract to
photograph the full line of a pottery company, a job that will involve nearly 1,000 photographs.
The contract promises excellent pay, with a specific dollar amount stated in the contract, but
unfortunately, I neglected to include any payment terms. Can you help investigate this for me?”
•
To prepare for this Assignment:
Review the Contract Research Report scenario involving Sue and her photography
business, which will serve as the basis for your Assignment this week.
Submit a Contract Research Report that addresses the following prompt.
Kate approves the request and asks you to help Sue. You will need to research the
dangers that Sue might face by not spelling out the terms of payment within her
contract. Provide her with a research report on these dangers and recommendations
for how to correct this situation, if it is possible. (225–300 words, 3–4 paragraphs)
Note: Be sure to reference at least two scholarly sources to support your work.
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In civil litigation, contract and tort claims are by far the most numerous. The law
attempts to adjust for harms done by awarding damages to a successful plaintiff who
demonstrates that the defendant was the cause of the plaintiff’s losses. Torts can be
intentional torts, negligent torts, or strict liability torts. Employers must be aware that in
many circumstances, their employees may create liability in tort. This chapter explains
the different kind of torts, as well as available defenses to tort claims.
Purpose of Tort Laws
LEARNING OBJECTIVES
1. Explain why a sound market system requires tort law.
2. Define a tort and give two examples.
3. Explain the moral basis of tort liability.
4. Understand the purposes of damage awards in tort.
Definition of Tort
The term tort is the French equivalent of the English word wrong. The word tort is also
derived from the Latin word tortum, which means twisted or crooked or wrong, in
contrast to the word rectum,which means straight (rectitude uses that Latin root). Thus
conduct that is twisted or crooked and not straight is a tort. The term was introduced
into the English law by the Norman jurists.
Long ago, tort was used in everyday speech; today it is left to the legal system. A judge
will instruct a jury that a tort is usually defined as a wrong for which the law will provide
a remedy, most often in the form of money damages. The law does not remedy all
“wrongs.” The preceding definition of tort does not reveal the underlying principles that
divide wrongs in the legal sphere from those in the moral sphere. Hurting someone’s
feelings may be more devastating than saying something untrue about him behind his
back; yet the law will not provide a remedy for saying something cruel to someone
directly, while it may provide a remedy for “defaming” someone, orally or in writing, to
others.
Although the word is no longer in general use, tort suits are the stuff of everyday
headlines. More and more people injured by exposure to a variety of risks now seek
redress (some sort of remedy through the courts). Headlines boast of multimillion-dollar
jury awards against doctors who bungled operations, against newspapers that libeled
subjects of stories, and against oil companies that devastate entire ecosystems. All are
examples of tort suits.
The law of torts developed almost entirely in the common-law courts; that is, statutes
passed by legislatures were not the source of law that plaintiffs usually relied on.
Usually, plaintiffs would rely on the common law (judicial decisions). Through thousands
of cases, the courts have fashioned a series of rules that govern the conduct of
individuals in their noncontractual dealings with each other. Through contracts,
individuals can craft their own rights and responsibilities toward each other. In the
absence of contracts, tort law holds individuals legally accountable for the
consequences of their actions. Those who suffer losses at the hands of others can be
compensated.
Many acts (like homicide) are both criminal and tortious. But torts and crimes are
different, and the difference is worth noting. A crime is an act against the people as a
whole. Society punishes the murderer; it does not usually compensate the family of the
victim. Tort law, on the other hand, views the death as a private wrong for which
damages are owed. In a civil case, the tort victim or his family, not the state, brings the
action. The judgment against a defendant in a civil tort suit is usually expressed in
monetary terms, not in terms of prison times or fines, and is the legal system’s way of
trying to make up for the victim’s loss.
Kinds of Torts
There are three kinds of torts: intentional torts, negligent torts, and strict liability torts.
Intentional torts arise from intentional acts, whereas unintentional torts often result from
carelessness (e.g., when a surgical team fails to remove a clamp from a patient’s
abdomen when the operation is finished). Both intentional torts and negligent torts imply
some fault on the part of the defendant. In strict liability torts, by contrast, there may be
no fault at all, but tort law will sometimes require a defendant to make up for the victim’s
losses even where the defendant was not careless and did not intend to do harm.
Dimensions of Tort Liability
There is a clear moral basis for recovery through the legal system where the defendant
has been careless (negligent) or has intentionally caused harm. Using the concepts that
we are free and autonomous beings with basic rights, we can see that when others
interfere with either our freedom or our autonomy, we will usually react negatively. As
the old saying goes, “Your right to swing your arm ends at the tip of my nose.” The law
takes this even one step further: under intentional tort law, if you frighten someone by
swinging your arms toward the tip of her nose, you may have committed the tort of
assault, even if there is no actual touching (battery).
Under a capitalistic market system, rational economic rules also call for no negative
externalities. That is, actions of individuals, either alone or in concert with others, should
not negatively impact third parties. The law will try to compensate third parties who are
harmed by your actions, even as it knows that a money judgment cannot actually mend
a badly injured victim.
Figure 7.1 Dimensions of Tort Liability.
Dimensions of Tort: Fault
Tort principles can be viewed along different dimensions. One is the fault dimension.
Like criminal law, tort law requires a wrongful act by a defendant for the plaintiff to
recover. Unlike criminal law, however, there need not be a specific intent. Since tort law
focuses on injury to the plaintiff, it is less concerned than criminal law about the reasons
for the defendant’s actions. An innocent act or a relatively innocent one may still provide
the basis for liability. Nevertheless, tort law—except for strict liability—relies on
standards of fault, or blameworthiness.
The most obvious standard is willful conduct. If the defendant (often called
the tortfeasor—i.e., the one committing the tort) intentionally injures another, there is
little argument about tort liability. Thus all crimes resulting in injury to a person or
property (murder, assault, arson, etc.) are also torts, and the plaintiff may bring a
separate lawsuit to recover damages for injuries to his person, family, or property.
Most tort suits do not rely on intentional fault. They are based, rather, on negligent
conduct that in the circumstances is careless or poses unreasonable risks of causing
damage. Most automobile accident and medical malpractice suits are examples of
negligence suits.
The fault dimension is a continuum. At one end is the deliberate desire to do injury. The
middle ground is occupied by careless conduct. At the other end is conduct that most
would consider entirely blameless, in the moral sense. The defendant may have
observed all possible precautions and yet still be held liable. This is called strict liability.
An example is that incurred by the manufacturer of a defective product that is placed on
the market despite all possible precautions, including quality-control inspection. In many
states, if the product causes injury, the manufacturer will be held liable.
Dimensions of Tort: Nature of Injury
Tort liability varies by the type of injury caused. The most obvious type is physical harm
to the person (assault, battery, infliction of emotional distress, negligent exposure to
toxic pollutants, wrongful death) or property (trespass, nuisance, arson, interference
with contract). Mental suffering can be redressed if it is a result of physical injury (e.g.,
shock and depression following an automobile accident). A few states now permit
recovery for mental distress alone (a mother’s shock at seeing her son injured by a car
while both were crossing the street). Other protected interests include a person’s
reputation (injured by defamatory statements or writings), privacy (injured by those who
divulge secrets of his personal life), and economic interests (misrepresentation to
secure an economic advantage, certain forms of unfair competition).
Dimensions of Tort: Excuses
A third element in the law of torts is the excuse for committing an apparent wrong. The
law does not condemn every act that ultimately results in injury.
One common rule of exculpation is assumption of risk. A baseball fan who sits along the
third base line close to the infield assumes the risk that a line drive foul ball may fly
toward him and strike him. He will not be permitted to complain in court that the batter
should have been more careful or that management should have either warned him or
put up a protective barrier.
Another excuse is negligence of the plaintiff. If two drivers are careless and hit each
other on the highway, some states will refuse to permit either to recover from the other.
Still another excuse is consent: two boxers in the ring consent to being struck with fists
(but not to being bitten on the ear).
Damages
Since the purpose of tort law is to compensate the victim for harm actually done,
damages are usually measured by the extent of the injury. Expressed in money terms,
these include replacement of property destroyed, compensation for lost wages,
reimbursement for medical expenses, and dollars that are supposed to approximate the
pain that is suffered. Damages for these injuries are called compensatory damages.
In certain instances, the courts will permit an award of punitive damages. As the
word punitiveimplies, the purpose is to punish the defendant’s actions. Because a
punitive award (sometimes called exemplary damages) is at odds with the general
purpose of tort law, it is allowable only in aggravated situations. The law in most states
permits recovery of punitive damages only when the defendant has deliberately
committed a wrong with malicious intent or has otherwise done something outrageous.
Punitive damages are rarely allowed in negligence cases for that reason. But if
someone sets out intentionally and maliciously to hurt another person, punitive
damages may well be appropriate. Punitive damages are intended not only to punish
the wrongdoer, by exacting an additional and sometimes heavy payment (the exact
amount is left to the discretion of jury and judge), but also to deter others from similar
conduct. The punitive damage award has been subject to heavy criticism in recent
years in cases in which it has been awarded against manufacturers. One fear is that
huge damage awards on behalf of a multitude of victims could swiftly bankrupt the
defendant. Unlike compensatory damages, punitive damages are taxable.
LEARNING OBJECTIVES
Whenever a company or individual acts unreasonably and causes injury, that person or
company may be liable for a tort. In some cases it doesn’t matter how careful or
reasonable the company or individual is—they may be liable for any injury resulting from
their actions. Torts are an integral part of our civil law, and in this chapter, you’ll learn
about what kinds of torts exist and how to defend yourself or your company from
potential tort liability. Specifically, you should be able to answer the following questions:
1. What are torts?
2. What are intentional torts, and how does one defend against an accusation of
one?
3. What is negligence and how does it affect virtually all human activity?
4. What is strict liability and how does it affect businesses engaged in making and
selling products?
5. What are the arguments for and against tort reform?
Figure 7.1 A Typical Construction Site
Look at the picture in Figure 7.1 “A Typical Construction Site”. You’ve probably seen
a similar picture of a construction site near where you live, with multiple orange traffic
cones (with reflective stripes so they can be seen at night) and a large sign warning
vehicles not to attempt to drive on the road. Now imagine the picture without the traffic
cones, warning signs, or caution tape. If you were driving, would you still attempt to
drive on this road?
Most of us would probably answer no, since the road is obviously under construction
and attempting to drive on it may result in severe damage to property (our vehicles) and
personal injury. Similarly, pedestrians, skateboarders, and bicyclists will likely steer
clear of this road even if it wasn’t clearly marked or roped off. So if the dangers
associated with this construction are obvious, why would the construction workers go
through the time and expense of setting up the traffic cones, sign, and tape?
The answer has to do with tort law. A tort can be broadly defined as a civil wrong, other
than breach of contract. In other words, a tort is any legally recognizable injury arising
from the conduct (or nonconduct, because in some cases failing to act may be a tort) of
persons or corporations. The other area of civil law that corporations have to be
concerned about is contract law. There are several key differences between torts and
contracts.
First is the realm of possible plaintiffs. In contract law, only persons that you have a
contract with, or you are a third-party-beneficiary to (such as when you are named the
beneficiary to a life insurance policy and the company refuses to pay the claim), can
possibly sue you for breach of contract. In tort law, just about anyone can sue you, as
long as they can establish that you owe them some sort of legally recognized duty. The
second key difference is damages, or remedies. In contract law, damages are usually
not difficult to calculate, as contract law seeks to place the parties in the same position
as if the bargain had been performed (known as compensatory damages).
Compensatory damages also apply in tort law, but they are much more difficult to
calculate. Since money cannot bring the dead back to life or regrow a limb, tort law
seeks to find a suitable monetary equivalent to those losses, which as you can imagine
is a very difficult thing to do. Additionally, tort law generally allows for the award
of punitive damages, something never permitted in contract law.
There is also some intersection between tort law and criminal law. Often, the same
conduct can be both a crime and a tort. If Claire punches Charlie in the gut, for
example, without provocation and for no reason, then Claire has committed the tort of
battery and the crime of battery. In the tort case, Charlie could sue Claire in civil court
for money damages (typically for his pain, suffering, and medical bills). That case would
be tried based on the civil burden of proof—preponderance of the evidence. That same
action, however, could also lead Charlie to file a criminal complaint with the prosecutor’s
office. Society is harmed when citizens punch each other in the gut without provocation
or justification, so the prosecutor may file a criminal case against Claire, where the
people of the state would sue her for the crime of battery. If convicted beyond a
reasonable doubt, Claire may have to pay a fine to the people (the government) and
may lose her liberty. Charlie gets nothing specifically from Claire in the criminal case
other than the general satisfaction of knowing that his attacker has been convicted of a
crime.
You might recall from Chapter 3 “Litigation” that the standard of proving a criminal case
(beyond a reasonable doubt) is far higher than the standard for proving a civil case (a
preponderance of evidence). Therefore, if someone is convicted of a crime, he or she is
also automatically liable in civil tort law under the negligence per se doctrine. For that
reason, criminal defendants who wish to avoid a criminal trial are permitted to plead “no
contest” to the criminal charges, which permits the judge to sentence them as if they
were guilty but preserves the right of the defendant to defend a civil tort suit.
Perhaps more than any other area of law, tort law is a reflection of American societal
values. Contracts are enforced because they protect our expectation that our promises
are enforced. Criminal law is the result of elected legislatures prohibiting behavior that
the community finds offensive or immoral. Tort law, on the other hand, is generally not
the result of legislative debate or committee reports. Each tort case arises out of
different factual situations, and a jury of peers is asked to decide whether or not
the tortfeasor (the person committing the tort) has violated a certain societal norm.
Additionally, we expect that when an employee is working for the employer’s benefit and
commits a tort, the employer should be liable. Under the respondeat superior doctrine,
employers are indeed liable, unless they can demonstrate the employee was on a frolic
and detour at the time he or she committed the tort.
The norms that society protects make up the basis for tort law. For example, we have
an expectation that we have the right to move freely without interference unless
detained pursuant to law. If someone interferes with that right, he or she commits the
tort of false imprisonment. We have an expectation that if someone spills a jug of milk in
a grocery store, the store owners will promptly warn other customers of a slippery floor
and clean up the spill. Failure to do so might constitute the tort of negligence. Likewise,
we expect that the products we purchase for everyday use won’t suddenly and without
explanation injure us, and if that happens then a tort has taken place.
It has been said many times that tort law is a unique feature of American law. In Asian
countries that follow a Buddhist tradition, for example, many people have a belief that
change is a constant part of life and to resist that change is to cause human suffering.
Rather than seeking to blame someone else for change (such as an injury, death, or
damage to personal property), a Buddhist may see it as part of that person’s or thing’s
“nature” to change. In countries with an Islamic tradition, virtually all events are seen as
the will of God, so an accident or tragedy that leads to injury or death is accepted as
part of one’s submission to God. In the United States, however, the tradition is one of
questioning and inquiry when accidents happen. Indeed, it can be said with some truth
that many Americans believe there is no such thing as an accident—if someone is
injured or killed unexpectedly, we almost immediately seek to explain what happened
(and then often place blame).
Torts can be broadly categorized into three categories, depending on the level of intent
demonstrated by the tortfeasor. If the tortfeasor acted with intent to cause the damage
or harm that results from his or her action, then an intentional tort has occurred. If the
tortfeasor didn’t act intentionally but nonetheless failed to act in a way a reasonable
person would have acted, then negligence has taken place. Finally, if the tortfeasor is
engaged in certain activities and someone is injured or killed, then under strict
liability the tortfeasor is held liable no matter how careful or careless he or she may
have been. In this chapter, we’ll explore these three areas of torts carefully so that by
the end of the chapter, you’ll understand the responsibilities tort law imposes on both
persons and corporations. The chapter concludes with a brief discussion of other issues
that affect torts, including tort reform.
Key Takeaways
A tort is a civil wrong (other than breach of contract) arising out of conduct or
nonconduct that violates societal norms as determined by the judicial system. Unlike
contracts and crimes, torts do not require legislative action. Torts protect certain
expectations we cherish in a free society, such as the right to travel freely and to enjoy
our property. There are three primary areas of tort law, classified depending on the level
of intent demonstrated by the tortfeasor.
Assignment: Types of Business Law: Part 1
To support these positive social change initiatives and efforts at ensuring compliance
among XYZ Corporation’s employees, Kate Braverman, Chief Counsel of the Legal
Department, leads the company-wide Business Law and Compliance Fair to showcase
some upcoming policy changes and hold Q&A sessions for all staff members. She asks
you to assist with the Q&A. If someone’s question requires more details than a short
answer can supply, you have been asked to gather the required information and submit
it to your department head for review before passing it along to the requestor.
Part 1: Torts Report
Cameron from the IT department asks the following:
“We developed and have been managing an online professional matching service. The marketing
department provided us with photographs and voice files of 10 individuals that we thought were
safe for use; however, we have since found out that the individuals did not know that their
information was going to be published online and made publicly available. They thought the
service was going to be private, in a password-protected environment. Since the service went live
and the identities were discovered, we have been bombarded with angry phone calls and e-mails
from this group. I need to apologize to these people and discuss this further with my boss, but my
main question is: Did we violate any laws or has my team exposed the company to possible legal
consequences?”
•
•
•
To prepare for this Assignment:
Review the Learning Resources, focusing on the definitions and implications of tort law,
as well as examples of tort law.
Review the Torts Report scenario involving Cameron and his team, which will serve as
the basis for your Assignment this week.
Assignment: Types of Business Law: Part 2
As you will recall from Part 1 you are playing the role of a junior legal assistant for the
legal department of XYZ Corporation.
The organization has recently undertaken a number of efforts to increase its presence in
the local community and is promoting corporate social responsibility and positive social
change initiatives. To support these positive social change initiatives and efforts at
ensuring compliance among XYZ Corporation’s employees, Kate Braverman, Chief
Counsel of the Legal Department, leads the company-wide Business Law and
Compliance Fair to showcase some upcoming policy changes and hold Q&A sessions
for all staff members.
Because you have been asked to assist with the Q&A, this week, you will continue your
work of gathering information to present to staff members. This week, you will focus on
contracts.
Sue is a graphic designer at XYZ Corporation, and she also runs her own business as a
photographer. She says:
“Sorry, this is more personal, but I hope you can give me some advice. I just entered a contract to
photograph the full line of a pottery company, a job that will involve nearly 1,000 photographs.
The contract promises excellent pay, with a specific dollar amount stated in the contract, but
unfortunately, I neglected to include any payment terms. Can you help investigate this for me?”
•
To prepare for this Assignment:
Review the Contract Research Report scenario involving Sue and her photography
business, which will serve as the basis for your Assignment this week.
Submit a Contract Research Report that addresses the following prompt.
Kate approves the request and asks you to help Sue. You will need to research the
dangers that Sue might face by not spelling out the terms of payment within her
contract. Provide her with a research report on these dangers and recommendations
for how to correct this situation, if it is possible. (225–300 words, 3–4 paragraphs)
Note: Be sure to reference at least two scholarly sources to support your work.
Assignment: Types of Business Law: Part 1
To support these positive social change initiatives and efforts at ensuring compliance
among XYZ Corporation’s employees, Kate Braverman, Chief Counsel of the Legal
Department, leads the company-wide Business Law and Compliance Fair to showcase
some upcoming policy changes and hold Q&A sessions for all staff members. She asks
you to assist with the Q&A. If someone’s question requires more details than a short
answer can supply, you have been asked to gather the required information and submit
it to your department head for review before passing it along to the requestor.
Part 1: Torts Report
Cameron from the IT department asks the following:
“We developed and have been managing an online professional matching service. The marketing
department provided us with photographs and voice files of 10 individuals that we thought were
safe for use; however, we have since found out that the individuals did not know that their
information was going to be published online and made publicly available. They thought the
service was going to be private, in a password-protected environment. Since the service went live
and the identities were discovered, we have been bombarded with angry phone calls and e-mails
from this group. I need to apologize to these people and discuss this further with my boss, but my
main question is: Did we violate any laws or has my team exposed the company to possible legal
consequences?”
•
•
•
To prepare for this Assignment:
Review the Learning Resources, focusing on the definitions and implications of tort law,
as well as examples of tort law.
Review the Torts Report scenario involving Cameron and his team, which will serve as
the basis for your Assignment this week.
Assignment: Types of Business Law: Part 2
As you will recall from Part 1 you are playing the role of a junior legal assistant for the
legal department of XYZ Corporation.
The organization has recently undertaken a number of efforts to increase its presence in
the local community and is promoting corporate social responsibility and positive social
change initiatives. To support these positive social change initiatives and efforts at
ensuring compliance among XYZ Corporation’s employees, Kate Braverman, Chief
Counsel of the Legal Department, leads the company-wide Business Law and
Compliance Fair to showcase some upcoming policy changes and hold Q&A sessions
for all staff members.
Because you have been asked to assist with the Q&A, this week, you will continue your
work of gathering information to present to staff members. This week, you will focus on
contracts.
Sue is a graphic designer at XYZ Corporation, and she also runs her own business as a
photographer. She says:
“Sorry, this is more personal, but I hope you can give me some advice. I just entered a contract to
photograph the full line of a pottery company, a job that will involve nearly 1,000 photographs.
The contract promises excellent pay, with a specific dollar amount stated in the contract, but
unfortunately, I neglected to include any payment terms. Can you help investigate this for me?”
•
To prepare for this Assignment:
Review the Contract Research Report scenario involving Sue and her photography
business, which will serve as the basis for your Assignment this week.
Submit a Contract Research Report that addresses the following prompt.
Kate approves the request and asks you to help Sue. You will need to research the
dangers that Sue might face by not spelling out the terms of payment within her
contract. Provide her with a research report on these dangers and recommendations
for how to correct this situation, if it is possible. (225–300 words, 3–4 paragraphs)
Note: Be sure to reference at least two scholarly sources to support your work.
Assignment: Types of Business Law: Part 1
For this Assignment, you will assume the role of a junior legal assistant for the legal department
of XYZ Corporation. The organization has recently undertaken a number of efforts to increase
its presence in the local community and is promoting corporate social responsibility and positive
social change initiatives. The CEO, Isabella Torres, feels strongly that in order to have the most
beneficial effects in the community, the company needs to set a good example by having a
workforce that is serious about compliance and adherence to regulations. She is committed to
the idea that in order to “do good,” you have to “be good” in all aspects of the business.
To support these positive social change initiatives and efforts at ensuring compliance
among XYZ Corporation’s employees, Kate Braverman, Chief Counsel of the Legal
Department, leads the company-wide Business Law and Compliance Fair to showcase
some upcoming policy changes and hold Q&A sessions for all staff members. She asks
you to assist with the Q&A. If someone’s question requires more details than a short
answer can supply, you have been asked to gather the required information and submit
it to your department head for review before passing it along to the requestor.
Part 1: Torts Report
Cameron from the IT department asks the following:
“We developed and have been managing an online professional matching service. The marketing
department provided us with photographs and voice files of 10 individuals that we thought were
safe for use; however, we have since found out that the individuals did not know that their
information was going to be published online and made publicly available. They thought the
service was going to be private, in a password-protected environment. Since the service went live
and the identities were discovered, we have been bombarded with angry phone calls and e-mails
from this group. I need to apologize to these people and discuss this further with my boss, but my
main question is: Did we violate any laws or has my team exposed the company to possible legal
consequences?”
•
•
•
To prepare for this Assignment:
Review the Learning Resources, focusing on the definitions and implications of tort law,
as well as examples of tort law.
Review the Torts Report scenario involving Cameron and his team, which will serve as
the basis for your Assignment this week.
Assignment: Types of Business Law: Part 2
As you will recall from Part 1 you are playing the role of a junior legal assistant for the
legal department of XYZ Corporation.
The organization has recently undertaken a number of efforts to increase its presence in
the local community and is promoting corporate social responsibility and positive social
change initiatives. To support these positive social change initiatives and efforts at
ensuring compliance among XYZ Corporation’s employees, Kate Braverman, Chief
Counsel of the Legal Department, leads the company-wide Business Law and
Compliance Fair to showcase some upcoming policy changes and hold Q&A sessions
for all staff members.
Because you have been asked to assist with the Q&A, this week, you will continue your
work of gathering information to present to staff members. This week, you will focus on
contracts.
Sue is a graphic designer at XYZ Corporation, and she also runs her own business as a
photographer. She says:
“Sorry, this is more personal, but I hope you can give me some advice. I just entered a contract to
photograph the full line of a pottery company, a job that will involve nearly 1,000 photographs.
The contract promises excellent pay, with a specific dollar amount stated in the contract, but
unfortunately, I neglected to include any payment terms. Can you help investigate this for me?”
•
To prepare for this Assignment:
Review the Contract Research Report scenario involving Sue and her photography
business, which will serve as the basis for your Assignment this week.
Submit a Contract Research Report that addresses the following prompt.
Kate approves the request and asks you to help Sue. You will need to research the
dangers that Sue might face by not spelling out the terms of payment within her
contract. Provide her with a research report on these dangers and recommendations
for how to correct this situation, if it is possible. (225–300 words, 3–4 paragraphs)
Note: Be sure to reference at least two scholarly sources to support your work.
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