Busi Law weeks 7-8 notes
Busi Law weeks 7-8 notes ACCT 2700
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This 17 page Class Notes was uploaded by kmb0095 on Friday March 4, 2016. The Class Notes belongs to ACCT 2700 at Auburn University taught by Robert Hollis Cochran in Spring 2016. Since its upload, it has received 26 views. For similar materials see Business Law in Accounting at Auburn University.
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Date Created: 03/04/16
Intro to Law Week 7 2/22/16 “People talk about the middle of the road as though it was unacceptable. Actually, all human problems… come into the gray areas… the middle of the road is all of the usable surface. The extremes, right and left, are in the gutters.” –Dwight D. Eisenhower Ch.6 “God forbid that the rights of the innocent should be lost and destroyed by the offence of individuals.” –Sir John Erdley Wilmot idea of tort law if someone suffers an injury or death or loss of property at the hands of another person and it’s wrongful, tort law is there to help them “(Torts) That great principle of the common law which declares that it is your duty so to use and exercise your own rights as not to cause injury to other people (or their property)” –Williams, J. coming from the direction that YOU have the duty not to hurt anyone else Basis of Tort Law o Tort is a French word for “wrong” o Tort Law – civil wrong for which the law provides a remedy o The basic idea of tort law is to compensate a person wrongfully injured by another person for the injuries incurred (“make the victim whole”) Money is not a perfect compensation for the losses we face, but money is mostly all we can offer to help Money can’t make you whole again but it’s the best we can do o Doing business today involves risk, both legal and financial, from the commission of torts o The greatest tort risk to business today involves vicarious liability Makes an employer liable for the torts of the employee If the employee commits either an intentional tort or unintentional tort in the scope of their employment the employer is liable If you’re at work and commit a tort, the business is liable If you’re at Walmart and commit a tort, Walmart is NOT liable o Types of damages Compensatory (actual or ‘out of pocket’) Ex) lets say someone’s sitting at a red light and you are texting and driving and you hit them, destroy Intro to Law their $30,000 car and cost them $70,000 in medical expenses Compensatory cost – total out of pocket is $100,000 Consequential (special) As a consequence of this accident, they are out of work for the month so they’ve lost whatever they would’ve made while at work (lets say its $5,000) Consequential gives you that money you would lose Consequential cost – (Compensatory + $5,000) = $105,000 General (for something other than a direct monetary loss) Uncommon Mainly for the principal of the action General damages get like $1 Basically that one person wants everyone to know they’ve been wronged despite knowing they’ll get a very small amount of money Punitive (to punish the wrongdoer) Very misunderstood in America, especially today Wrongdoer gets punished with civil damages as well as damages from court o Damages are imperfect but are often the best we can do For the next exam, not responsible for “Tort Reform” section of the textbook Intentional Torts against persons o Tortfeaser (aka wrongdoer) must “intend” to commit the act: he intended the consequences of his act or he knew with substantial certainty that certain consequences would result o (Doctrine of) Transferred Intent intent of tortfeaser is transferred when he intends to harm a person “A” but unintentionally harms person “B” o assault and battery (2 separate torts) assault – causing unreasonable fear of imminent harm of harmful contact ex) go up to someone with a 2x4 and say ‘buddy I’m gonna knock your head off” or pull out a gun and point it at someone no physical contact battery – unlawful, unwelcome contact with another person ex) rape (sexual battery), punching someone in the face, someone sneaking up on you and hitting you with a 2x4 Intro to Law physical contact where there’s a battery, not always an assault drug someone, they wont see it coming so there’s no imminent fear therefore no assault o false imprisonment is the: confinement or restraint of another person’s activities without justification merchants may reasonably detain customers if there is probable cause merchant protection statute: a merchant may detain a suspected shoplifter or thief without being subject to a claim of False Imprisonment if: o the confinement is made with probable cause o the confinement was for a reasonable time o the investigation (including confinement) of the matter was conducted in a reasonable fashion ex) security of a store recognized a guy they’ve arrested before so they kept a close eye on him and saw him stealing again, so they detained him – this is probably clause however, the took him to the detainment room where they searched him & called the cops when the cops went to the room there was a meeting, the cops waited, the guy was handcuffed to the railing in the front of the store in court he pleaded guilty, but then turned around and sued for unreasonable confinement (chained to a wall like an animal for over an hour even though innocent until proven guilty) and won $100,000 o ex) lady wants to exchange for wrong size, waits in line with young daughters, says here’s the item and receipt, helper says give me the bag, go find your size and if y’all can’t find it we’ll refund you o waits in line again, helper switched the clothes, security guards said detained for suspected shoplifting o cops arrive, husband showed up, went to court over the matter Intro to Law o cops even said y’all need to investigate a little more and the security guards said nah we good we investigated enough o she went to trial and was found not guilty, then sues for false imprisonment for no probable clause especially since it happened in front of the daughters o she won $2.3 mil o infliction of emotional distress intentional infliction of emotional distress extreme and outrageous results in severe emotional distress in another really rare ex) man hit a woman and killed her with the first hit then continued to hit her with his car 4 or 5 more times, claimed he had a seizure but court found it as intentional infliction most courts require some physical symptom of illness o defamation involved wrongfully hurting a person’s good reputation law imposes duty to refrain from making false statements of fact about others slander – orally breaching this duty short shelf life doesn’t take long for people to figure out this isn’t true actual damages must be proven to recover for slander libel – breaching it in print or media (and internet) there forever damages are presumed for libel o easier to recover than slander o truth generally is an absolute defense o ex) public figures: if plaintiff is a public figure, plaintiff must show the statement was made with “actual malice” made with either knowledge of falsity or reckless disregard for the truth basically that this person was trying to destroy your reputation exceedingly difficult for a public figure to prevail o invasion of privacy Intro to Law use of person’s name or likeness (except if newsworthy) important for business people to realize can only use a person’s name or likeness for the news, if it isn’t newsworthy then you have the right to your name and likeness ex) bama football player Julio Jones bought a set of tires, the guy who sold him the tires took a picture with him, the newspaper published “Jones shops with this tire store, y’all should too! Roll Tide!” o this looks like he’s endorsing this tire store which is illegal so bama had to spend hundreds of thousands to fix this and protect his eligibility intrusion on Individual’s Affairs or Seclusion Publication of information that places a person in false light (except for political purposes) You can lie all you want to in politics If you figure out a pres candidate had an STD when they were 16 you can go tell the whole world Public disclosure of private facts Ex) a woman was being stalked and wasn’t even aware, she stayed in a hotel and the stalker set up a camera to take pictures through the keyhole – he’s now in jail for invasion of privacy o business torts 2/26/16 “Living on Earth may be expensive, but it includes an annual free trip around the Sun.” –Ashleigh Brilliant o Fraudulent Misrepresentation (Fraud): Misrepresentation of material fact Intent to induce another to rely Justifiable reliance by innocent party Some guy selling a Rolex for $100 on the street Reliance wouldn’t be justifiable there Damages as a result of reliance Casual connection Connection between the lie and the damages Business torts o Wrongful interference with a contractual relationship occurs when: Defendant knows about contract between A and B Intentionally induces either A or B to breach the contract Defendant benefits from the breach Intro to Law Intentional torts against property o Trespass to land Occurs when a person, without permission: Physically enters onto, above or below the surface of another’s land, or Causes anything to enter onto the land, or Remains, or permit anything to remain, on the land Must have damages to recover for the tort Ex) Cochran plans on walking to work, but if he walks around the land it’ll add a half mile, so he asks her if he can walk through the land o She says of course no problem o She died, her sons have the place, they live in like Tampa and somewhere else o They’ve basically never been back to aub since so they’re never at the house o Cochran still walks across the property, technically the crime of trespassing (1/2 tort, must cause damage to be a full tort) because the sons haven’t given permission to walk across o Conversion Aka theft Wrongful possession or use of a property without permission Failure to return property entrusted to the defendant “converting property of the owner’s rightful use to their wrongful use” Negligence o Tortfeaser does not intend the consequences of the act of believes they will not occur o Tortfeasor’s conduct creates a foreseeable risk of injury (to reasonable people – jury) o Ex) BMW vs. Mercedes Benz Cochran driving down Donahue towards college, intent is to drive across college As driving up to the light, the light is green, he thinks that’s probz gonna turn yellow then red Cochran picked out line of decision, if light turns yellow and he hasn’t reached the line, he stops; if it turns yellow after he reaches the line then he wont stop For us, if the light turns yellow we hella speed to get through the yellow/red For us, “yellow = go faster light” Intro to Law Light turns yellow, Cochran stops In the opposite direction, a white BMW comes, the light turns yellow (student with another girl in the right seat), she decides to speed through it but snap decision she slams on breaks in the middle of the intersection Good news: nobody else on the road so she’s fine She has to make a decision, so she backs up A Mercedes Benz pulls up right behind them, when the light turns green she hit the gas but never put it out of reverse She expected it to pull forward but it backed up, she thought she was supposed to be going forward so she put more gas Accordianed BMW, front of the Mercedes Benz was also accordianed, her BMW ended up on top of the Mercedes Benz Insurances companies said they totaled both cars This BMW was her 18 bday present the week before Mercedes Benz ($125,000) BMW ($63,000) so damages for the girl who backed up were around $180,000 but the Mercedes Benz company wanted way more $$$ but BMW didn’t want to pay it so they sued each other She couldn’t understand why she was being sued bc she didn’t mean to do this, it was an accident, “she didn’t mean to” When we were little, that was the go to when we got in trouble so we just got a lecture; now we’re adults, so that doesn’t mean ish now, especially for negligence This was not foreseeable to her, but it was to a jury o Elements of negligence: Duty – defendant owed a Plaintiff a duty of care Breach – defendant breached that duty Duty of care and breach begins with everyone having a duty not to harm others Defendant owes duty to protect Plaintiff from foreseeable risks that Defendant knew or should have known about o A foreseeable risk is one in which the reasonable person would anticipate and guard against it o Duty of Landowners Duty to warn invitees, exercise reasonable care Intro to Law Landlords owe duty of reasonable care to invitees (tenants and guests) for common areas such as stairs and laundry room No duty of reasonable care to trespassers, although you do owe a duty to trespassers not to injure them through gross negligence or willful or wanton conduct Ex) old man in Mobile Early 90’s, 89-year-old living in the house he was born in in Mobile Born in that house, grew up in the house, went to college, graduated and came back to the house Decides to get married, parents give them the house, kids grow up and leave, wife dies, now we have the 89-year-old All he has is social security and the house Wants to move bc the house is old and he wanted new things, neighborhood went down, not a good area of town anymore Wanted to leave but didn’t have the money to leave In his late 70’s, people started burglarizing his house and vandalizing and he got injured a few times, the cops went every night around 2am and looked for burglars One night he got hurt so bad he went to the hospital, when he got back he spray-painted “burglars will get shot” and rigged a shotgun in the back window so when it opens it’ll shoot One night he was sleeping and heard the shot and the bugler was laying there without a face Bugler went to trial and got life in prison Intro to Law He read law books and saw that it was illegal for homeowners to set traps on their property, figured out it was illegal for that old man so he sued Judge told the jury if he set a trap he’s gotta be liable, set damages at $1mil for losing his face What would’ve happened if he set the trap and there was smoke and someone calls the fire department and the firemen are having trouble getting in so they go through the window and the shotgun blew his face off What if it was a runaway teen who was trying to find shelter? Traps are indiscriminate, they don’t know who they’re shooting Anybody could’ve fallen into that trap Week 8 2/29/16 “There are no shortcuts to any place worth going.” “Excellence is not a skill. It is an attitude.” o Duty of Professionals Professional may owe higher duty of care based on special education, skill or intelligence Breach of duty is called professional malpractice Causation – defendant’s breach caused the injury even though Tortfeaser owes a duty of care and breaches the duty of care, the act must have caused the Plaintiff’s injuries Courts ask two questions: o Was the defendant’s action the causation in fact of the plaintiff’s injury, and o Was it the proximate cause of plaintiff’s injury? (this cause added after 1928) When the casual connection between the act of injury is strong enough to impost liability Intro to Law But for test – but for your action, the injury wouldn’t have occurred Once you pass that test, ask if it was foreseeable by a reasonable person Foreseeable because: Palsgraf v. Long Island Railroad Co. This guy drops a package trying to get on the train and it explodes, doesn’t hurt anyone near the blast but the shockwaves shake the scales holding tons of packages 100 ft. back by Miss Palsgraf She was very injured, may not walk again She sues Long Island Railroad for negligence: they failed to help the man on the railroad which caused him to drop the package If they did their job, he wouldn’t have dropped the package, she wouldn’t have been severely hurt Back then, there was none of the foreseeability issues so that’s all that was needed The judge in this case said something’s up, the railroad did something they’ve always done, rushing people on the train, and there was no way to know that package would’ve exploded because it wasn’t labeled to warn The judge said it wasn’t foreseeable so he imposed the rule of foreseeability that divided causation into two parts: are you the actual & proximate cause - could what you did have caused a foreseeable injury? She sued Long Island Railroad but the guy who had the package was definitely liable, he was carrying around experimental fireworks and he knew they’d explode Intro to Law She sued the company because she knew they had the moneyyyyyyy Ex) frat party problem 2 story houses, stairwell in the living room social in the house one Friday night nice darty a pledge is on the second floor leaning on the rail looking at the darty pledges aren’t allowed to lean on rails, one of the brothers comes in with a date named Julie the pledge and Julie were classmates in high school, now he’s the pledge he’s the date the pledge says hey Julie, so she looks up to see who called her name people slapped each other on the back of the head when they weren’t paying attention as Julie was looking up, a brother went up and slapped the pledge on the back of the head causing the pledge’s right eye to pop out, Julie passes out, ended up with a concussion and 19 stitches Punchline: the pledge had a glass eye which nobody knew, Julie didn’t even know, they just assumed he had a lazy eye Julie’s father was an attorney Cochran knew her father, asked the dad why he didn’t sue No proximate cause, couldn’t have sustained a negligence case People slapped the back of their heads for years, no way to know his eye would’ve popped out and Julie would’ve fainted Ex) 3 guys go bowling Intro to Law o someone’s gotta fill up gas so they’ll be 10 min late o Person who’s late is 40 min late, still not there, the 2 guys there drink beer and are through their second round o Got frustrated and they’re drunk, they’re like okay if he walks in I’m gonna throw a bowling ball at this guy o The late guy walks in o The drunk guy rolls the bowling ball down the walkway towards the late guy o Late guy picks it up and walks it back o What would happen if the late guy had seen the bowling ball, gets out of the way and the ball broke some lady’s ankle o Would the drunk guy be at fault? o Look at causation – yes, he is liable because if it wasn’t for his action that injury wouldn’t have occurred o If someone else would’ve rolled it then clearly he wouldn’t have been liable Damages – plaintiff suffered legal injury o Special Negligence Doctrines Alter the normal requirements of negligence in some way: Dram Shop Acts o Dram Shop – bar or tavern, serves liquor for immediate consumption (Sky bar, Applebee’s bar) Criminal offense and tort to over serve someone Dram shop violation – someone’s over served, drove, killed someone Only violation if someone is injured/killed in result from someone being over served The people who served the alcohol are liable along with the DUI guy Aub has never been hit with one, Ttown has like 4 or 5 a year, Nashville has tonnnnnssssss Social Host Liability o If you have someone at your house, they get drunk as hell (off your liquor or their own) and they go drive and injure someone, they can sue the host Intro to Law 3/4/16 “If you wish the sympathy of broad masses, then you must tell then the crudest and most stupid things.” –Adolf Hitler Res Ipsa Loquitor o “truth speaks for itself” o ex) in London, a couple sees someone laying in the road this person is badly injured – broken wooden barrel and very strong aroma of whrdkey in puddles around them 3 floor was an industrial window opening, they could see the barrels in the window calls emergency services and took him to hospital, in a coma for 6 weeks cops asked questions, he doesn’t know he talks to an attorney; attorney wants to put a negligence case together but he couldn’t piece it all together obvious the barrel came from the warehouse goes to court for negligence, judge says okay ready to prove negligence? attorney says well no there aren’t enough pieces but let me explain what happened, says problem proving the breach – no evidence, owner denies there was anyone in the warehouse someone could’ve intentionally hurt him & that’d be an intentional tort but that doesn’t make sense BUT there must be negligence – warehouse stacks the barrels, supposed to be secured but something happened to make the barrel fall Judge says yes that makes sense, very convincing argument, I’m going to fine the defendant, I’ll call this under the doctrine of Res Ipsa Loquitor If the defendant was under complete control of the thing that caused the injury/death and there were no other factors, then we will render the judgment for the plaintiff without having to prove all the pieces of negligence Intro to Law o Ex) small aircraft On final to Buffalo intl. airport Stormy winter day Snow, ice, sleet, wind Nobody could see anything but that’s typical 3mi out from the runway, requested clearance to land, tower said yeah clear to land didn’t hear anything else from the aircraft found a small hole in the ground, no evidence as to what happened to the aircraft but the aircraft must have dived down there no terrorism, no evidence that there was any kind of explosion conclusion that the aircraft must have iced up, stalled and fell in the hole hypothetical conclusions: dismiss weather bc airlines fly in all kinds of weather, failure of the pilots to handle the weather causes accidents ultimately it comes back to the airline, no other explanation besides the airline was responsible survivors of the victims (all died) claimed Res Ipsa Loquitor because they couldn’t claim negligence Negligence Per Se o Know the difference between this and Res Ipsa Loquitor because they will get confusing on the exam o Easy cases for lawyers o If there is a statute that was passed to prevent the exact type of injury/death that occurred and someone violates that statute and causes an injury/death o Ex) traffic laws Speed limits are set to prevent and reduce number of injuries and accidents Speed limits low [25mph] on University (may seem too low) because there’s a lot of pedestrians, who have a right of way Intro to Law Police on a regular basis go do traffic surveys, looking for something (speeding) and try to figure out if they need more enforcement in that area Ex) police unit on Samford lawn, clocking speed without ticketing Avg. speed 30mph then they’d need more enforcement Truck had been trying to get through Toomer’s corner, truck speeds 35mph when the accident happened Pedestrian listening to loud music, wasn’t paying attention, didn’t hear the truck, truck hit him Very serious injury, he wants to sue the truck driver When through in criminal court and found guilty, file a case in civil court Judge this is a Negligence Per Se case, we want the judgment in the amount of however much $, judge sees he’s guilty in criminal court, says yes he’s guilty Even people J walking are innocent; cars can’t drive where people are Ex) girl J walking Guy speeds through a red around a corner, doesn’t see the girl and hits her Seriously injured, may not be walking now They can tell he was speeding bc skid marks He did jail time for this Good Samaritan Statues o Every state has these o Applies to doctors and medical professionals o All statues say: if you are a medical professional and you come up on a medical accident scene, you should help but if something happens you are not liable for ordinary negligence Intro to Law o Ex) Emergency room doctor headed into her shift, dark stormy night Sees an accident, accident victim lying on the side of the road Should she help? Society would say yes Every capable to help should help, if those people didn’t have protection then they wouldn’t help they would just leave victims to die Very stormy night, sees that a car has run off the road, sees a body half in the ditch and there’s people screaming Doctor stops and helps, figures out it’s the kids, mother and mother-in-law screaming Realizes the guy is breathing and continues CPR Forgets to lift the guys neck and make sure he’s breathing; his heart was beating but he suffocated Ordinary negligence – huge difference between operating on someone on the side of the road in bad conditions vs. in the operating room with bright lights and people and resources Society recognizes she’s out of her element, so she is shielded from liability Let’s say the victim was bleeding from the nose and the doctor says okay let’s stop the bleeding and ties something around their neck, that is negligence and they would be held liable bc that’s stupid Skip ch. 7 and 9 Only ch. 4, 6, 8 (Panopto) and 10 on exam o Defenses to Negligence Assumption of risk Superseding intervening cause Contributory or comparative negligence There’s risk in everything we do Only use this if there is no insurance is available in the activity you’re doing Ex) bar that had a mechanical bull, around the bull there was 3 ft. of padding all around o Everyone was trying to go 8 seconds on the bull Intro to Law o Some girl comes in and says she can make it o She gets in line and before getting on the bull, she has to sign a waiver saying despite the protection she could still get injured or die, no insurance probably not even hers could cover this, so if she’s injured she can’t sue, so she signed o She rode for the shortest time possible, she hit the padding at an awkward angle, and to this day she is a paraplegic, broke her neck o She sues, the company said she signed a waiver o Court decided she was in the wrong and she got no recovery from anyone Ex) tailgate last year o Cochran’s daughter called, she works in Disney World o She said she went sky diving today o He asked if she had to sign papers, she said she basically signed her rights away to everything but it was worth it o They wouldn’t be liable if she was hurt, insurance wouldn’t help either
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