Business Law Week 6 Notes
Business Law Week 6 Notes ACCT 2700 - 001
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This 8 page Class Notes was uploaded by Caspian Roberts on Tuesday March 22, 2016. The Class Notes belongs to ACCT 2700 - 001 at Auburn University taught by Robert Hollis Cochran in Fall 2015. Since its upload, it has received 91 views. For similar materials see Business Law in Accounting at Auburn University.
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Date Created: 03/22/16
“God forbid that the rights of the innocent should be lost and destroyed by the offence of individuals.” - Sir John Erdley Wilmot (English jurist, Chief Justice; Mayor etc., of Colchester v. Seaber (1765) 3 Burr. Part IV) Basis of Tort Law: Tort is a French word for “wrong” A tort is a civil wrong for which the law provides a remedy Doing business today involves risks, both legal and financial, from the commission of torts. The greatest tort risk to business today involves vicarious liability Vicarious liability makes and 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 The basic idea of tort law is to compensate a person inured by another person for the injuries incurred. (“Make the victim whole.”) Types of Damages (To make the victim whole): o Compensatory (Actual or “Out of Pocket”) o Consequential (Special) o General (for something other than a direct monetary loss) o Punitive (to punish the wrongdoer) Damages are imperfect but are often the best we can do Intentional Torts Against Persons: Tortfeasor is the person committing the tort The Tortfeasor must “intend” to commit the act o He intended the consequences of his act; or o He knew with substantial certainty that certain consequences would result Bubba Bank Case Bubba brought a gun to the bank robbery to scare everyone There was a guard at the bank he did not know about Guard pulls his gun, so Bubba fires first Bubba misses the guard, and kills Old Woman Bubba did not mean to kill her, only the guard This is an example of Transferred Intent o Transferred Intent Intent of Tortfeasor is transferred when he intends to harm person “A” but unintentionally harms person “B” Assault and Battery (2 torts) o Assault – raising the fear of imminent, harmful contact in another Assault is often found in Stalking Cases o Battery - the unauthorized, unwelcome, or illegal contact with a person False Imprisonment o Confinement of restraint of another persons activities without reason o Merchant Protection Statute: A merchant may detain a suspected shoplifter or thief without being subject to a claim of False Imprisonment if The confinement s made with probable cause The confinement was for a reasonable time The investigation (including confinement) of the matter was conducted in a reasonable fashion Infliction of Emotional Distress o Extreme and outrageous o Results in severe emotional distress in another o Most courts require some physical symptom or illness Defamation o Defamation involves wrongfully hurting a person’s good reputation o Law imposes duty to refrain from making false statements of fact about others o Slander – oral defamation Very Different to Recover for Short shelf life o Libel – any permanent, hard form of defamation (writing, audio copy, etc.) Much Easier to Recover for o Actual damages must be proven to recover for slander. Damages are presumed for libel. Therefore, it’s easier to recover for libel than slander o Truth is generally an absolute defense o 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 (Exceedingly difficult for a public figure to prevail) Invasion of Privacy o Use of Person’s Name or Likeness (Except if newsworthy) o Intrusion on Individual’s Affairs or Seclusion o Publication of Information that Places a Person in False Light (except for political purposes) o Public Disclosure of Private Facts Business Torts Fraudulent Misrepresentation (Fraud) o Misrepresentation of material fact o Intent to induce another to reply o Justifiable reliance by innocent party o Damages as a result of reliance o Casual Connection Sample Questions: T/F Vicarious liability means a business will only be responsible for the intentional torts of its employees False – it’s ALL TORTS T/F Tort law is designed to protect a person from injury False – it’s to compensate them after the injury “If you wish to have sympathy of broad masses, then you must tell them the crudest and most stupid things.” - Adolf Hitler, Mein Kampf Business Torts Wrongful Interference with a Contractual Relationship occurs when: o Defendant knows about contract between A and B o Intentionally induces either A or B to breach the contract o Defendant benefits from breach Intentional Torts Against Property Trespass to Land o Occurs when a person, without permission: Physically enters onto, above, or below the surface of another’s land Causes anything to enter onto the land Remains, permits anything to remain on the land Must have damages to recover for the tort Conversion o Wrongful possession or use of property without permission o Failure to return property entrusted to the defendant Negligence Tortfeasor does not intend the consequences of the act or believes they will not occur Tortfeasor’s conduct creates a foreseeable risk of injury o Ex: BMW vs Mercedes Comical representation of an accident in which a woman in a BMW reversed into and on top of a Mercedes Benz, completely totaling both cars Even though it was just an accident, and she didn’t “mean to do it”, she still owed the damages Elements of Negligence: o Duty: Defendant owed Plaintiff a duty of care o Breach: Defendant breached that duty o Causation: Defendant’s breach caused the injury o Damages: Plaintiff suffered legal injury Duty of Care and Breach o Defendant owes duty to protect Plaintiff from foreseeable risks that Defendant knew or should have known about 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 Landlords owe duty of reasonable care to invitees (tenants and guests) for common areas such as stairs and laundry rooms 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 o Duty of Professionals Professionals may owe higher duty of care based on special education, skill, or intelligence Breach of duty is called professional malpractice Causation o Even though a Tortfeasor owes a duty of care and breaches the duty of care, the act must have caused the Plaintiff’s injuries o Courts ask 2 questions: Was the defendant’s action the causation in fact of plaintiff’s injury Was it the proximate cause of plaintiff’s injury Proximate Cause: When the causal connection between the act and injury is strong enough to impose liability Case 6.2 Palsgraf v Long Island Railroad Co (1928) Special Negligence Doctrines Special Negligence doctrines alter the normal requirements of negligence in some way o Res Ipsa Loquitor This guy is found passed out in a street with a large barrel of whiskey by him He wakes up from this coma and has no idea what happened It was proven that negligence occurred, even though they didn’t know how the barrel fell out the window “The thing speaks for itself” o Negligence Per Se Traffic laws are made to reduce the likelihood of injury or death If you have already been convicted in a Criminal Court, then in Civil Court all you do is plead Negligence Per Se to get a Guilty verdict o Good Samaritan Statutes Protect medical professionals from negligence at accident scenes If an Emergency Room Surgeon was on his way to his shift and he sees an accident, he stops at the accident to try and help, but he unfortunately can’t resuscitate him, then this doctrine protects him from negligence o Dram Shop Acts Dram Shop is anywhere that sells alcohol (Taverns) If you overserve someone, they get in a car, hurt or kill someone, then you can be responsible o Social Host Liability Defense to Negligence Assumption of Risk o Pretty much everything you do has a risk o You can only assume the risk of an activity if it’s an extremely risky activity, you know that it is, and you do it anyway o You can’t get insurance for it Superseding Intervening Cause o Case: A driver runs a red light and breaks someone’s leg o The person who’s leg is broken gets in an ambulance o Another car hits the ambulance and kills the guy o The original guy that runs the light and breaks the guys leg is not responsible for killing him Contributory Negligence o Old Common Law doctrine now only used in 2 states o Under the doctrine, a plaintiff wo contributed to his own injury cannot recover anything from the defendant o EX : Speeding and Running a Red Light Comparative Negligence o 48 States have replaced contributory negligence with the doctrine of comparative negligence o Comparative Negligence computes liability of Plaintiff and Defendant and apportions damages appropriately o He gets a percentage of the damages Sample Questions Since virtually all injuries cause emotional hurt, its almost automatic that torts result in additional damages for the intentional infliction of emotional distress False Slander is easier to recover damages for than libel False Our society imposes upon you a duty not to injure anyone True Too be held liable for negligence the likelihood that your conduct or action would cause an injury must have been foreseeable to you False As with intentional torts, to recover for negligence you must cause an actual injury or damage to another or another’s property False You were speeding at Stanford Hall and hit and injure someone. The pedestrian’s best legal theory to use to obtain a judgement against you is: Negligence Per Se “The real significance of crime is in its being a breach of faith with the community of mankind.” - Joseph Conrad, Lord Jim, 1900 Civil and Criminal Law Major Differences Burden of proof: o The amount of proof necessary to make a conviction o In criminal law, it has to be “beyond all reasonable doubt” o In civil law, it has to be above 50% = preponderance o More Burden of Proof on Criminal Cases than Civil Cases o In criminal law, if the defendant is found to commit the act, they are guilty o In civil law, if the defendant is found to commit the act, they are liable One Crime can subject you to Both Civil and Criminal Trials o Double Jeopardy is only effective in Criminal Trials Classification of Crimes: o Felonies: Serious crimes, punishable by Death or prison for more than one year and/or by fines o Misdemeanors: Non-serious (petty) crimes punishable by ail for less than one year and/or by fines “Don’t look at it like it’s not serious. This can be a killer in your life. This can be the difference from getting or not getting a job” o Violations: Violation of city, county minor traffic/good order ordinances Criminal Liability To be convicted of a crime, a person must: o Commit a guilty act The guilty act is known as the “actus reus” o Have the guilty mind or mental state during commission of the guilty act The mental state is known as the “mens rea” Common Law Thought: o And must meet the other elements of the crime More on Mens Rea: o Required intent (or mental state) is indicated in the applicable statute or law: Specific Intent General Intent Criminal Negligence or Recklessness (unjustified, substantial and foreseeable risk that results in harm) No intent (Strict Liability) State of Mind: o State of Mind: Strict Liability and Overcriminalization Federal code lists over 4,000 criminal offenses, many do not list as “mental state” Strict Liability crimes are found in environmental, drug laws that affect public health, safety, and welfare Corporate Criminal Liability: o A Corporation itself cannot be imprisoned but can be convicted of crime through acts of its officers o Corporations may be convicted if: Crime is within agent or employee’s scope of employment; or Crime authorized or requested by corporate principal/officer Liability of Corporate Officers and Directors: o Corporate officers and directors are personally liable for crimes either they or their agents commit under the “responsible corporate officer” doctrine Types of Crimes Violent Crime o Murder, sexual assault, rape, robbery Property Crime o Burglary o Larceny/Robbery o Receiving Stolen Goods o Arson o Forgery Burglary = unauthorized entry into an area with evil intent (harm to people or property) Larceny = stealing somebody’s property without violence or the threat of violence Robbery = stealing somebody’s property by causing violence or threatening violence (don’t even have to have a weapon)