Torts Affecting Business

• A woman burned herself after spilling McDonald's hot coffee and only wanted the company to pay her medical bills and for better lids; she was awarded $2.9 million.

Torts Affecting Business

• Torts are civil wrongs where people are compensated.

Three Categories of Torts

• Intentional
• Negligence
• Strict Liability

Intentional Torts

• Include assault, battery, invasion of privacy, and false imprisonment.
• Require intent to bring about a certain type of action.
• If intent to pull a chair is proven, responsibility for the consequences falls on the actor.
• Intentional harmful touching does not necessarily entail consequences.

Assault and Battery

• Assault involves immediate apprehension.
• Battery is touching without consent.
• Words can negate assault.
• Athletics: within the scope of play is acceptable, otherwise, it is tortious battery.
• Harper V. Winston County: touching in an office during a firing.

Intentional Infliction of Mental Distress

• Consists of battery to the emotions, extreme and outrageous conduct, and possible physical symptoms, but states dislike it.

Invasion of Privacy

• Involves misappropriation of name or likeness, intrusion on physical solitude, and public disclosure of highly objectionable private information.
• Ehling V. Monmouth-Ocean Hospital: talking bad about coworkers on Facebook, which only friends could see.

False Imprisonment

• Intent to confine or restrain without consent, such as detaining a shoplifter.

Other Intentional Torts

• Malicious prosecution
• Trespass: entering another's land without consent.
• Conversion: wrongful exercise of control, such as failing to return, damaging, misusing, or changing property.

Defamation

• Oral (slander) or written/published (libel) defamation requires a "Statement" and must be published and false.
• Libel is more harmful than slander.
• Public officials/figures must prove "actual malice".

Fraud

• Intentional misrepresentation of a material fact that is justifiably relied upon, requiring knowledge of the falsity or reckless indifference.
• A "misrepresentation" is a false statement.
• Almost $1 billion in insurance fraud claims after Hurricane Katrina.

Interference with Business Relations

• Injurious Falsehood: Also known as "trade libel," involving comparative advertising.

Intentional Interference with Contractual Relations

• Requires a valid/existing contract, defendant's knowledge of the contract, intentional acts to disrupt the relationship, actual disruption, and resulting damages.

Negligence

• Failure to use reasonable care.

Required Proofs for Negligence (all five)

• Duty of care
• Breach of duty
• Causation in fact ("but for" test requiring the defendant to cause the injury/damage)
• Proximate causation ("foreseeable cause")
• Actual injury

Duty of Care

• A lifeguard on duty is required to act, but a regular person at the beach does not have the same duty.

Res Ipsa Loquitur

• "The thing speaks for itself" - may establish a breach of duty owed and creates a rebuttable presumption of negligence.

Strict Liability

• Imposes legal responsibility for an injury, mostly from intentional or negligent claims.

Palsgraf V. Long Island

• Railroad workers caused a package of explosives to fall and explode, injuring Palsgraf; the railroad was not liable because the package's contents were unforeseeable.

Defenses to Negligence

• Contributory Negligence: Plaintiffs fault
• Assumption of Risk: Plaintiffs knowing and willing undertaking of an activity

Partial Comparative Negligence

• Some states have this, if the plaintiff has more than 50% of the responsibility, they don't receive anything.

Assumption of Risk

• Plaintiff's knowing, willing, and voluntary action.
• Warnings on baseball tickets, safety signs, and at ski places/Yellowstone.

Strict Products Liability

• Applicable to sellers of unjustly dangerous faulty products that cause injury.
• Production Defects: Not created to standards
• Design Defects: Injury caused by unsafe design.

Ultrahazardous Activity

• Includes transporting explosives and poison, keeping dangerous wild animals, and artificial storage of large quantities of liquid.

Damages

• Compensatory Damages: Compensate the plaintiff for injuries suffered, including past/future medical expenses, economic loss, and pain/suffering.
• Punitive Damages: Awarded to punish defendants for intentional torts, extreme willful/wanton negligence, or risky negligent conduct.

Property

• Legal right to exclude others from resources originally possessed/acquired without force, theft, or fraud.
• Absolute but not infinite, with boundaries that can be ambiguous.
• Foundation of the free market, central to societal prosperity, and promotes incentives.
• Makes resources easily divisible and establishes conditions for capital formation.

Two Divisions of Property

• Real property: Land and land interests.
• Personal property: All moveable resources.

Property Boundaries (Physical World)

• Land ownership includes more than surface, air, subsurface, and surface water rights, plus fixtures.
• Air rights require proof of use/connection to land.
• Subsurface Rights: Ownership of rocks/minerals below land.
• Surface Water: East coast utilizes riparian rights, while the west coast employs the "Rule of Capture".

Coastal Oil and Gas V. Garza Energy Trust

• Coastal acts were protected by the "rule of capture" Coastal Oil got a lease on land in Texas, and they are also going to pay royalties, then coastal moves over and stills pays the lease but not the royalties,

Briggs V. Southwestern Energy

• Involved the energy save of the Briggs, while neighbors still got oil under the land.

Fixtures on Land

• A fixture is personal property that cannot be separated from the land.

Types of Ownership

• Fee Simple:
  • Fee simple absolute: No limitations, owner has max legal rights/powers.
  • Fee simple defensible: Condition, executory, conditions for transfer.
• Life Estate: Grants ownership for the lifetime of a specified person; property reverts to grantor or someone else after death.

Types of Ownership

• Leaseholder state: Property rights granted to tenants by a landlord
• Concurrent Ownership (more than one person)
  • Tenancy in Common
  • Joint Tenacy
  • LE-Life Estate
  • TIC-Tenants in common
  • JTWROS=joint tenacy with rights of survivorship (it overrides the will)

Special Applications of Property

• Easements: Right to cross over land
  • Easement by reservation: You buy it
  • Natural easement
  • Negative easement: Prevents landowners from harming neighbors' land.
  • Easement by prescription: Earned right to traverse property – not adverse possession.
  • Utility easement: Utility access rights.

Bailments

• Goods placed into another's possession to be returned/disposed of as instructed by bailor.
  • Bailor: Owner of the object.
  • Bailee: Possessor of the object.

Acquiring Resources Through Exchange

• Contract rules control owner agreements to exchange resources.

Rule of First Possession

• First person to reduce previously unowned things to possession becomes the owner.

Lost vs. Mislaid Items

• Lost: unintentional misplaced.
• Mislaid: intentional placed down, but forgotten.

Adverse Possession

• Provides ownership under state statute when possession is open, notorious, actual, exclusive, continuous, wrongful, and for a prescribed period; permission negates adverse possession; government property cannot be adversely possessed.
• Idea is to punish landowners who don't protect their land.

Acquiring Through Confusion

• Mixed fungible goods.
• Rules for untangling depend on circumstances - honest mistake vs purposeful act.
• Owners hold a proportional share if confusion is by honest mistake.

Accession

• Something added
• Law of Accession: People applying efforts to raw materials own the finished products.

Acquiring Resources Through Gift

• Donor gives to donee, who becomes new owner when donor intends, delivers the gift (physical transfer).
• Testamentary Gift: Made through a will.

Title and Property Registration

• Title: Ownership represented by a physical document registered with the state.

Protections

• Deed and registration statutes
  • Warranty deed: Buyer receives highest protection
  • Special warranty: Seller doesn't guarantee anything.
    • Quitclaim deed: No guarantees
• Security interests: Two types - security interest in land and secured transactions.
• Security interests in Land
  • Mortgages: Two parties, Mortgagee and Mortgager.
  • Deeds of Trusts: Three parties – lender, borrower, and trustee.
  • Land sales contract: Used when someone can't qualify for a tradition loan

Land and Collateral

• Must be in recording/deed office
• Security Interests in Land and Recording Statutes
• Provide notice of the security interest to potential buyers and lenders of the land

Foreclosure

• Creditor must use the court system to ensure procedures are followed properly.

Deficiency

• Balance owed by the debtor to the creditor-mortgagee.
  • Right of redemption: Allows mortgagor to get back land with full debt payment.
• UCCART 9 (only collateral)

Secured Transactions

• Loan from creditor, debtor agrees to give creditor a security interest.
• Collateral: Valuable object
• Article 9 of the Uniform Commercial Code regulates security interests.
• Attachment: Occurs when secured party holds value, debtor owns collateral, and security agreement is provided; secured transactions.
• Perfection can take place when security interest is attached, and creditor has taken the proper steps required by article 9.
• A financing statement must be filed to perfect security interest under Article 9.

Artisans Liens

• (personal Property) and Mechanics Liens (real property).
• Security interests recorded first do not always take priority – there are line Cutters

Nuisance and Zoning

• Public nuisance: Arises from land use causing public inconvenience/damage.
• Private nuisance: Unreasonable use of property causing the substantial interference of another's land.
• Zoning: Cook V. Sullivan; did the Sullivans create a nuisance by filling in wetlands/constructing on their property? Zoning ordinances–residential, commercial, and industrial.

Contract Formation

• Involves legally enforceable promises, which people rely on.
• Contracts are prevalent, but not all promises are enforceable.
• Contracts need not be formal written documents.

Contract Law

• UCC Article 2 only covers the sale of goods that are moveable, tangible resources
• State common law will apply if the contract doesn't involve the sale of goods
• NDA

Classifications of Contracts

• Bilateral: promise for promise.
• Unilateral: promise for action/performance.
• Express: intentions are discussed.
• Implied-in-fact.
• Implied-in-law/quasi-contracts: e.g., overpaying a phone bill requires the company to give it back.

Contract Terms

• Enforceable: All elements present.
• Unenforceable: Defense exists.
• Valid: Enforceable contracts
• Void: Not enforceable
• Voidable: One party has a choice.
• Executed Contract: Parties have performed their promises.
• Executory Contract: Parties have not yet performed agreement.

Requirements for a Contract

• Offer.
• Acceptance.
• Consideration.
• Capacity.
• Legality.

Termination of Offer

• Revocation: Offeror retracts.
• Rejection: Offeree rejects.
• Counteroffer: Rejects first offer, gives another.
• Lapse of time: Deadline missed.
• Subject matter destruction, offeror death/insanity, subject matter illegality.

Acceptance

• The mirror image rule applies.

Consideration

• Something of value given in a contract.
• Receipt of legal benefit or suffering a legal detriment, accord and satisfaction, prior consideration, preexisting obligation, option contract

Promissory Estoppel

• A party who justifiably relies on a gratuitous promise can ask a judge to award compesation.
• requires Promise significant enough to cause promise to act on it, promisee justifiably relied on the promise and suffered significant detriment, relief can only come from fulfilled promise.

Capacity of Parties

• Minors cannot legally be bound to contractual promises, with the exception of necessaries of life
  • contract is voidable at the election of the minor
• Intoxicated or mentally incompetent persons:Contracts are voidable, depending on the person's capacity to understand.

Lawful Purpose

• Contracts for criminal or tortious acts are void. Courts generally don't take action on these.

Defenses to Contract Enforcement

• Improper form when writing is required
• lack of a true meeting of the minds
• Fraud vs. misrepresentation
• Mutual mistake only applies to facts, not value.
• Unilateral one party makes a mistake, it will not prevent the contract.
• Duress
• Undue influence