Chapter 10 – Torts Affecting Business
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Why “the crucial controversy in personal injury torts today” is the area of damages.
For dramatic examples of the size of recent awards, refer to Sidebar 10.11.
A. Compensatory Damages
Emphasize:
Discuss how cases with strange-sounding facts and damages lead to run-away-litigation
stories. One of the best-known such cases occurred in 1994 when a New Mexico
woman was awarded $2.7 million after suing McDonald’s for burns suffered when
coffee she bought at a drive-through window spilled in her lap. A judge later lowered
the award to under $500,000. Before trial, the plaintiff had offered to settle the case for
B. Punitive Damages
Emphasize:
When punitive damages are awarded.
That presently, there is much controversy about how appropriate it is to award punitive
damages against corporations for their economic activities.
Additional Matters for Discussion:
Judges often reduce punitive damages. In one case a Wisconsin court reversed a $94
million punitive damage award to the families of three ironworkers killed when a crane
collapsed during construction of Miller Park, the baseball stadium. The court ruled that
Chapter 10 – Torts Affecting Business
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
the defendant was negligent but not intentional in finding it too windy to install a piece
of the stadium’s retractable roof the day the workers were killed. In another case a
California state court jury ordered General Motors to pay $4.9 billion, mostly in
punitive damages following a gas tank explosion in their 1979 Malibu. The trial judge
reduced the award to $1.2 billion. It was appealed further.
A survey of 10,278 tort trials found that punitive damages were imposed in only 3.3%
of the 4,879 trials won by the plaintiff.
A study published in the Cornell Law Review concludes, contrary to common
assumption that judges rather than juries are more likely to side with plaintiffs in several
major tort categories of litigation. The study examined 16,858 federal cases from 1979–
1989 involving personal injury, including auto accidents, medical malpractice, and
products liability. E.g., in product liability cases plaintiffs won 48% of the time in non-
jury trials but only 28% before a jury. The size of the awards was approximately equal
for both non-jury and jury situations.
Answers to Review Questions and Problems
Intentional Torts
1. Assault and Battery
2. Intentional Infliction of Mental Distress
3. Invasion of Privacy
4. False Imprisonment and Malicious Prosecution
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
5. Trespass
6. Conversion
7. Defamation
8. Fraud
9. Interference with Business Relations
The individual can sue for damages for intentional interference with contractual relations.
The individual might also seek an injunction to prevent Sly from competing against his or
her company using these employees.
Negligence
10. Duty of Care
a. No. One has no legal duty to warn in this case without establishing a special
11. Unreasonable Behavior—Breach of duty
In litigation, the jury determines if the defendant’s behavior is unreasonable.
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12. Causation in Fact
13. Proximate Causation
14. Defenses to Negligence
The plaintiff will be entitled to a $150,000 award.
Strict Liability in Tort
15. Strict Products Liability
16. Ultrahazardous Activity
17. Other Strict Liability Torts
The five instances in which common carriers are not strictly liable for damage to transported
18. Compensatory Damages
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© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
19. Punitive Damages
Bob can recover compensatory damages. If he can prove willful and wanton negligence,
Bob can also recover punitive damages.
Business Discussion #1
1. Is the intruder liable for what he has done?
2. Do you have legal responsibilities to Sharon and Darryl?
The owner of University Heights Apartments has a special relationship (landlord-tenant)
with Sharon, hence he or she has a duty to take reasonable steps to protect her. Particularly if
the sliding glass door lock was inadequate and there have been prior breaking and entering
3. What should you consider doing at your apartments?
The owner should consider improving door locks, adding security lights, etc. If the area is
increased patrols should be considered.
Business Discussion #2
1. Has Mayfair done anything legally wrong?
2. Is your legal remedy against Mayfair limited to breach of contract?
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3. Will you be able to get damages from Mayfair other than a refund of your prepayment?
Explain.