Business Law Chapter 6 Homework Defense Property Defend Property Individuals Can Use

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subject Authors Frank B. Cross, Kenneth W. Clarkson, Roger LeRoy Miller

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CHAPTER 6: TORT LAW 13
1. Failure to Return Goods
Failing to return goods is conversion even if the owner consented to the original taking.
2. Intention
Believing one is entitled to the property is not a defense. Thus, someone who buys stolen goods is
D. DISPARAGEMENT OF PROPERTY
Disparagement of property occurs when economically injurious falsehoods are made about another’s
product or property.
1. Slander of Quality
Publication of false information about another’s product, alleging it is not what its seller claims, is
2. Slander of Title
IV. Unintentional Torts (Negligence)
An act that could be an intentional tort if not for a lack of intent may constitute negligence:
Under negligence theory, a tortfeasor neither wishes to bring about the consequences of an act nor
believes that they will occur. The actor’s conduct merely creates a risk of the consequences. Without
the creation of a risk, there can be no negligence.
Negligence requires proof of four elements
A. THE DUTY OF CARE AND ITS BREACH
Negligence involves the careless performance of a legally required duty or the failure to perform a legally
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14 UNIT TWO: TORTS AND CRIMES
1. The Reasonable Person Standard
2. The Duty of Landowners
a. The Duty to Warn Business Invitees of Risks
Business firms that invite persons onto their premises usually have a duty to exercise
b. Obvious Risks Provide an Exception
Obvious risks are an exception, but risks that are obvious to an owner may not be to another
party, such as a child.
3. The Duty of Professionals
B. CAUSATION
The breach of the duty of care must have caused the harm for which recovery is sought.
1. Courts Ask Two Questions
There must be (1) causation in fact and (2) the act must be the proximate cause of the injury.
If an injury would not have occurred without the breach, there is causation in fact. Causation
2. Foreseeability
it would be unfair to impose liability on a defendant unless the defendant's actions created a
C. THE INJURY REQUIREMENT AND DAMAGES
D. NEGLIGENCE PER SE
Negligence per se may occur if an individual violates a statute providing for a criminal penalty and that
violation causes another to be injured. The statute must clearly set out the expected standard of
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CHAPTER 6: TORT LAW 15
E. GOOD SAMARITAN STATUTES
Most states have Good Samaritan statutes, under which persons who are aided voluntarily by others
F. DRAM SHOP ACTS
Many states have dram shop acts, under which a tavern owner or bartender may be liable for injuries
V. Defenses to Negligence
Besides the defenses noted below, a defendant might assert that a plaintiff failed to prove one or more of the
required elements for negligence.
A. ASSUMPTION OF RISK
Assumption of risk requires that the injured person knew of the risk and voluntarily assumed it. The
risk can be assumed by express agreement or implied by the plaintiff’s knowledge of the risk and
CASE SYNOPSIS
Case 6.3: Taylor v. Baseball Club of Seattle, L.P.
During the pre-game warm-up to a Mariners game, Delinda Taylor was struck in the face by an errantly
thrown baseball. To recover for her injuries, she sued the Mariners in a Washington state court, alleging
negligence. The Mariners argued that Taylor, a Mariners fan, was familiar with the inherent risk of balls
entering the stands, and thus assumed the risk of her injury. The court dismissed the case. Taylor appealed.
A state intermediate appellate court affirmed. There was substantial evidence that Taylor was familiar with
..................................................................................................................................................
Notes and Questions
Are there any sports events at which a player, spectator, or other participant might not be held to
have assumed the risk of an injury? Are there injuries that a participant would likely not have
assumed the risk of? There may not be a sports event at which a participant could avoid an assumption-of-
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16 UNIT TWO: TORTS AND CRIMES
How might the outcome in this case have been avoided? First, the factual consequencethe
plaintiff’s injury—might have been avoided if the plaintiff had been paying closer attention to the actions of the
Had the plaintiff prevailed, how might the venues for baseball be different? Fences and backstops
might be more common, and spectators and other participants, including vendors, might be relegated to
Should plaintiffs be required to prove the amount of their damages with certainty and exactitude?
Why or why not? Generally, no. Definitive and precise proof of damages is rarely possible and in fact is not
ADDITIONAL CASES ADDRESSING THIS ISSUE
Assumption of Risk
Cases involving the defense of assumption of risk against claims of negligence include the following:
Rudzinski v. BB, __ F.Supp.2d __, 2010 WL 2723105 (D.S.C. 2010) (risk of being hit by a fellow golfer
swinging his club at high speed was an inherent and inescapable risk posed by golfing, and since the golfer
voluntarily encountered this risk through participation in the sport, he assumed any harm flowing from his co-
participant's attempts to strike the ball).
Sanchez v. Candia Woods Golf Links., __ N.H. __, __ A.3d __, 2010 WL 4781478 (2010) (getting hit with
an errant golf ball was a risk inherent in the game of golf, which golfer voluntarily assumed).
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CHAPTER 6: TORT LAW 17
B. SUPERSEDING CAUSE
A superseding intervening force breaks the connection between a wrongful act and an injury.
C. CONTRIBUTORY NEGLIGENCE
In a few states, contributory negligence absolves the tortfeasor completely if the injured person failed to
exercise reasonable care.
D. COMPARATIVE NEGLIGENCE
In most states, comparative negligence reduces the amount of the tortfeasor’s liability if the injured
person failed to exercise reasonable care.
In a “pure” comparative negligence jurisdiction, a judge or jury assigns a percentage of fault to each
ENHANCING YOUR LECTURE
  HOW IMPORTANT IS TORT LIABILITY?
 
Although there are more claims for breach of contract than any other category of lawsuits, the dollar
amount of damages awarded in tort actions is typically much higher than the awards in contract claims. Tort
claims are also commonplace for businesses.
Because of the potential for large damages awards for intentional and unintentional acts,
THE EXTENT OF BUSINESS NEGLIGENCE LIABILITY
A business can be exposed to negligence liability in a wide variety of instances. Liability to business
invitees is a clear example. A business that fails to warn invitees that its floor is slippery after a rainstorm, or
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18 UNIT TWO: TORTS AND CRIMES
Professionals such as physicians, lawyers, engineers, and accountants have a duty to their clients to
LIABILITY FOR THE TORTS OF EMPLOYEES AND AGENTS
A business can also be held liable for the negligence or intentional torts of its employees and agents. A
CHECKLIST FOR MINIMIZING BUSINESS TORT LIABILITY
1. Constantly inspect the premises and look for areas where customers or employees might trip, slide, or
fall. Take corrective action whenever you find a problem.
2. Train employee on the importance of periodic safety inspections and the procedures for reporting unsafe
conditions.
3. Routinely maintain all business equipment (including vehicles).
TEACHING SUGGESTIONS
1. To illustrate any tort, set out the elements and provide a hypothetical in which one of the elements is
missing. This helps students to identify and distinguish the elements in fact situations. Possible hypotheticals
2. Tort law involves civil liability. This chapter provides an opportunity to emphasize the distinction between
civil and criminal liability by providing examples of acts that constitute a tort and a crime, a tort and no crime,
a crime and no tort, and no tort and no crime. For instance:
a. At a downtown bar, Walter drinks to excess. As he is driving home, at the first intersection, he
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CHAPTER 6: TORT LAW 19
b. Believing he is entitled to Paula’s typewriter, Ralph takes it. Ralph has committed a tort
c. A mugger, gun drawn, sneaks up behind Steve on the street. A police officer seizes the mugger
3. A mnemonic device to aid students in remembering the elements of a cause of action in negligence is
ABCD.
A A duty of care.
Cyberlaw Link
Ask students to consider the parameters of tort law in cyberspace. What is its potential and what are its
limits? How might the tort of misappropriation be applied in cases of misconduct online? What are
some of the tort causes of action that might apply to defective or misleading electronic transfers of
information?
DISCUSSION QUESTIONS
1. Which torts protect against the intentional interference with persons? Assault. An intentional,
unexcused act that creates in another person a reasonable apprehension or fear of immediate harmful or offensive
2. What are defenses to charges of assault and battery? Consent. There is no liability for damage done by
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20 UNIT TWO: TORTS AND CRIMES
3. What is the basis for the tort of defamation? The publication of a statement that holds an individual up to
4. What are defenses to charges of wrongful interference with the business rights of others? The inter-
ference was permissible. Bona fide competitive behavior is permitted even if it results in the breaking of a contract.
5. What is appropriation? The use of one person’s name or likeness by another, without permission and for
6. Which torts protect against the intentional interference with property? Trespass to land. When a
person, without permission, enters onto another’s land, or causes anything or anyone to enter onto the land, or
7. Should the application of the concept of proximate cause be expanded to allow recovery in more
cases, or should it be limited to reduce the frequency and amounts of recovery? Why? The application of the
concept of proximate cause should be limited, because these and other tort suits are crippling business and inhibiting
8. Suppose that George, the owner of a softball park, has a duty to provide a backstop to protect spectators who
want the protection against the risk of being hit by a ball. Nikita, a visitor from Eastern Europe, sits in the stands
behind the plate where the backstop should be. Nikita has never seen softball, knows nothing about it, and does not
understand the danger. During the game, Nikita is struck and injured by a ball. Can Nikita recover from
George for the injury? Nikita can recover from George for the injury. Assumption of risk involves the question of
Under the circumstances described in the previous question, Eldon, another spectator, also sits in the stands
behind the plate where the backstop should be. Unlike Nikita, Eldon is fully aware of the risk. During the game, Eldon
is struck and injured by a ball. Can Eldon definitely recover from George for the injury? Eldon may not be able to
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CHAPTER 6: TORT LAW 21
9. Large damages awards in tort litigation have to be paid by someone. If the defendant is insured, then
insurance companies foot the bill. Ultimately, though, high insurance rates are passed on to consumers of
goods and services in the United States. Will tort reform that reduces the size and number of damages
awards ultimately mean lower costs of goods and services? Will tort reform lead to higher risks associated
with services and products? Insurance often covers damages awards in the United States, and the premiums can
10. Considering that punitive damages are intended in part to punish, should a defendant’s financial
situation be taken into account in setting the amount? Yes, because the “punishment” might otherwise be
disproportionate to the “wrong”—too small in a case involving a large, profitable corporation, or too big in a case
ACTIVITY AND RESEARCH ASSIGNMENTS
1. Have students bring to the class current news articles about events that involve or might ultimately involve tort
2. News reports of local, national, and international controversies involving the subjects considered in this
3. Break the class into small discussion groups of four or five persons. Assign each group a negligence problem
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 9: This case grew out of an ad placed in The New York Times in 1960 to raise money for civil
rights causes. Titled “Heed Their Rising Voices,” the ad stated that thousands of African-American students were
engaging in nonviolent demonstrations in affirmation of their right to live in dignity. The ad claimed that the students’
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22 UNIT TWO: TORTS AND CRIMES
In New York Times v. Sullivan the United States Supreme Court reversed. The Court ruled that even
applications of the law of libel must be made “against the background of a profound national commitment to the
principle that debate on public issues should be uninhibited, robust and wide open.” Only proof of “convincing clarity
space” that it needs to survive.
Footnote 12: In ancient times, it was not the existence of a contract that was important but the relation
recognized by law in which the parties stood and with which the third party interfered. In early Roman law, the head
of a household could maintain an action against one who committed violence on household members, including
slaves. By the 1200s, the common law had incorporated this idea with a twistan action for damages could be
sustained by any master for loss of the services of a servant through violence committed on the servant. After the
Black Death, in 1349, because of the shortage of labor in England, a system of compulsory labor was introduced in
an Ordinance of Labourers (later Statute of Labourers). A penalty was provided to keep laborers from running away,
and a remedy was given to employers against anyone who received and retained the laborer in service. In 1853,
Footnote 14: Nicholas Mora used Welco Electronics, Inc.’s credit card to obtain money—more than
$370,000—from Welco through charges to Mora’s company AQM. Welco filed a suit in a California state court against
Mora, alleging conversion. The court issued a judgment in Welco’s favor. Mora appealed. In Welco Electronics, Inc.
v. Mora, a state intermediate appellate court affirmed. “Historically, the tort of conversion was limited to tangible
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CHAPTER 6: TORT LAW 23
What is PayPal, information and how can it be the subject of a conversion? PayPal provides an
intermediary account for online purchases. PayPal charges the seller a fee for its service. Customers fund their
conversion.
Does the holding in this case mean that any transaction involving a credit card that leads to a dispute
is subject to a cause of action for conversion? No, the holding in this case does not mean that any transaction
involving a credit card that leads to a dispute can be subject to a cause of action for conversion. In this case, the court
Footnote 16: As a man carrying a package tried to board a moving train from a crowded station platform,
railroad employees on the train and the platform tried to help him. The man dropped his package, which contained
fireworks, and it exploded. The explosion caused scales on the platform to fall on Mrs. Palsgraf, injuring her. She
sued the railroad. The court found that the railroad employees were negligent in their conduct toward Palsgraf, who
was awarded damages. The railroad appealed.
In Palsgraf v. Long Island Railroad Co., the New York Court of Appeals dismissed Palsgraf’s complaint.
The question before the court was: Does the duty of care extend only to those who may be injured as a result of a
foreseeable risk, or does it extend also to a person who is outside the zone of danger and whose injury could not
What economic reasons are there for not awarding damages to Palsgraf? Who should bear the loss
in this and similar situations—the business or the injured party? What is a “zone of danger”?
Is the question underlying a determination of proximate cause one of social policy or economic
policy? That is, are courts (and plaintiffs) often looking only for someone to pay for an injury or damage and
thus assess liability on the basis of who can most easily pay? If so, does this mean that the individual who
has no assets and no insurance is likely to avoid liability?
The Long Island Railroad carried millions of passengers each year, and many of those passengers brought
packages onto the train. Should the New York Court of Appeals that the harm to Mrs. Palsgraf was not
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24 UNIT TWO: TORTS AND CRIMES
As a consequence of the decision rendered by the New York Court of Appeals, Mrs. Palsgraf was effectively
left without a remedy, even though she was in no way responsible for her injuries. What might the consequences
for tort litigation have been if the New York Court of Appeals had ruled in favor of Mrs. Palsgraf? The
consequences would very likely be a substantial increase in the potential scope of liability for negligence. Businesses
Should the application of the concept of proximate cause be expanded to allow recovery in more
cases, or should it be limited to reduce the frequency and amounts of recovery? Why? The application of the
concept of proximate cause should be limited, because these and other tort suits are crippling business and inhibiting
What would be the advantages and disadvantages of a universal principle of proximate cause applied
everywhere by all courts in all relevant cases? Discuss. The advantages might include those underlying common
ADDITIONAL CASES ADDRESSING THIS ISSUE
Foreseeability
Cases considering whether the existence of a duty of care depends on whether the injury to the
particular victim was foreseeable include the following.
Cases in which Palsgraf was discussed in detail include Mellon Mortgage Co. v. Holder, 5 S.W.3d 654
(Tex. 1999) (motorist sexually assaulted in a parking garage by a police officer).

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