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An introduction to the fundamentals of dynamic business law and business ethics chap006

Chapter 6
Tort Law


Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 6 Case Hypothetical
When Olivia P. Rae talks, people listen. As a talk show host on her nationally-syndicated television
program, “The ‘O’ Show,” Olivia reaches approximately thirty (30) million viewers each week. Her
dedicated viewers are collectively referred to as “Olivia’s Militia,” and most of her viewers wait for
Olivia’s on-air blessings before deciding what to read, how to vote, and more generally, how to think.
One of her recent programs has Olivia in “hot water.” Olivia devoted her September 30 episode to a
food-borne illness commonly referred to as “crazy chicken” disease. During the past two years,
approximately fifty (50) people in the United States had developed physical symptoms after eating
undercooked, diseased chicken. Apparently, chickens had developed the disease after eating
substandard feed, and consumers had been affected in the food chain. Common symptom included
muscle contractions, nausea and diarrhea, and less-than-caring individuals, many skeptical of the
disease’s legitimacy, referred to these symptoms as “The Chicken Dance.”
During the September 30 episode of “The ‘O’ Show,” Olivia interviewed a medical doctor. Dr. Tyson

Fowler, who said that in his opinion, chicken was not safe for human consumption. In response,
Olivia had said “Doctor Fowler, if that is the case, I will never eat chicken again.”
Hearing of this episode, the United Poultry Growers Association sued Olivia and “The ‘O’ Show,”
claiming commercial disparagement (the commercial equivalent of defamation.)
Are the defendants Olivia and “The ‘O’ Show” liable for commercial disparagement?


Chapter 6 Case Hypothetical
Officers Jones and Henderson are well-respected police officers in the Woodlawn
community. They have been recognized, both within the police department and by the
community, for their outstanding service. While on patrol in downtown Woodlawn late
one evening, Jones and Henderson observe an individual sleeping on a park bench in
the town square. The individual is Fred Ames, a homeless person known in the
community for his trouble with alcohol and illicit substances. Ames has a twenty-year
history of bad choices and bad luck, and most in Woodlawn “know his story.” Woodlawn
does not have a law against vagrancy or homelessness.
Determined to “clean up” the downtown area, the officers demand that Ames seat himself
in the back of the squad car. Reluctantly, and without the use of force on the part of
Jones and Henderson, Ames complies. Officers Jones and Henderson transport Ames to
a rural area, where they release him on a dark country road, and warn him not to return
to Woodlawn until he “cleans up his act once and for all.”
Have Officers Jones and Henderson committed a tort against Ames? Are the officers
within the “privilege of their authority” in removing Ames from the downtown area? Did
the officers act unethically? Should Woodlawn implement a law against

Definition: A civil wrong or injury to
another, other than breach of contract,
giving the injured party the right to bring a
lawsuit against the wrongdoer to recover
compensation for economic and/or
physical damages


Goals of Tort Law
• Provide compensation for injured parties
• Maintain order in society by
discouraging private retaliation by
injured parties
• Give citizens a sense that they live in a
just society


Classification of Torts
• Intentional Torts—Occur when defendant takes
action intending that certain consequences will
result, or knowing they are likely to result
• Negligent Torts—Occur when defendant acts in
a careless way that subjects other people to an
unreasonable risk of harm
• Strict Liability Torts—Occur when defendant
undertakes an “inherently dangerous” action (an
action that cannot be undertaken safely, no
matter what precautions the defendant takes)

Intentional Torts (Against Persons)
• Assault
• Battery
• Defamation


Definition: Situation when one
person places another in
fear/apprehension of immediate,
offensive bodily contact


Definition: An intentional, unwanted,
offensive bodily contact


Defenses Available to the Defendant
in a Battery Lawsuit
• Consent
• Self-Defense
• Defense of Others
• Defense of Property

Definition: The intentional
publication (communication to a third
party) of a false statement harmful to
an individual’s reputation


Types of Defamation
• Libel
-Definition—Defamation published
in permanent form, such as in a
magazine or newspaper

• Slander
-Definition—Defamation made orally

Intentional Torts (Against Property)
• Trespass to Realty
• Private Nuisance
• Trespass to Personal Property
• Conversion

Trespass to Realty
Occurs when a person intentionally:
• Enters the land of another without permission;
• Causes an object to be placed on the land of
another without the landowner’s permission;
• Stays on the land of another when the owner
tells him/her to depart; or
• Refuses to remove something he/she placed
on the property that the landowner asked to
be removed

Private Nuisance
Definition: A situation when a person
uses his/her property in an
unreasonable manner that harms a
neighbor’s use or enjoyment of his/her


Trespass to Personal Property
Definition: A temporary exercise of
control over another’s personal
property, or interference with the true
owner’s right to use the property


Definition: A situation that occurs when
a person permanently removes
personal property from the owner’s
possession and control


Intentional Torts (Against Economic
• Disparagement
• Intentional Interference With Contract
• Unfair Competition
• Fraudulent Misrepresentation

Definition: A false statement of
material fact resulting in damage to a
business or product’s reputation


Intentional Interference With Contract
• A valid and enforceable contract between
two parties;
• Defendant knew of the existence of the
contract and its terms;
• Defendant intentionally undertook steps to
cause one of the parties to breach the
contract; and
• Plaintiff injured as a result of the breach of

Unfair Competition
Definition: A tort against economic
interests that occurs when the
defendant unreasonably interferes with
the plaintiff’s opportunity to earn a


Fraudulent Misrepresentation
• The defendant knowingly, or with reckless
disregard for the truth, misrepresented
material facts and conditions;
• The defendant intended to have another
party rely on the misrepresentation;
• The plaintiff reasonably relied on the
misrepresentation; and
• The plaintiff suffered damages because of
reliance on the misrepresentation

Definition: The failure to exercise
reasonable care to protect another’s
person or property, causing an
unreasonable risk of harm to others


Elements of Negligence
• Duty
• Breach of Duty
• Causation (Actual and Proximate)
• Damages

Res Ipsa Loquitur (“The Thing
Speaks For Itself”)
• The event was a kind that ordinarily does
not occur in the absence of negligence;
• Other responsible causes, including the
conduct of third parties and the plaintiff,
have been sufficiently eliminated; and
• The indicated negligence is within the
scope of the defendant’s duty to the plaintiff

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