Acct 352 - Test 2

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Tort

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CIVIL wrong other than breach of contract

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Tort law seeks to

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compensate injured party

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2 Types of Torts

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-Intentional
-Unintentional

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Unintentional Torts

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- Negligence
- Strict Liability
- Product Liability

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Types of Intentional Torts

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- Assault & Battery
- False Imprisonment
- Defamation
- Invasion of Privacy
- Fraud
- Intentional Infliction of Emotional Distress

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Defamation

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injuring a person's good character by making false statements about them

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2 types of defamation

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-Slander - oral publication
-Libel- written publication

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Fraud

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Intentional Deciet for personal gain

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Negligence

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victim suffers injury caused by failure of person to exercise duty of care

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To prove Negligence must prove 4 Elements:

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-Duty of Care
-Breach of the Duty
-Causation
-Damages

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Causation

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- Actual
- Proximate

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Duty of Care

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- owed only to "forseeable" plaintiffs
- "reasonable person standard"

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Breach of Duty of Care

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- no duty to rescue people in danger unless you have a responsible relationship with that person

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Actual Cause

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- must prove actually did negligent act
-"But For"

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"But For" Test

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-Sine qua non
- if it weren't for the negligent act of the defendant then the injury would not have occured

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Plaintiff =

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victim

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Proximate Cause

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-Was the injury resulting from this negligent act FORSEEABLE?
-If it wasn't forseeable then there is no liability

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Malpractice

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Negligence of a professional in their professional duties

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Defenses to Negligence Claims

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- Assumption of Risk
- Comparative Negligence
- Contributory Negligence

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Comparative Negligence

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amount of damages is split between the plaintiff and defendant according to how much each one is responsible forex: 90 % Defendant
10 % Plaintiff

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Contributory Negligence

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- draconian results
- complete defense for defendant
- If plaintiff is at all responsible, they receive NOTHING

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Product Liability grew out of

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Strict Liability

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Product Liability 3 parts

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-Negligence
-Strict Liability
-Product Liability

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Product Liability- Negligence

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owed duty of care to consumer and this was breached causing the consumer injury

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Product Liability- Strict Liability

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high- risk activities
ex: maintaining dangerous animals

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Restatement (3rd) of Torts 3 Defects

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- Manufacturing Defects
- Design Defects
- Warning Defects

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Manufacturing Defects

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Actual product departs from intended Design

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Design Defects

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- Forseeable risk of harm could have been reduced or avoided by ALTERNATIVE design

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Warning Defects

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- Forseeable risk of harm could have been reduced or avoided by ADDITIONAL REASONABLE WARNINGS OR INSTRUCTIONS
ex: Microwave cat
Mc Donalds Coffee

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Defenses to Product Liability Claims

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- Assumption of Risk
- Product Misuse
- Contributory Negligence
- Comparative Negligence

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Product Misuse Claims

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The defendant must still guard against forseeable misuse

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Contributory & Comparative Negligence

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** Only for arguments based on NEGLIGENCE not defect

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Promise

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Assurance that one will or will not do something

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Contract

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An agreement based on a mutual exchange of promises that can be enforced by law

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2 Fundamental Contract Principles

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- Freedom of Contract
- Objective theory of Contracts

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Freedom of Contract

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- based on common law and implied in U.S. Constitution

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Objective Theory of Contracts

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- What would a reasonable person do under these circumstances?
-Take into consideration everything

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Elements of a Contract

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- Agreement
- Consideration
- Capacity
- Legality

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Agreement

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- Offer
- Acceptance
- Termination of Offer Prior to Acceptance

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Offer

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- Seriousness of offer
- Definiteness of Terms
- Communication to Offeree

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Acceptance

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- Mirror Image Rule
- Mailbox Rule

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Mirror Image Rule

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Acceptance must occur on both sides- both must benefit

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Mailbox Rule

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Once you accept you can't undo

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Termination of Offer Prior to Acceptance

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- Termination by action of parties - Revocation & Rejection
- Termination by operation of law

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Consideration

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-"adequacy" of consideration
-What you get in return for what you are offering
- Leagally beneficial to Promisee
- Leagally Detrimental to Promisor
- Not a Pre- Existing Duty

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Capacity of Parties

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- Legal ability to enter into contractual relationship
- Minor
- Mentally Incompetent

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Legality of Subject Matter

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- Tortious or Criminal Acts
- Contrary to Public Policy

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Bilateral Contract

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mutual exchange of promises

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Unilateral Contract

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offeree can accept offer only by performing

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Executory Contract

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Not fully performed by one or both parties

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Express Contract

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terms espressly, explicitly stated in words

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Lack of geniune assent

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-makes otherwise valid contract unenforcable

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Misrepresentation

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- of material fact
- Intent to deceive
- Innocent party justifiable relies
** Fraud by one party

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Lack of Assent

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- Misrepresentation
- Undue Influence
- Duress
- Mistake
- Unilateral Mistake
- Bilateral Mistake

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Undue Influence

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- One party's great influence overcomes the other's free will
** agreement not entered into freely

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Duress

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If one party is forced into the agreement there is no mutual assent

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2 Types of Mistake

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- Unilateral - made by 1 party
- Bilateral- made by both parties ~ No meeting of the minds - contract VOID

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Raffles v. Wichelhaus

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- "Peerless" ship- confusion makes contract void- bilateral mistake

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Promissory Estoppel

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- enforce contract if it would be UNJUST not to
- definite promise
- promisor knew that promisee JUSTIFIABLY relied on
ex: beach house
Goff- Hamel Case

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Performance Types

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-Complete
- Substantial
- Material Breach of Contract

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Complete Performance

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- performance is exactly as agreed
-no problem

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Substantial Performance

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- in good faith
-provides other party with essential elements of contract
- innocent party entitled to damages for failure to completely perdorm
ex: Jacobs & Young, Inc. v. Kent

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Material Breach of Contract

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- Party breaches contract so innocent party has no duty to perform
- party has not substantially performed

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Naked Promise

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- One way offer made
- Gore building example

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Discharge by Agreement

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- Mutual Recession
- Novation

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Mutual Recession

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- Agreement by parties to terminate prior agreement (making a new contract)

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Novation

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- Agree to substitute 3rd party for one of orignal parties

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2 Types of Remedies

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- Specific Performance
- Money Damages

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Specific Performance

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- court orders breaching party to do what they agreed to do (or stop doing what they agreed not to do)
**when money damages will not solve problem
**EQUITABLE REMEDY

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Examples of Specific Performance`

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- Sale of Real Estate
- Sale of goods which are rare or unique

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Specific performance never ordered in:

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Case of personal service/ employment contracts

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Damages

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monetary compensation to non-breaching parties

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Compensatory Damages

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- "Cost of Loss"
- Pay what your losses are worth

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Consequential Damages

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-"forseeable losses"
- caused by special circumstances
ex: Hadley v. Baxendale

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Hadley v. Baxendale

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- Hadley argued Consequential damages but didn't tell Baxendale of special circumstances so losses were not forseeable so didn't win

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Types of Damages

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- Compensatory Damages
- Consequential Damages
- Punitive Damages
- Nominal Damages
- Liquidated Damages

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Punitive Damages

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RARE
- Punish wrongdoing
- not about money

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Nominal Damages

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- recognize breach even when there is no loss
- Rare

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Liquidated Damages

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- agreed upon in advance
- Sepcific Dollar amounts

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Liquidated Damages recognized by court if:

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- actual damages were difficult to estimate
- amount is reasonable not excessive

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Mitigation of Damages

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- injuured party has legal obligation to reduce "mitigate" damages
ex: Parker v. 20th century Fox

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Contracts that MUST be in writing

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- involving land
- Performace cannot be completed in 1 year
- Promises made in consideration of marriage
- Under UCC sale of goods over $500

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UCC

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-50 diff states, 50 diff UCCs
- attempt to unify the common commercial contract law of 50 states

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UCC increases

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efficiency of businesses
**merchant to merchant

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Written Contracts:

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-handwriting over typing
-typing over printing

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Argue Compensatory or Consequential

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breaching party- compensatory
innocent party- consequential

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Goff- Hamel v. Hastings

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- promisory estoppel
- made a promise which Goff- Hamel JUSTIFIABLY relied on

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Greenman v. Yuba Power Products

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- Defect in Design
-

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Hadley v. Baxendale

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- Not awarded consequential damages because didn't tell Baxendale about special cirumstances