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Law and Business
LAW 122
Leigh Lampert

CH 3 – Introduction to Torts Introduction to Tort Law Tort is a derived French word meaning “wrong”, Tort generally consists of a failure to fulfill a private obligation that was imposed by law. Torts and Crimes Torts definition refers to the breach of a private obligation. The definition also refers to a private obligation that was “imposed by law”. A contract also contains private obligations; contractual obligations are different from tort obligations, however, because they are created by the parties, rather than imposed by the law. An obligation in tort law is owed to a person. Tortfeasor is a person who has committed a tort. While a crime occurs if a person breaks a public obligation (owed to society as a whole) usually resulting in a punishment, a tort occurs when a person breaks a private obligation usually resulting in compensatory damages. Even though torts and crimes are different, they are two concepts that can arise from the same facts (ex: Someone hits you, they have committed a tort of battery and the crime of assault etc.). Torts and Contracts One similarity and four differences between torts and contracts: Structure- Both tort and contract involve primary and secondary obligations. Primary obligations tell people how they ought to act. Secondary obligations are remedial; they tell people how they must act after primary obligations have been broken. Sources of Primary Obligations- The fundamental difference between tort and contract is: Obligations in tort are simply imposed by law & obligations in contract are created by the parties. Privity- The doctrine of privity states that the only people who can sue, or be sued, on a contract are the parties themselves. Compensation- The purpose of imposing obligations in tort law is to prevent harm. The purpose of creating obligations in contract is usually to provide benefits. Tort looks backward (paying medical bill to put them back to their regular condition) and contract looks forward (paying a settlement, to get them what they wanted that was agreed on). Risk Management- Tort obligations are imposed by law, so they are more likely to take a person by surprise and they may require more than a person is actually capable of providing. Obligations in contracts are created voluntarily, so it shouldn’t take the parties by surprise and they should never require more than the parties believe they can actually provide. Types of Torts Because tort law needs to strike a different balance in different circumstances, some torts require proof that the defendant acted with a guilty mind. There are three possibilities: Intentional torts occur when a person intentionally acts in certain ways (definition of intention matters). Ex: assault, battery, false imprisonment, trespass to land, interference with possessions, conspiracy/scheme, intimidation, interference with contractual relations, unlawful interference with economic relations, deceit. Negligence torts occur when a person acts carelessly. Ex: occupiers’ liability, nuisance (not always classified as a negligence tort), negligence, professional negligence, product liability Strict liability torts occur when a person does something wrong without intending to do so and without acting carelessly. It’s enough that the defendant was responsible for the situation that result in the plaintiff’s injury. Ex: animals, Rylands v Fletcher (some people consider vicarious liability to be a form of strict liability; but sometimes someone held vicarious liable didn’t commit a tort). Strict liability torts create special problems for risk management. They don’t require proof of any sort of intentional or careless wrongdoing. Liability is imposed simple because the defence was responsible for the situation that inured the plaintiff. Strict liability is rare because it would be unfair to impose liability on a person who did not intentionally or carelessly cause the plaintiff’s injury. General Principles of Tort Law Liability Insurance: is a contract in which an insurance company agrees, in exchange for a price, to pay damages on behalf of a person who incurs liability. Liability insurance also includes a duty to defend. A duty to defend requires the insurance company to pay the expenses that are associated with lawsuits brought against the insured party. Liability insurance creates an interesting tension between two of tort law’s most important functions. Liability insurance contributes to the compensatory function of torts. The compensatory function aims to fully compensate people who are wrongfully injured. If a Tortfeasor cannot personally afford to pay damages, the plaintiff will not receive full compensation unless the defendant is insured. Liability insurance undermines tort law’s deterrence function. The deterrence function discourages people from committing torts by threatening to hold them liable for the losses that they cause. Vicarious Liability: occurs when one person is held liable for a tort that was committed by another person. It may arise in various ways. For public policy reasons, a statute may hold on person responsible for another’s torts in particular circumstances. In many cases vicarious liability arises because an employer is held liable for a tory that was committed by an employee. The doctrine of vicarious liability may be justified on a number of grounds: -It serves tort law’s compensatory function by allowing the plaintiff to claim damages from both an employee and an employer -Vicarious liability also serves tort law’s deterrence function by encouraging employers to avoid unusually hazardous activities and to hire the best people available -For fairness, it may be appropriate to require a business to bear responsibility for the losses that its activities create, even if those losses are caused by misbehaving employees. Note that 1) an employer is not liable every time an employee does something wrong. An employer is not vicariously liable if an employee’s tort occurred completely outside of the employment relationship. 2) And an employer may be held vicariously liable for employees, but not for independent contractors. An independent contractor is a wor
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