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LAW122 - CHAPTER 5-8 NOTES.docx

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Law and Business
LAW 122
Jane Monro

CHAPTER 5: MISCELLANEOUS TORTS AFFECTING BUSINESS - It is important for business students to be aware of certain torts affecting the normal course of business operations - Tort Law mediates a compromise of competing values and interests - aggressive competition vs. fair play - market forces vs. legal intervention - 8 miscellaneous torts grouped by themes in this chapter: 1. Morality in the Marketplace: torts of conspiracy, intimidation, interference with contractual relations, unlawful interference with economic relations, and deceit regulate how business person can gain an advantage over competitors or customers; morality in the marketplace 2. Torts Related to Land: business people affected by use and occupation of land torts of occupiers liability and Rylands v Fletcher 3. Defamation: concerned with the need to strike balance between protecting plaintiffs reputation and respecting defendants freedom of speech Conspiracy (PG. 101-102) occurs when 2 or more defendants agree to act together with the primary purpose of causing the plaintiff to suffer a financial loss magic in numbers: no tort if 1 person hurts another economically - the laws sense of fair play may be offended if several people conspire against another tort is hard to prove ; need to show that defendants primary purpose was hurting the plaintiff easier to prove if defendants conspired to commit unlawful act; only need to show that defendants should have known that actions may hurt plaintiff plaintiff must prove: - if conspiracy to commit lawful act - defendants primary purpose is to financially harm plaintiff - if conspiracy to commit unlawful act - defendants liable since should have known risk of harm Intimidation (PG. 102-104) concerned with unethical business practices occurs when plaintiffrduffers a loss as a result of defendants threat to commit unlawful act against plaintiff or 3 party plaintiff must prove: - threat to break duty in tort, contract, or crime - intimidated party submitted to threat - plaintiff suffered loss (plaintiff does not need to prove this) two-party intimidation: defendant pressured plaintiff directly three-party intimidation: defendant pressured third party to hurt plaintiff Interference with Contractual Relations (PG. 104-105) one way to get an advantage is to hire away best workers tort occurs when defendant disrupts a contract that exists between the plaintiff and a third- party Risk Management: - danger in luring away competitors customers - danger in luring away competitors workers Direct Inducement to Breach: - convince customer to break agreement - convince employee to quit job - Plaintiff must prove: i) defendant knew about contract ii) defendant intended to cause breach of contract iii) defendant actually caused breach of contract (encouraged the breach) iv) plaintiff suffered loss Indirect Inducement to Breach: - steal workers tools to prevent performance - need to also show that defendants acts were unlawful Unlawful Interference with Economic Relations (PG. 106-107) occurs if defendant commits an unlawful act for the purpose of causing the plaintiff to suffer economic loss; general tort even if can`t satisfy the requirements of the other torts, defendant can still be liable Plaintiff must prove: intent to injure plaintiff - sufficient that act directed toward plaintiff unlawful or illegal act - sufficient that act not authorized economic loss Deceit (PG. 107-108) occurs if defendant makes false statement which it knows is untrue, which it intends to mislead plaintiff and cause plaintiff to suffer a loss i) false statement positively untrue, half-truth, failure to update information ii) defendant knew that statement was false iii) defendant made statement with intention of misleading iv) plaintiff suffers a loss by reasonably relying on statement business people avoid lying and creating wrong perception Occupiers Liability (PG. 109-112) requires occupier to protect visitors from harm - occupier = person with substantial control of premises - premises = land, ships, trains, planes, elevators, etc. common law used to deal with each type of ``visitor`` differently now several criteria are assessed (ie. age of trespasser, reason for trespass, nature of the danger, occupiers knowledge of danger, cost of removing danger) most provinces have now enacted legislation to govern occupiers liability statutory changes: duty for condition of premises and activities - common law applied to condition only (rotted tree on campsite vs. drunken guest) duty of reasonable care for all visitors (regardless of classification) - specific requirements reflect circumstances of case - some exceptions for adult trespassers duty can be modified by warning signs (ie. ski resort sign assume all risk etc.) Nuisance (involves land) (PG. 112-115) occurs when defendant unreasonably interferes with plaintiff`s use and enjoyment of its own land Forms of nuisance: i. physical damage to land or property (ie. vibrations cause foundation to crack) ii. impaired enjoyment of property (ie. blaring music from nightclub, smell from pig farm) iii. non-intrusive nuisance without causing anything to travel to property (ie. casino attracts criminals and late night traffic) nuisance occurs only if interference is unreasonable (ie. physical damage always unreasonable; no impaired enjoyment from neighbour listening to Kenny G) court looks at several factors and criteria (ie. nature of neighbourhood, time and day, intensity and duration of interference etc.) defences to nuisance include: consent, statutory authority - consent to activity (not just a failure to complain) - statutory authority: defendant acted pursuant to legislation nuisance inevitable result of statutory action Remedies for nuisance: compensatory damages to repair losses injunction to prevent future losses - likely if physical damage - unlikely if huge loss to defendant or community eg towns single factory may not be closed down The Rule in Rylands vs Fletcher (PG. 115-116) states that defendant can be held strictly liable for a non-natural use of land if something escapes from its property and injures plaintiff plaintiff must prove: i. defendants non-natural use of land (ie.building a resevoir on ppty) creation of special or unusual danger ii. escape from defendants land (ie. water breaks through reservoir and floods neighbours ppty) iii. loss or injury to plaintiff strict liability defendant may be held liable even if it acted carefully and with reasonable care defences: i. plaintiff consented to the unnatural use of defendants land rd ii. escape may have been caused by 3 party or a natural force Risk Management: use special precautions whenever using land in a non-natural way Defamation (PG. 116-120) is a false statement that may damage reputation the tort is concerned with protecting reputations ! plaintiff must prove the following: - statement reasonably refers to plaintiff - statement could hurt plaintiffs reputation - statement was published to third party (private statement wont hurt rep) defences to defamation: - justification (truth): occurs if defendants statement is true must be true; honest and reasonable belief in truth is insufficient - privilege: absolute privilege complete immunity; even if statements made in bad faith for malicious purpose used in limited circumstances (ie. during parliamentary proceedings) qualified privilege statement must be made in good faith Defendant has legal, moral, social obligation to make statement to person with duty to receive it legal, moral or social obligation to make a statement to someone with a similar duty or interest in receiving it Only liable if statement made in bad faith - fair comment: expression of an informed opinion on a matter of public importance defence applies as long as the opinion in question could honestly be held by some person, and Defendant did not act maliciously used in order to encourage useful debate on social issues (ie. newspaper column, mayoral debate) defence applies as long as the opinion
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