Duplessis.SG.Chapter 11.doc

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Department
Management and Organizational Studies
Course Code
Management and Organizational Studies 2275A/B
Professor
Henry Meredith

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PAR3:BUSINESS TORTS C HAPTER 11 T HE T ORT OF N EGLIGENCE Objectives After studying this chapter, you should have an understanding of: • the conduct that the law of negligence addresses • the principles of the law of negligence • the defences in a negligence action • the common kinds of negligence actions businesses face • the difference between negligence and strict liability Learning Outcomes • Recognize negligent conduct (pages 248) • Understand the basic principles of negligence law (page 249) • Understand the four steps in a negligence action (pages 249) • Understand the possible defences in a negligence action (pages 255) • Recognize common negligence actions in business (pages 257– 261) • Understand the negligence standard versus strict liability (page 262) Chapter Summary Donaghue v Stevenson is the foundation of modern negligence law. Negligence law is an inherently flexible, growing legal area. It seeks to provide a remedy to the plaintiff who has suffered a loss or injury due to the culpable though unintentional conduct of the defendant. The four steps to a negligence action describe general standards or markers that help a court assess whether the defendant in any given case has been negligent. One of the most common defences to a negligence claim is that of contributory negligence. The plaintiff’s damages award will be reduced in proportion to his or her own culpability in causing the loss. A less common defence is to allege that the plaintiff voluntarily assumed the risk. This defence is rarely established since the defendant must prove that the plaintiff consented not only to the physical risk of harm but also agreed to accept the legal risk of not being able to sure the defendant for resulting loss or injury. Negligent misstatement or negligent misrepresentation holds the defendant responsible for negligence taking written or oral form. Professionals are more likely to commit this kind of tort. Courts guard against the professionals facing liability in an indeterminate amount for an indeterminate time to an indeterminate class. This sheltering of the professional is also partially justifiable in light of the fact that a professional’s negligent misstatement is likely to cause only pure economic loss as opposed to personal injury or property loss. Tort law has been historically less concerned when the plaintiff’s loss is purely monetary. Business is also affected by product liability. Product liability involves both negligence law and the law of contract. The manufacturer of a poorly produced or designed product will face an action in negligence by the disappointed Copyright © 2011 by Nelson Education Ltd. PART3:BUSINESS TORTS purchaser. The retailer will face a breach of contract action by that same person and – if the retailer is negligent – an action in negligence as well. Another area of liability for business relates to the service of alcohol. Commercial servers of alcohol owe a duty of care to protect against foreseeable risks of intoxication. This duty extends broadly, including the employer who hosts a social event where alcohol is served. Strict liability is a liability imposed even where the defendant has not been negligent. This is a rare phenomenon in tort law, but there are other areas of law in which strict liability is common. The two most important areas relate to liability for breach of contract and vicarious liability for the torts of one’s employees. As well, some of Canada’s major trading partners, including the EU and parts of the United States, use strict liability rather than a fault-based standard in defective-product liability cases. Study Outline Use this outline to prepare a complete set of notes for this chapter. What is Negligence? – page 248 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Steps to Negligence Action – page 249 _______________________________________________________________________ _______________________________________________________________________ Does the defendant owe the plaintiff a duty of care?______________________________ _______________________________________________________________________ Are the parties neighbours?______________________________________________ Are there considerations that should limit or eliminate the duty?_________________ _______________________________________________________________________ Did the defendant breach the standard of care?__________________________________ _______________________________________________________________________ _______________________________________________________________________ Did the defendant behave as a reasonable person? ____________________________ _______________________________________________________________________ Did the defendant’s careless act (or omission) cause the plaintiff’s damage?__________ _______________________________________________________________________ Is there a prima facie duty of care?___________________________________________ _______________________________________________________________________ Is there a relationship of sufficient proximity? __________________________________ _______________________________________________________________________ Reasonable person_____________________________________________________ Copyright © 2011 by Nelson Education Ltd. CHAPTE11THE TORT OF NEGLIGENCE Causation_______________________________________________________________ Remoteness of damage_____________________________________________________ Thin skull rule________________________________________________________ Pure economic loss____________________________________________________ Defences to a Negligence Action – 255 _______________________________________________________________________ _______________________________________________________________________ Contributory negligence____________________________________________________ _______________________________________________________________________ Voluntary assumption of risk _______________________________________________ Negligent Misstatement – page 257 _______________________________________________________________________ _______________________________________________________________________ Professional___________________________________________________________ Third party___________________________________________________________ Negligence and Product liability_____________________________________________ _______________________________________________________________________ Product liability__________________________________________________________ _______________________________________________________________________ The Negligence Standard versus Strict Liability - 262 Strict liability_________________________________________________________ Liability in contract_______________________________________________________ _______________________________________________________________________ Vicarious liability_________________________________________________________ SELF-ASSESSMENT Key Terms Briefly define each term in the space provided. Reasonable care – page 248 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Duty of care – page 249 _______________________________________________________________________ _______________________________________________________________________ Neighbour – page 249 168 PART3:BUSINESS TORTS _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Prima facie – page 250 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Reasonable person – page 251 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Causation – page 252 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Remoteness of damage – page 253 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Thin skull rule – page 254 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Pure economic loss – page 255 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Voluntary assumption of risk – page 256 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Professional – page 257 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Third party – page 257 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Copyright © 2011 by Nelson Education Ltd. CHAPTE11:THE TORT OF NEGLIGENCE Negligent misstatement or negligent misrepresentation – page 257 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Product liability – page 258 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Strict liability – page 262 _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Matching Match the correct letter of the most appropriate term in the space provided before each sentence. Please note that you will use only 10 of the terms so you must choose the best term available to match with its description. A Causation B Contributory negligence C Duty of care D Negligent misstatement or negligent misrepresentation E Neighbour F Product liability G Pure economic loss H Reasonable care I Reasonable person J Remoteness of damage K Specialized standard of care L Standard of care M Strict liability N Thin skull rule O Voluntary assumption of risk 1. ____ The responsibility owed to avoid careless acts that cause harm to others. 2. ____ Anyone who might reasonably be affected by another’s conduct. 3. ____ The standard used to judge whether a person’s conduct is negligent. 4. ____ The absence of a close relationship between the defendant’s action and the plaintiff’s loss. 5. ____ Responsibility for the full extent of a loss where an inherent weakness makes the injury more serious. 170 PART3:BUSINESS TORTS 6. ____ Financial loss with no personal injury or property damage. 7. ____ Unreasonable conduct by the plaintiff that partially caused the injuries. 8. ____ Manufacturer’s responsibility for negligently made goods that cause harm to a consumer. 9. ____ No-fault liability. 10. ____ Careless words that cause harm. Questions Write a short, point-form answer for each question in the space provided. To assist you in understanding the chapter, it is recommended that you also use additional paper to write a full and complete essay answer for each question. 1. Why is negligence a common tort in the business world? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 2. What is the purpose of negligence law? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 3. What interests do courts have to balance with respect to negligence? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 4. What must a plaintiff prove to succeed with a negligence action? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 5. What was the significance of the Donoghue v. Stevenson legal decision? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Copyright © 2011 by Nelson Education Ltd. CHAPTE11:THE TORT OF NEGLIGENCE 6. Explain the two primary factors that must be met to establish a duty of care in negligence. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 7. What is the objective for having the policy consideration in the duty of care test? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 8. Does negligence require perfect conduct on the part of the defendant in order to excuse liability? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 9. Explain the concept of causation in the negligence test. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 10. What is the standard of care for professionals? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 11. How does the issue of remoteness limit the plaintiff’s claim? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 12. Explain the thin skull rule. _______________________________________________________________________ _______________________________________________________________________ 172 PAR3:BUSINESS TORTS _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 13. What is the general limitation on damages for pure economic loss? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 14. Identify the rationales for the limit on pure economic loss recovery. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 15. Give an example of an exception where pure economic loss is recoverable based on negligence. _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 16. What is meant by volenti non fit injuria? _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ 17. Explain
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