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Chapter 5

Chapter 5 - Miscellaneous Torts Affecting Business.doc

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Department
Accounting
Course
ACC 110
Professor
Marla Spergel
Semester
Fall

Description
Chapter 5 Conspiracy - Usually occurs when two or more defendants agree to act together with the primary purpose of causing a financial loss to the plaintiff. It is hard to prove. - Rules are different if the defendants’ injured the plaintiff by conspiring to perform an unlawful act. In that situation, the court does not have to be satisfied that the defendants’ primary purpose was to hurt the plaintiff. It is enough if the defendants should have known that their actions might have that result. Intimidation - Concerned with unethical business practices. - Occurs when the plaintiff suffers a loss as a result of the defendant’s threat to commit an unlawful act against either the plaintiff or a third party. - plaintiff must prove threat to break duty in tort, contract, or crime - intimidated party submitted to threat Two party Intimidation - Occurs when the defendant directly coerces the plaintiff into suffering a loss. Three-party Intimidation - Occurs when the defendant coerces a third party into acting in a way that hurts the plaintiff. Whether intimidation involves two or three parties, the basic rules remain the same. 1) The plaintiff must prove that the defendant threatened to commit an unlawful act. 2) The tort does not occur unless the threatened party gave in to the intimidation. 3) As long as the other elements of the tort are established, there is no need to prove that the defendant intended to hurt the plaintiff. Interference with contractual relations - Occurs when the 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 Forms of interference with contractual relations - Direct inducement to breach of contract - Indirect inducement to breach of contract Direct inducement to breach of contract - Occurs when the defendant directly persuades a third party to break its contract with the plaintiff. Liability requires four factors: 1) The defendant must know about the contract that exists between the third party and the plaintiff. 2) The defendant must intend to cause the third party to breach that contract. 3) The defendant must actually cause the third party to break its contract with the plaintiff. 4) The plaintiff must suffer a loss as a result of the defendant’s conduct. Indirect inducement to breach of contract - Occurs when the defendant indirectly persuades a third party to break its contract with the plaintiff. - Liability depends on the same 4 factors PLUS proof that the defendant’s actions were themselves unlawful. Unlawful interference with economic relations - Occurs if the defendant commits an unlawful act for the purpose of causing the plaintiff to suffer an economic loss. Three Requirements: 1) There must be intent to injure. 2) There must be an unlawful or illegal act. 3) The plaintiff must suffer an economic loss. Deceit - Occurs if the defendant makes a false statement, which it knows to be untrue, with which it intends to mislead the plaintiff, and which causes the plaintiff to suffer a loss. - Caveat emptor: Let the buyer beware. - As a matter of risk management, business people must not only avoid lying, they must also avoid creating the wrong perception. 1) The defendant must make a false statement. 2) The defendant must know at the time of making a statement, that it is false. It is enough if the defendant acted recklessly, without regard to the truth. But it is not enough if the defendant was merely careless. 3) The defendant must make the statement with the intention of misleading the plaintiff. The statement does not have to be made directly to the plaintiff. 4) The plaintiff must suffer a loss as a result of reasonably relying upon the defendant’s statement. Occupiers’ Liability - Requires an occupier of premises to protect visitors from harm. - Legislation has been enacted in every jurisdiction except Newfoundland, Saskatchewan, and the three territories. Common Law Rules The traditional common law rules recognized 4 categories of visitors. Problems With the traditional system: 1) It can lump together different types of people. Trespassers are trespassers. 2) It is often difficult to distinguish between the different categories. 3) A visitor’s status may change from one moment to the next. 4) It often is difficult to decide whether a danger is hidden or unusual. Type of Visitor Description of Visitor Occupier’s Obligation Trespasser A person who does not have Not to intentionally or recklessly permission to enter the premises. injure a trespasser. Licensee A person who has permission to To protect a licensee from hidden enter the premises, but who does dangers that were actually known not further the occupier’s to the occupier. economic interest Invitee A person who has permission to To take reasonable care to protect enter the premises and who an invitee from unusual dangers furthers the occupier’s economic that the occupier knew or should interests have known about. Contractual Entrant A person who enters into a A contractual obligation to make contract to use the premises, sure that the premises were as rather than to receive services safe as reasonably possible. that are offered on the premises Modified Common Law Rules - Moved away from categorizing visitors and toward increasing the occupier’s obligation. - An occupier must do more than simply refrain from intentionally or recklessly hurting a trespasser. The occupier’s obligations are determined by a number of factors: 1) The age of the trespasser 2) The reason for the trespass 3) The nature of the danger that caused the injury 4) The occupier’s Knowledge of the danger 5) The occupier’s cost of removing that danger. - Licenses and invitees are now generally treated the same. Statutory Rules Most important differences between the common law and the legislation - The common law gener
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