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Chapter 5

Chapter 5 - Miscellaneous Torts Affecting Business


Department
Law and Business
Course Code
LAW 122
Professor
Theresa Miedema
Chapter
5

Page:
of 7
Chapter 5 Miscellaneous Torts Affecting Business
BACKROUND RULES
recurring tension in business law
oaggressive competition vs fair play
omarket forces vs legal intervention
acts permitted unless specifically prohibited
obusiness torts: the exception not the rule
CONSPIRACY
Conspiracy: occurs when two or more defendants agree to act together with the
primary purpose of causing the plaintiff to suffer a financial loss
If the actions are:
oLawful the court will require proof that the defendants’ primary purpose was to
hurt the plaintiff
oUnlawful the court will merely require proof that the defendants should have
known that their actions might hurt the plaintiff
INTIMIDATION
Intimidation: occurs when the plaintiff suffers a loss as a result of the defendants
threat to commit an unlawful act against either the plaintiff or a third party.
oTwo-party intimidation: when the defendant directly coerces the plaintiff into
suffering a loss.
oThree-party intimidation: occurs when the defendant coerces a third party into
acting in a way that hurts the plaintiff
Basic rules must be followed for presence of intimidation
o(1) the plaintiff must prove that the defendant threatened to commit an unlawful act
o(2) the tort does not occur unless the threatened party gives in to the intimidation
o(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.
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INTERFERENCE QITH CONTRACTUAL RELATION
Interference with contractual relations: when the defendant disrupts a contract
that exists between the plaintiff and a third party
oDirect 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.
oIndirect inducement to breach of contract: occurs when the defendant
indirectly persuades a third party to break its contract with the plaintiff.
oLiability depends on four factors
(1) The defendant must know about the contract that exist between the third
party and the plaintiff.
(2)(3) the defendant must intend to cause and actually cause the third party to
breach that contract
(4) the plaintiff must suffer a loss as a result of the breach of contract
**indirect inducement to breach of contract also includes proof that the
defendants actions were themselves unlawful
o
UNLAWFUL INTERFERENCE WITH ECONOMIC RELATIONS
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.
Summary of Business Torts
Name of tortUnlawfulness Intent to harm
Conspiracy Maybe be lawful or
unlawful
Lawful - hurting plaintiff must be defendants
primary purpose
Unlawful –hurting plaintiff must be foreseeable
Intimidation Threaten unlawful actAct must be directed at plaintiff but hurting
plaintiff need not be defendants primary
purpose
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Interference with
contractual relation
Indirect inducement to
breach of contract
defendants act must be
unlawful
Direct inducement to
breach of contract
defendants act may be
lawful or unlawful
Defendants act must be directed at plaintiff
but hurting plaintiff need not be defendants
primary purpose
Unlawful
interference with
economic relations
Defendants act must be
unlawful or unauthorized
Defendants act must be directed at plaintiff ->
hurting plaintiff need not be defendants
primary purpose
DECEIT
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.
o(1) the defendant must make a false statement
The defendant may be held liable for a half-truth or for failing to update
information
** General rule is caveat emptor let the buyer beware
Avoid lying and avoid creating wrong perception
o(2) the defendant must know, at the time of making a statement, that it is false
o(3) the defendant must make the statement with the intention of misleading the
plaintiff
o(4) the plaintiff must suffer a loss as a result of reasonably relying upon the
defendants statement
Reasonable if a reasonable person might have reacted in the same way
Defendants statement mhas to refer to a past or present fact
Statement of fact may be implied by an opinion, a prediction, or a puff
OCCUPIERS LIABILITY (**SEE Legislation occupiers liability act*)
Occupiers liability: Requires an occupier of premises to protect visitors of from harm
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