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Chapter 3

LAW 122 Chapter Notes - Chapter 3: Liability Insurance, Vicarious Liability, Damages

Law and Business
Course Code
LAW 122
Stan Benda

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LAW 122 - Chapter 3
A tort generally consists of a failure to fulfill a private obligation that was
imposed by law.
Torts and Crimes
An obligation in tort law is owed to a person. For instance, I owe an
obligation to you personally to not make defamatory statements about your
past. That obligation will be broke if I falsely tell your employer that your
were once convicted of murder. I will b a tortfeasor a person who has
committed a tort. You will then be entitled to sue me. If you win that lawsuit,
the court will hold me liable and it will probably order me to pay damages to
A tort can be compared with a crime. Whereas a tort occurs when a person
breaks a private obligation, a crime occurs if a person breaks a public
obligation. A public obligation is owed to society as a whole, rather than to
any particular person. Consequently, if something goes wrong, the
government will prosecute the accused on behalf of the whole community.
That is true even if the crime was one (theft) that affected a specific person.
Finally, if the court agrees with the government, then the accused will be
found guilty and may be subject to some form of punishment (fine or
Examples: If I hit you, I will commit the tort of battery and the crime of
assault; if I take your car without permission, I will commit the tort of
conversion and the crime of theft; if I sneak into your house, I commit the
tort of trespass to land and the crime of break and enter.
The idea of allowing a victim to demand compensation from a wrongdoer
developed into the system of private tort law; the idea of allowing the
community to punish a wrongdoer developed into the public system of
criminal law. ***PAGE 61
Torts and Contracts (One Similarity and Four Differences)
Structure (similarity): Both tort and contract involve primary and
secondary obligations. Primary obligations tell people how they ought to act.
For instance, the tort of battery says, “Don’t touch another person in an
offensive way.” The law of contract says, Keep your promises.” Secondary
obligations are remedial. They tell people how they must act after primary
obligations have been broken. In most cases, the defendant is told, Pay
money to the plaintiff as compensation for the losses that you caused.”
Source of Primary Obligations: The first is concerned with the source of
primary obligations. Obligations in tort are simply imposed by law. Even
though you never promised to behave yourself, even though we are
complete strangers, and even if (remarkably) you never heard of such a law,
you must not commit a battery against me. Obligations in contract, are

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created by the parties; if you have an obligation to deliver a car to me, it is
only because you voluntarily agreed to do so.
Privity: When two people enter into a contract, they create a special
relationship for themselves. Consequently, the doctrine of privity states that
the only people who can sue, or be sued, on a contract are the parties
themselves. In contrast, because obligations in tort are simply imposed by
law, there is no need for the parties to create a special relationship for
themselves. I can sue you for battery, even if you never promised to hit me.
Compensation: Compensation is available in both tort and contract; but
calculated differently in each. The purpose of imposing obligations in tort law
is to prevent harm. The tort of battery prohibits you from hurting with
punches and kicks. Consequently, if you have breached your primary
obligation, then you will have a secondary obligation to put me back into
position that I enjoyed at the outset. In contrast, the purpose of creating
obligations in contract is usually to provide benefits. I paid $10,000 to you
because I wanted your car. If you breach your primary obligation, then you
will again be required to compensate me. This time, the goal is to put me
into the position that I expected to enjoy once you fulfilled your promise.
Risk Management: The fact that primary obligations in tort and contract
arise for different reasons also has a significant affect on the issue of risk
management. Because tort obligations are imposed by law, they are more
likely to take a person by surprise, and they may require more than a person
is actually capable of providing. In contrast, because obligations surprise,
and they should never require more than the parties believe they can
actually provide. ***PAGE 63
Types of Torts
Tort law responds to different challenges in a variety of ways. One of its
most important strategies focuses on mental culpability. Because tort law
needs to strike a different balance in different circumstances, some torts
require proof that the defendant acted with a guilty mind, with others do not.
3 Possibilities:
Intentional Torts: occur when a person intentionally acts in certain
ways. Some torts require proof that the defendant intended to hurt the
plaintiff. Others are satisfied by proof the defendant merely intended to
act in a certain way, even if they did not realize that the plaintiff would
be hurt.
Negligence Torts: occur when a person acts carelessly.
Strict Liability Torts: occur when a person does something wrong
without intending to do so and without acting carelessly. It is enough
that the defendant was responsible for the situation that resulted in the
plaintiff’s injury. ***PAGE 64
Strict Liability
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