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Chapter 3

LAW 122 Chapter Notes - Chapter 3: Liability Insurance, False Imprisonment, Product Liability

Law and Business
Course Code
LAW 122
Jane Monro

of 3
LAW 122: Chapter 3
Introduction to Tort Law
Tort generally consists of a failure to fulfill a private obligation that was imposed by law
The purpose of tort law is to compensate the plaintiff (victim)
Torts and Crimes
Refers to breach of private obligation
Tortfeasor: a person who has committed a tort
Tort occurs when a private obligation is broken, crime occurs when a public
obligation is broken
Torts and Contracts
Torts are confused with contracts as much as they’re confused with crimes
Both tort and contract involve primary and secondary obligations
o Primary: Tell people how they ought to act
o Secondary: Remedial; tell people how they must act after primary obligations
have been broken
Obligations in tort are imposed by law, in contract, they are imposed by the parties
The only people that can sue or be sued are the parties themselves (doctrine of
Compensation is available in tort and contract, but calculated differently in each
Types of Torts
Intentional torts: occur when a person intentionally acts in certain ways
Assault, battery, false imprisonment, conspiracy, trespass, deceit
Negligence torts: occur when a person acts carelessly
Nuisance, negligence, product liability, occupiers’ liability
Strict liability torts: occur when a person does something wrong without intending to do so and
without acting carelessly
Animals, Rylands v Fletcher
Do not require proof of any sort of intentional or careless wrongdoing, liability is
imposed because the defendant was responsible for the injury caused to the plaintiff
o You don’t have to prove fault
General Principles of Tort law
Liability Insurance (Not a principle of tort law, a form of risk management)
A contract in which an insurance company agrees to pay damages on behalf of a
person who incurs liability
They also have a duty to defend (requires them to pay expenses that are associated
with lawsuits against the insured company)
o Compensatory function aims to fully compensate people who are wrongfully
o Deterrence function discourages people from committing torts by threatening
to hold them liable for losses that they cause
Vicarious Liability
Occurs when a person is held liable for a tort that was committed by another person
o Ex: A family member crashes a car, owner is held responsible
Compensatory Damages
-Standard remedy in both tort and contract
-Defendant is required to pay for the losses that they caused the plaintiff to suffer
-A lost is remote if it is unfair to hold the defendant responsible
-Mitigation: When the plaintiff takes steps to minimize the losses that result from the
defendants tort
Punitive Damages
-Intended to punish the defendant (when they add more insult to make it worse)
-If defendant has done something outrageous, court may impose both compensatory
and punitive damages
Nominal Damages
-Can be awarded for some torts, nominal damages recognize that the defendant
committed a tort even though the plaintiff did not suffer any loss
-Court order that requires the defendant to do something or refrain from doing
Alternative Compensation Schemes
A system that allows a person who has suffered an injury to receive compensation without
bringing an action in tort
Workers compensation
No-fault insurance
Chapter Summary
Tort generally consists of a failure to fulfill a private obligation impose by law
Torts involve private obligations; crimes involve public obligations
Torts generally involve obligations imposed by law; contracts involve obligations
that the parties voluntarily create for themselves
Strict liability torts are limited to situations in which the defendant was involved in an
extraordinarily dangerous activity
Liability insurance: insurance company pays damages on behalf of a person who
incurs liability
Liability insurance furthers tort laws compensation function but undermines its
deterrence function
Victim of a tort usually receives compensatory damages
Tort system doesn’t compensate people whose injuries are innocently caused; its
expensive and inefficient, therefore alternative compensation schemes help out in
some jurisdictions