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Chapter 5

ch. 5 -Miscellaneous Torts Affecting Business.docx

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Law and Business
LAW 122
Theresa Miedema

Chapter 5 – Miscellaneous TortsAffecting Business - Tort law with a few exceptions, covers every type of private wrongdoing (As opposed to criminal wrongdoing) that is not a breach of contract - Many of the torts require proof of the defendant’s intention – it is enough that the defendant intended to act in a certain way. The plaintiff doesn’t have to prove that the defendant intended to either commit a tort or cause harm o Consequently, ex. you will commit the tort of trespass by walking on my lawn as long as you intent to walk on that piece of grand – even if you mistakenly believe that you own it Intentional Torts - Occurs when a person intentionally acts in certain ways, rather then merely acting careless - Meaning of “intention” differs depending on tort: o Ch. 4 torts require mere intention to act a certain way o Some torts require intention to harm plaintiff  Includes knowledge by tortfeasor that injury was reasonably foreseeable Conspiracy - There is no tort if one person purposely imposes an economic injury on another o However, the same act may trigger liability if it’s performed by several people working together – that is true even though the act in question is otherwise perfectly lawful o Tort of conspiracy – usually occurs when two or more defendants agree to act together with the primary purpose of causing the plaintiff to suffer a financial loss  This tort is hard to prove - The courts are reluctant to find that the defendants co- operated for the primary purpose of hurting the plaintiff • Plaintiff must prove: o If actions were lawful, then conspiracy is difficult to establish b/c the court will require proof that the defendant’s primary purpose was to hurt the plaintiff o If the defendants conspired to perform an unlawful act – they might agree to commit a tort, or to violate the criminal code, labour relations legislation or licensing regulations – if so, the court will merely require proof that the defendants should have known that their actions might hurt the plaintiff o The law generally condones aggressive competition between individuals, its sense of fair play may be offended if several people conspire against another Intimidation - Tort of intimidation is concerned with unethical business practices o 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 o Two-party intimidation occurs when the defendant directly intimidates the plaintiff into suffering a loss. Ex. the manager of a supermarket might use threats of physical violence to frighten the owner of a small convenience store into closing down o Third-party intimidation occurs when the defendant intimidates a 3 party into acting in a way that hurts the plaintiff. Ex. in the case of rookes v. barnard, the plaintiff was an employee of an airline, the defendant, a trade union, was angry with him as a result of a labour dispute. The union threatened the airline with an illegal strike unless it fired the plaintiff. The plaintiff successful sued the defendant after the airline gave in to that pressure and fired him - The plaintiff must prove: o The defendant threatened to commit an unlawful act, such as a crime, a tort or even a breach of contract o The tort doesn’t occur unless the threatened party gave in to the intimidation. Ex. the plaintiff wouldn’t have won in rookes v. barnard if the airline had ignored the unions threat o As long as the other elements of the tort are established, there’s no need to prove that the defendant intended to hurt the plaintiff. Ex. intimidation may occur even if the tortfeasor was motivated by a desire to benefit them, rather than injure the plaintiff. Interference with Contractual Relations - One of the most effective ways of gaining an advantage over a competitor in the business world is to hire away its best workers or otherwise prevent those people from performing their jobs (esp. in professions and industries that employ highly skilled personnel) - Interference with contractual relations occurs when the defendant disrupts a contract that exists between the plaintiff and a third party 1) Direct inducemenrdto breach of contract occurs when the defendant directly persuades a 3 party to break its contract with the plaintiff. • Ex. convince customer to break agreement, or employee to quit job o Liability requires (plaintiff must prove): rd 1) The defendant must know about the contract that exists between the 3 party and the plaintiff. The defendant doesn’t have to know all the details of the contract 2) The defendant must intend to cause the 3 party to breach that contract. The defendant doesn’t have to intend to hurt the plaintiff. The tort may be committed even if the defendant is motivated by a desire to benefit itself 3) The defendant must actually cause the 3 party to break its contract with the plaintiff. Ex. the defendant might hire the 3 party for a job that makes it impossible for that person to work for the plaintiff. If the defendant simply rd informs the 3 party about the adv. and disadv. of working w. for the plaintrdf, the judge will ask whether the defendant actually encouraged the 3 party to commit a breach of contract 4) The plaintiff must suffer a loss as a result of the defendant’s conduct. In most cases, that requirement is satisfied by the fact that the 3 party didn’t perform its contract with the plaintiff o In addition to suing the defendant in tort for inducing breach of contract, the plaintiff can also sue the 3 party in contract for the actual breach. But the plaintiff can’t recover full damages under both actions. If the defendant’s conduct is particularly outrageous, the plaintiff may be entitled to recover punitive damages, as well as compensatory damages under tort 2) Indirect inducement to breach of contract occurs when the defendant indirectly rd persuades a 3 party to break its contract with the plaintiff. • Ex. Prevent employees from going to work, or steal worker’s tools to prevent performance  Plaintiff must prove: • Same four factors above, + proof that the defendant’s actions were themselves unlawful • Ex. the tort is not committed if a union (the defendant) calls a legal strike that causes a company (the 3 party) to breach its contract with a customer (the plaintiff) Unlawful Interference with Economic Relations - May occur if the defendant commits an unlawful act for the purpose of causing the plaintiff to suffer an economic loss - Court case: Reach MD v. PMAoC pg. 111 - Plaintiff must prove: o Intent to injure plaintiff (Act directed toward plaintiff) o Unlawful or illegal act (unauthorized action sufficient) o Plaintiff suffered economic loss Deceit - The tort of deceit: encourages ethical behaviour in the business world o Occurs if the defendant makes a false statement, which they know to be untrue made with intent to mislead the plaintiff, causing the plaintiff to suffer a loss o Risk mngmt: business people must not only avoid lying, but avoid creasing the wrong perceptions o Plaintiff must prove: 1) The defendant made a false statement • Includes half-truths, failure to update info, and silence when defendant has duty to disclose o General rule in the commercial world is caveat emptor: “let the buyer beware” – the seller is usually not obligated to volunteer info, the buyer is responsible for asking questions and making investigations. There are exceptions – Ex. if selling a hose, required to warn you about hidden defects that make the building dangerous or unfit for habitation, if you fail to do so – liable for silently deceiving. Ex. buying an insurance policy – duty to disclose impt info, if you don’t – may be unable to claim a benefit under the policy 2) Defendant must know at the time of making the statement, that it’s false – it’s enough that the defendant acted recklessly in determining the truth 3) The defendant must make the statement w. the intention of misleading the plaintiff. The statement doesn’t have to be made directly to the plaintiff. However the court must be satisfied that the defendant intends to deceive the plaintiff, or at least was substantially certain that the plaintiff would’ve been mislead. 4) The plaintiff must suffer a loss as a result of reasonably relying upon the defendant’s statement. The plaintiff’s reliance is “reasonable” if a reasonable person might have reacted to the defendant’s statement in the same way o Generally unreasonable to rely on puff, prediction or opinion Remedy: - Compensatory damages look backward, rather than forward – the plaintiff is entitled to be put into the position that they would have enjoyed in the defendant had not lied – not into the position they would have enjoyed it the defendant’s statement had been true Occupiers’Liability - Tort of occupiers’ liability requires an occupier of premises to protect visitors from harm o Occupier: any person who has substantial control over premises. The critical element is control, not ownership. Atenant can control an apartment w/o owning it. o Visitor: any person who enters onto premises. o Premises: include more than land.Apartments and offices certainly count, but occasionally, so do elevators, vehicles, ships, trains, and airplanes  Most businesses still occupy premises that are visited by customers, supplies, sales reps, cleaners, govn’t officials, trespassers, etc. if one of those visitors trips over a step, slips on spilled food, etc. the business may be held liable as result of being the occupier. - Occupiers’liability differs across jurisdictions Common Law Rules - there are a number of problems w. the traditional system of occupiers’liability: 1) Aperson who breaks into an office is a trespasser, but so is a child who curiously wanders onto a construction site – it seems unfair that the occupier shouldn’t have to do more for the child than for the criminal 2) Hard to find distinguish between licensees and invitees. Ex. does a visitor to a municipal library or a provincial park provide an economic benefit to the occupier? Should the visitor’s ability to recover compensation for a loss depend upon the answer to that narrow question? 3) Avisitor’s status may change from one moment to the next. Ex. a customer who refuses to leave a store is transformed from an invitee to a trespasser 4) Often its difficult to decide whether a danger is hidden or unusual. Does an icy parking lot during a Canadian winter satisfy either requirement? Oc c upie r s ’   L i a b i l i t y:   T r a d i t i on a l   C om m on   L a w   T r a dit io n a lly ,  o c c u p ie r s ’  o b lig a t io n  v a r ie d w it h  t y p e  o f  v is it o r   M a n a g in g  t h e  L a w , 4 e  o p y r ig h t   ©  2 0 1 4  P c . r s o n  C a n a daC h a p t e r  5 ­ 1 4   more info on pg. 116 Statutory Rules pg 117 - 6 provinces enacted occupier liability legislation:Alberta, bc, Manitoba, nova scotia, Ontario, pei - New Brunswick removed tort of occupiers’liability using tort of negligence instead - Differences between common law and the legislation: o Common law applies to dangers that are created by the condition of the premises. This applies to activities that occur on the premises as well as conditions. o Standard of care no longer depends upon a visitor’s classification  No special distinctions between hidden or unusual dangers • An occupier must use reasonable care based on: o The potential danger to the visitor o The occupier’s cost of removing the danger o The purpose of the visit o The nature of the premises o InAlberta, an occupier does not have to use reasonable care to protect some type of trespassers o Occupier is allowed to issue a warning sign to avoid liability o Under common law, landlord generally cannot be held liable for injuries that person suffers while visiting tenant, but under statute landlord may be held liable to visitor if it fails to make repairs under its lease with tenant, ex. guest of tenant falls in stairwell due to absence of handrail Nuisance - The tort of nuisance – involves land – occurs when the defendant unreasonably interferes with the plaintiff’s use and enjoyment of their own land - There’s a tension between the way in which the defendant wants to use their property and the way in which the plaintiff uses their property - Anuisance occurs if the defendant interferes with the plaintiff’s use of their land. Interference can happen in a variety of ways: o Physical damage to the plain
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