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A
R
T
1-2
C H A P T E R
1-3
Learning Objectives
1-4
Types and
Classifications of Law
Federal, state, and tribal level:
Constitution: establishes governmental
structure, specific rights and duties
Statute: enacted by legislative body to
regulate conduct
Common Law: case law (judge-made)
Administrative Law: agency rules to
implement enforcement of statutes
1-5
Types and
Classifications of Law
Issued at the chief executive level:
Executive Order: under limited powers
Examples:
http://www.whitehouse.gov/news/orders/
1-6
Important Doctrines
Stare Decisis (let the decision stand) is the
doctrine of precedent applied in common
law
Equity is applied by the judiciary to achieve
justice when legal rules would produce
unfair results
Federal supremacy: a rule of priority for
conflicts between laws that holds the U.S.
Constitution is the supreme law of the land
Supremacy Clause, Article VI, Section 2, of
the U.S. Constitution
1-7
Classification of Law
Criminal law establishes duties to society
Government charges and prosecutes defendant,
who is found guilty or innocent
Convicted defendant will be imprisoned or fined
1-8
Classification of Law
Substantive law establishes rights and
duties of people in society
Procedural law establishes how to
enforce those rights and duties
Public law refers to the relationship
between governments and private
parties
Private law refers to the regulation of
conduct between private parties
1-9
Jurisprudence
Jurisprudence refers to the philosophy
of law as well as the collection of laws
Legal positivism: law is the command
of a recognized political authority
Just or unjust, law must be obeyed
Jurisprudence
Legal realism defines law as the
behavior of the judiciary as they rule on
matters within the legal system
Thus law in action dominates positive law
1-11
Legal Reasoning
Basically deductive, with legal rule as
major premise and facts as the minor
premise
Result is product of the two
1-12
Statutory Interpretation
Plain meaning rule: court applies statute
according to usual meaning of the words
Courts examine legislative history and
purpose when plain meaning rule is
inadequate
Courts may interpret a statute in light of a
general public purpose or public policy
Courts follow prior interpretation of a statute
(precedent) to promote consistency
1-13
Thought Question
What do you think the authors of the
U.S. Constitution would think about
current legal issues in our society?
1-15
P
A
R
T
2-2
C H A P T E R
The Resolution of
Private Disputes
In case of
dissension, never
dare to judge till
you have heard
the other side.
Euripides
2-3
Learning Objectives
Identify sources and types of law
Identify the law that takes precedence when
two types of laws conflict
Differentiate criminal law from civil law
Differentiate schools of jurisprudence
Describe the role of precedent (stare decisis)
Explain major techniques of statutory
interpretation
2-4
2-5
Subject-Matter Jurisdiction
Subject-matter jurisdiction refers to a courts
authority to hear a particular type of dispute
Courts of criminal jurisdiction hear trials of
crimes and misdemeanors
Offenses against the public at large
Courts of civil jurisdiction hear and decide
issues concerning private rights and duties
(e.g., contracts, torts), and non-criminal
public matters (e.g., zoning, probate)
2-7
Civil Procedure
A set of rules establishing how a lawsuit
proceeds from beginning to end
In an adversarial system, the plaintiff
bears the burden of proof to prove
his/her case by a preponderance of the
evidence
Once plaintiff has made a prima facie
case (i.e., proved the basic case), the
burden of proof may shift to defendant
2-10
Opening
Statement from
each party
2-13
2-14
Thought Question
If you were served with a lawsuit, what
would you do about it?
2-19
P
A
R
T
Crimes
Intentional Torts
Negligence and Strict Liability
Intellectual Property and Unfair
Competition
6-2
C H A P T E R
Intentional Torts
6-3
Learning Objectives
Define tort and explain types of
wrongfulness
Understand concept of damages
Understand elements of intentional
torts that interfere with personal or
property rights, including assault,
defamation, invasion of privacy,
nuisance, and trespass
6-4
Definition of a Tort
A tort is a civil wrong that is not a
breach of a contract
Four types of wrongfulness are
involved:
Intent
Recklessness
Negligence
Strict liability
6-5
The Basics
Standard of proof that plaintiff must
satisfy in a tort case is preponderance of
the evidence standard
A plaintiff who wins a tort case usually
recovers compensatory damages for the
harm suffered as a result of defendants
wrongful act
Particularly bad behavior may result in an
award of punitive damages
6-6
Battery
Assault
Intentional Infliction of Emotional Distress
False Imprisonment
Defamation
Invasion of Privacy
Misuse of Legal Proceedings
Deceit (Fraud)
6-7
Battery
Intentional and harmful or offensive
touching of another without the
persons consent
No liability if person consented
Assault
Assault occurs when there is an intentional
attempt or threat to cause a harmful or
offensive contact with another person, if the
attempt causes a reasonable apprehension
of imminent battery in other persons mind
Irrelevant whether threatened contact really
occurs, as long as plaintiff had apprehension
of immediate or imminent contact
Plaintiff must actually see or feel the potential
contact
6-9
Intentional Infliction of
Emotional Distress
Most courts allow recovery for emotional
distress even if no other tort is proven
All courts require the wrongdoers conduct
to be outrageous before liability is imposed
Most courts apply reasonable person test
See Durham v. McDonalds Restaurants of
Oklahoma, Inc.: Court applied elements of
False Imprisonment
False imprisonment is intentional
confinement of another for an appreciable
time without his or her consent
confinement must be complete, though a few
minutes is enough
no liability if plaintiff consented to confinement
Defamation
Defamation is an
1)
2)
3)
4)
unprivileged
publication of
false and defamatory
statements concerning another person
Defamation
Another defense to defamation is
privilege (Calor v. Ashland Hospital Corp.)
Examples: statements made by
participants in judicial proceedings, by
officials in the course of their duties, by one
spouse to the other in private, and fair and
accurate media reports (fair comment) of
defamatory matter that appears in
proceedings of official government action
or originates from public meetings
6-13
6-15
Invasion of Privacy
Invasion of privacy refers to four distinct
torts:
Intrusion on Solitude or Seclusion
Applies only with reasonable expectation of
privacy
6-16
Deceit (Fraud)
Deceit (or fraud) is the formal name for
the tort claim available to victims of
knowing or intentional misrepresentations
Often tied to a breach of contract claim
Requires proof of false statement of material
fact, knowingly or recklessly made by
defendant with intent to induce reliance by
the plaintiff, along with actual, justifiable,
and detrimental reliance on plaintiffs past
6-18
6-19
Trespass to Land
Any unauthorized or unprivileged intentional
intrusion upon anothers real property,
including physically entering plaintiffs land,
causing another person or object to do so,
remaining on the land after ones right to
remain has ceased, and invading airspace
above land or subsurface below
Intent required for liability is simply the intent to
be on the land, so a person may be liable even if
the trespass resulted from a mistaken belief that
entry was legally justified
6-20
Private Nuisance
Involves some interference with plaintiff s
use and enjoyment of the land
Unlike trespass to land, nuisance does not
require a physical invasion of the property
Includes odors, noise, smoke, light, vibration
Conversion
Defendants intentional exercise of
dominion or control over plaintiffs
personal property without plaintiffs
consent through:
Acquisition
Removal
Transfer to another
Withholding possession
Destruction or alteration
Use
6-22
Thought Question
For several intentional
torts, such as defamation
or false imprisonment,
there may be rights
belonging to the
defendant, such as free
speech or protection of
property. How should a
judge or jury balance
these interests?
6-23
P
A
R
T
Crimes
Intentional Torts
Negligence and Strict Liability
Intellectual Property and Unfair
Competition
7-2
C H A P T E R
Negligence and
Strict Liability
Mistakes are a
fact of life.
It is the response
to error that
counts.
Nikki Giovanni
7-3
Learning Objectives
Identify the elements of negligence
Define the reasonable care standard
and the role of for eseeability
Explain whether a defendant has
breached a duty of reasonable care
and applicable defenses
Understand special doctrines and
injuries in the law of negligence
7-4
Negligence
Elements of a negligence
claim are:
1. Defendant owed a duty of
care to plaintiff,
2. Defendant committed a
breach of duty,
3. Breach was actual and
proximate cause of the injury
experienced by plaintiff
7-5
7-9
Negligence Per Se
The defendants violation of such laws
may create a breach of duty and may
allow the plaintiff to win the case if the
plaintiff
(1) was within the class of persons
intended to be protected by the statute
or other law, and
(2) suffered harm of a sort that the statute
or other law was intended to protect
against
7-10
7-12
Defenses:
Contributory Negligence
Contributory negligence is the plaintiff
s failure to exercise reasonable care
for his/her own safety
Example: auto accident in which
defendant rear-ended plaintiff but
alleges that plaintiff was talking on a
cell phone and not driving carefully
7-14
Comparative Negligence
Contributory negligence used to
be a complete defense, but
most states enacted
comparative negligence
systems in which a court or jury
determines relative negligence
of parties and awards damages
in proportion to each partys
degree of negligence
See Berberich v. Jack
7-15
Defenses:
Assumption of Risk
Assumption of risk is plaintiffs
voluntary consent to known
danger
Example: plaintiff snowboards
and breaks leg during a fall
Strict Liability
Liability without or irrespective of fault
Thus, a defendant is liable even though
s/he did not intend to cause harm and
did not act recklessly or negligently
Basic for product liability cases
7-17
Strict Liability
Imposing strict liability is a social policy
decision that risk associated with an
activity, especially abnormally dangerous
activities, should be borne by those who
pursue it, rather than by innocent persons
who are exposed to that risk
7-18
Thought Question
Does tort law have a useful purpose in
society? Do the remedies make sense?
7-19
Sales
P
A
R
T
20-2
C H A P
E R
20
Product Liability
A manufacturer is not through with
his customer when a sale is
completed. He has then only
started with his customer.
Henry Ford, founder of Ford Motor
Company, in My Life and Work
(co-written with Samuel Crowther,
1922)
20-3
Learning Objectives
Explain what is required to create an
express or implied warranty
Identify major categories of product
liability claims based in negligence
Differentiate strict liability claims from
those based on negligence theory
Describe the role of comparative
negligence
20-4
20-5
Express Warranty
UCC 2313(1): express warranty may
be created in any of three ways:
If affirmation of fact or promise about
goods becomes part of the basis of
the bargain
Statements of value or opinion and sales
puffery do not constitute a warranty
Advertisements may contain statements
of warranty as well as sales puffery
20-6
Express Warranty
Two other express warranties:
A description of the goods that
becomes part of the bargain
creates an express warranty that the
goods will conform to description
A sample or model of goods to be
sold creates an express warranty
that goods will conform to sample
20-7
Implied Warranties
Implied warranties are created by
operation of law rather than sellers
express statements
Warranty of merchantability [UCC 2-314(1)]
Seller must be a merchant in the goods of the
kind sold
Implied Warranty of
Fitness for a Particular Purpose
Warranty of fitness for a particular purpose
implied if: (1) seller has reason to know a
particular purpose for which buyer requires
the goods; (2) seller has reason to know that
buyer is relying on sellers skill or judgment
for the selection of suitable goods; and (3)
buyer actually relies on sellers skill or
judgment in purchasing the goods
See Moss v. Batesville Casket Co.
20-10
Negligence Theory
Product liability suits based on negligence
allege that manufacturer or seller
breached a duty to plaintiff by failing to
eliminate a reasonably foreseeable risk of
harm:
negligent manufacture of the goods (including
improper materials and packaging)
negligent inspection
negligent failure to provide adequate warnings
negligent design
20-11
20-12
20-13
20-14
20-15
Damages
Consequential damages: personal
injury, property damage, indirect
economic loss (e.g., lost profits or lost
business reputation), and noneconomic
loss, such as pain and suffering, physical
impairment, mental distress, loss of
enjoyment of life, loss of companionship
or consortium, inconvenience, and
disfigurement
20-16
Damages
Basis-of-the-bargain damages:
Buyers of defective goods loss of full value for
the goods purchase price is direct economic
loss (value of goods as promised under the
contract minus value of goods as received)
Punitive damages:
Intended to punish defendants who have
acted in an especially outrageous fashion,
and to deter them and others from so acting
in the future
20-17
Disclaimers
Product liability disclaimer is a clause in the
sales contract whereby the seller attempts
to eliminate liability it might otherwise have
under the theories of recovery described
earlier in the chapter
Remedy limitation is a clause attempting
to block recovery of certain damages
Example of time limitation: 30 day
warranty
20-18
Defenses
Three main defenses in
a product liability suit
are the overlapping trio
of product misuse,
assumption of risk, and
contributory negligence
What could happen on a
construction site? What
defenses would exist?
20-19
Comparative Negligence
Most states require fact-finder to apportion
damages based on relative fault of plaintiffs
and defendants percentage shares of the
total fault for the injury
Plaintiff is awarded total provable damages
times defendants percentage of fault
Green v. Ford Motor Co.: fact-finder shall
apportion fault to injured person only if fault of
injured person is a proximate cause of injuries
for which damages are sought
20-20
Preemption and
Regulatory Compliance
Preemption defense rests on a federal
supremacy premise, that federal law
overrides state law when the two conflict
Riegel v. Medtronic, Inc.: state claims by
plaintiffs preempted by federal statute
dealing with medical devices
20-21
Thought Question
What is your opinion
of product liability
lawsuits? If you were
injured by a defective
product, would you
file a lawsuit against
the manufacturer?
20-22
Agency Law
P
A
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T
35-2
C H A P
E R
35
35-3
Learning Objectives
Know how an agency relationship
is created and terminated
Distinguish employees from
nonemployee agents
Recognize when an agent risks
breaching a fiduciary duty
35-4
Overview
Agency is a two-party relationship in
which one party (agent) is authorized to
act on behalf of and under the control
of another party (principal)
Anybody may be an agent or principal,
but the agreement is voidable by
minors and the mentally incapacitated
35-5
Agency Authority
An agent can bind his principal only when
the agent has authority to do so
Two forms: actual or apparent authority
Actual authority is express or implied
Express authority is created by the
principals actual words (written or oral)
Example: I want to hire you as my real
estate agent to sell my house.
35-6
Implied Authority
Agent has implied authority to do
whatever it is reasonable to assume
that the principal wanted the agent to
do given principals statements and
surrounding circumstances
Example: a person hired as general
manager in a restaurant will have broad
authority to run the business while a person
hired as a cashier will have limited authority
35-7
Apparent Authority
Apparent authority arises when principals
conduct leads a third party to believe
that an agent (who lacks actual authority)
is authorized to act a certain way and the
third party reasonably relies on the
appearance (cloak) of authority
To protect third parties, agency law allows
agents to bind a principal on the basis of
apparent authority
35-8
Employee or
Independent Contractor?
An agency-based case may depend on
whether a person who contracts with the
principal is an employee (servant) or
independent contractor
No clear distinction, but the Reid factors
(listed in Eisenberg v. Advance Relocation &
Storage, Inc.) aid in decision making: right to
control physical details of the work, skill required,
source of tools, location, schedule control, duration
of relationship, payment method, benefits, tax
treatment of hired party, uniqueness of work
35-9
35-10
Termination of Agency
Termination by act of the
parties includes:
At a time or event stated in the
agreement
When agency was created to
achieve a special purpose and
the purpose was achieved
By mutual agreement of the
parties
At the option of either party
35-13
Termination of Agency
Termination by operation of law includes:
Serious breach of the agents duty of loyalty
Principals permanent loss of capacity or
agents loss of capacity to perform agency
business
Change in value of agency property or
subject matter (including loss or destruction)
Changes in law making the agency illegal
Changed business conditions or outbreak of
war
35-14
Thought Questions
Have you been an
agent or a principal?
Do you think the
agency rules of liability
are fair?
What are the ethical
issues involved in an
agency relationship?
35-16
Agency Law
P
A
R
T
36-2
C H A P
E R
36
36-3
Learning Objectives
Know when an agent has authority
to bind a principal to a contract
Understand when an agent may be
liable on contracts s/he makes for
the principal
Recognize when an agents
conduct makes a principal liable for
torts committed by the agent
36-4
36-5
Ratification
In ratification, a principal becomes
obligated for an unauthorized act done
by an agent or person posing as an agent
Act in question usually is contract creation
36-7
36-8
36-9
Direct Liability
A principal may incur direct liability for an
agents torts because the principal is at
fault and liability need not be imputed
Example: sales agent merely applied the
dealerships deceptive sales policies
36-10
Respondeat Superior
The doctrine of respondeat superior (let
the master answer): a principal who is an
employer is liable for torts committed by
agents (1) who are employees and (2)
who commit the tort while acting within
the scope of their employment
Principal liable for employees negligent
and intentional torts
A rule of imputed or vicarious liability
36-11
Scope of Employment
Generally an employees conduct is
within the scope of employment if the
conduct meets each of four tests:
36-13
Thought Questions
Do you think the doctrine of respondeat
superior is good policy? Why or why not?
36-16