Business Law - Chapter 8 - Torts

Tort

👉 A wrong that causes harm to someone
👉 Can hurt a person, their property, or their reputation
👉 Usually leads to paying money (damages)

💡 Think: “You did something wrong → you gotta pay”

Civil Law

👉 Deals with problems between people
👉 Goal = compensate (pay back) the victim, not punish

Tort Law

👉 You hurt someone → they sue you
👉 Result: you pay money

Criminal Law

👉 You break a law → government takes you to court
👉 Result: jail, fine, or both

Contract Law

the set of rules that makes sure people keep their promises in agreements

👉 You break a promise or agreement
👉 Result: you pay money

Intentional Tort

👉 When you do something on purpose that leads to harm

You don’t have to mean to hurt someone—just doing the action on purpose is enough

👉 Example: throwing a snowball (on purpose) and hurting someone

Battery

👉 Harmful or unwanted touching
👉 Example: hitting, punching, pushing

Negligence

Being careless and causing harm

👉 Example:
A doctor doing surgery wrong by accident

💡 Not on purpose, just careless

Fraud

👉 Lying or tricking someone to get money
👉 Example: fake deal or scam

Interference with a Contract

👉 Messing up someone else’s business deal on purpose
👉 Example: convincing someone to break their contract

Defamation

A false statement that hurts someone’s reputation

💡 Key idea: it must be FALSE

Libel

👉 Written defamation
👉 Example: false social media post

Slander

👉 Spoken defamation
👉 Example: spreading a lie out loud

Defamation vs Opinion

• Saying “She’s rude” = opinion ❌ (not defamation)

• Saying “She stole money” (when false) = fact ✅ (defamation)

Slander per se

👉 If someone says (out loud) a lie about you involving:

• a crime

• sexual behavior

• a disease

• your job or skills

👉 the law automatically assumes it hurts your reputation (you don’t have to prove it).

💡 Basically: these types of lies are considered harmful no matter what.

Element of Defamation: Defamatory Statement

A harmful statement (must sound like a fact, not opinion)

Element of Defamation: Falsity

It must be false

Element of Defamation: Communicated

Someone else saw or heard it

Element of Defamation: Injury

It harmed the person’s reputation (except in “per se” cases)

Elements of Defamation

1. Defamatory Statement

2. Falsity

3. Communicated

4. Injury

Who starts the case?

Tort Case

The injured person (plaintiff) sues

Who starts the case?

Criminal Case

The government prosecutes

What happens in court? Tort Case

when someone sues another person for harm or injury (not a crime, but a civil issue).

What happens in court? Criminal Case

jail or fine

What happens in court? Contract Case

A legal case where someone says another person or business broke an agreement (contract).

money for broken deal

Libel per se

👉 If someone writes a false statement about you involving:

• a crime

• sexual behavior

• a disease

• your job or skills

👉 the law automatically assumes it hurts your reputation (you don’t have to prove it).

💡 Basically: written lies about these topics are always considered harmful.

Defense in Defamation: Absolute Privilege

👉 Some people can say anything without being sued for defamation

📍 Where?

• Courtrooms

• Government/legislative meetings

👉 Example:
A witness in court can’t be sued for defamation

⚠ BUT:

• Lying on purpose = perjury (a crime)

• Still not defamation

False Imprisonment

Holding someone against their will without a good reason

👉 Must have:

• No permission

• No good/legal reason

👉 Example:
A job won’t let someone leave when they need to → ❌

Shoplifting Situations

Stores CAN stop you IF:

✔ They have a good reason
✔ They act reasonably

👉 Example:

• Holding someone for 20 mins = OK

• Locking someone up for hours = ❌ false imprisonment

Intentional Infliction of Emotional Distress (IIED)

👉 Causing serious emotional harm on purpose

👉 Must be:

• Extreme

• Outrageous (really, really bad behavior)

👉 Example:
Lying about someone’s kids being hurt just to scare them

Assault

👉 Making someone afraid they are about to be hurt (battery)

👉 Example:
Throwing something at someone (even if it misses)

Property Torts: Trespass

👉 Going on someone’s land without permission

👉 Example: Walking onto private property

Property Torts: Conversion

👉 Taking or using someone’s stuff without permission

👉 Example: Taking someone’s car and keeping it

Property Torts: Fraud

👉 Lying or tricking someone for money

👉 Example: Scams or fake deals

Compensatory Damages

Money paid to a person or business to replace what they lost because of someone else’s wrongdoing.

👉 Money to make up for the harm

💡 Goal: put you back where you were before the injury

Types of Compensation: Medical Costs

👉 Doctor bills, hospital, therapy

Types of Compensation: Lost Wages

👉 Money you lost from missing work

Types of Compensation: Pain and Suffering

👉 Money for emotional or physical pain

Single Recovery Principle

You only get one payment for your case, and it must cover everything

👉 This includes:

• money for past expenses

• money for future expenses

💡 You can’t come back later and ask for more money

Future Harm (Pain & Suffering)

👉 Courts try to guess how much someone will suffer in the future

• This is just an estimate, not exact

• If the estimate is reasonable, it will usually not be changed later

👉 Even if something unexpected happens later (like the person dies),
the money still has to be paid

💡 Basically: the court makes its best guess and sticks with it

Punitive Damages

👉 Extra money meant to punish the person who did something really bad

👉 NOT to repay the victim (that’s compensatory damages)

⚠ When are punitive damages given?

👉 Only when behavior is:

• Extreme

• Outrageous

• Reckless or malicious

💡 Think: “This was so bad, we need to punish them”

How Courts Decide Punitive Damages

Courts look at 3 main things:

1. How bad the behavior was
   👉 Was it really harmful or dangerous?

2. Ratio (comparison)
   👉 Punitive damages vs actual harm
   👉 Example: $500 vs $50,000 = might be too much

3. Compare to similar cases
   👉 Is the punishment similar to other cases?

Limits on Punitive Damages

Punitive damages are extra money a person has to pay as a punishment for doing something really wrong, not just to pay back the harm they caused.

👉 Courts don’t want punishments to be too extreme or unfair

👉 Sometimes laws cap (limit) damages

Exxon Valdez Case (Easy Version)

👉 Oil company caused a huge oil spill
👉 Jury gave:

• $507 million (to victims)

• $5 BILLION (punishment)

👉 Supreme Court said:
❌ Too much

👉 New rule:
Punishment should be about the same as the harm (1:1 ratio)

✔ Final: $507 million punitive

Business Torts

when a person or company does something wrong that hurts another business and causes them to lose money.

💡 Basically: unfair or illegal competition

Tortious Interference

👉 When a business messes up another business’s deal or opportunity

There are 2 types:

1. Interference with a Contract

2. Interference with a prospective advantage

Interference with a Contract

Messing with an already existing contract

✅ Must prove 4 things:

1. There was a contract

2. The defendant knew about it

3. The defendant caused someone to break it

4. The plaintiff was hurt (lost money)

👉 Normal competition = OK
👉 Breaking a signed deal = NOT OK

👉 Company A has a deal with Company B
👉 Company C convinces B to break the deal

❌ That’s illegal

This is an example of…

Interference with a Contract

Interference with a Prospective Advantage

It means when someone unfairly gets in the way of a future opportunity you had to benefit (usually to make money).

Example:
You’re about to get a deal with a customer, but another person lies or cheats to stop that deal from happening.

👉 You must show the other business did something independently illegal

✔ Example: lying (fraud, slander)
❌ Just competing = NOT illegal

👉 A company is ABOUT to make a deal
👉 Another company lies or threatens to stop it

❌ That’s illegal

This is an example of…

Interference with a Prospective Advantage

Lanham Act

👉 Protects businesses from false or misleading ads

✅ To win, you must prove:

1. False or misleading statement

2. Used in ads or promotion

3. Caused harm to another business

👉 A company lies and says their product is better than all others
👉 But the “proof” is fake

❌ That breaks the law

This is an example of..

Lanham Act

Tortious Interference with Business Relations

When a person or business unfairly messes up another business’s relationships or deals

💡 Basically: interfering with someone else’s business in a wrongful way

What is this an example of?

• Lying to ruin someone’s deal

• Threatening someone to break a contract

Tortious Interference with Business Relations

What are punitive damages?

extra money a person has to pay when they did something very wrong on purpose or extremely careless.