Frauds and Negligence

What must be true for fraud to exist?

The party must intentionally or recklessly lie or intentionally or recklessly omit key information.

Legal intent

On purpose; knowing and being aware about what you are doing

Legal recklessness

Being so apathetic or careless that you do not even care or concern yourself with the truth

Scienter

Knowingly or recklessly dealing with deception and trying to hide that fact. Someone trying to hide something from you.

Material Fact

It is a fact that is relevant to the decision by the other party. It is not legal fraud to lie about stupid, meaningless, or insignificant opinions, beliefs, tastes, or even facts

Reasonable Reliance

The victim reasonably trusted the side that lied, and the victim could not have reasonably or easily discovered said lie. 

When is reasonable reliance not qualified?

If the victim could have easily discovered the lie, or even discovered the lie but continued with the transaction, then reasonable reliance will not be found

Negligence

Failure to exercise a reasonable standard of care consistent with a particular status, role, or situation. It is based on recklessness.

What factors qualify for legal negligence?

1) A duty of care consistent with a duty, role, or situation

2) Which is reasonable given that duty, role, or situation

3) Party breaches that duty

4) proximately causing

5) A legally recognizable and foreseeable harm to victim

Comparative Negligence

Harmed parties who were partially responsible for their own harm will have their award reduced in proportion to their degree of fault in their own harm.

Comparative Negligence Formula

Initial Award (% they were legally liable)= Actual award amount

How is duty determined in negligence?

•       DUTY is present because of a special relationship which exists between the harmed party and the negligent party.

•       A storeowner has a duty to customers to provide a safe environment.

•       A hospital has a duty to patients to provide safety and a good standard of care

•       There are general duties to others to do what is possible to avoid harming them

What is the key to negligence liability?

Foreseeable Risk

Foreseeable Risk

You are liable for any harm that makes sense from your carelessness.

Example of Foreseeable Risk

Scenario: A grocery store mops the floor but doesn't put up a "Wet Floor" sign.

Foreseeable Risk: It's predictable that customers walking through the store could slip on the wet floor and get injured.

Result: If a customer slips and breaks their arm, the store is liable because:

• The risk of someone slipping was foreseeable

• They failed to take reasonable precautions (putting up a warning sign)

• The injury (broken arm) directly resulted from that carelessness

Actual Cause

What started the process that led to the harm, no matter what happened between the cause and the harm.

Raquel, a supermodel, goes out for a walk in the park.  Lou, a guy walking his dog at the park, starts cat-calling Raquel, such that he does not pay attention to where he is going and walks right into a pole knocking himself out.  Ted, a driver, is so distracted looking at Raquel and then Ted slam into the pole that he almost hits a car driven by Bill and, in an effort to avoid a crash, drives into a restaurant causing Francine to burn herself while drinking soup. Who is liable for the actual cause here, and who is not?

Lou is not at fault because he is not the guy driving the car. He was only hit by the pole. Ted was at front because he should’ve paid attention to the world instead of looking at Raquel, the model. Not Bill’s fault because he was just minding his own business.

What is the proximate cause test?

You can connect one thing to the other

Superseding cause

Much bigger than what can be expected or foreseeable.

Example of superseding clause

Scenario: A restaurant serves spoiled food to a customer, making them sick.

Expected/Foreseeable: The customer gets food poisoning and stays home from work.

Superseding Cause: While driving to the hospital feeling sick, the customer gets hit by a drunk driver running a red light at 100 mph.

Result: The restaurant is liable for the food poisoning, but NOT for the car accident injuries. The drunk driver's reckless behavior is a superseding cause that's independent and extraordinary enough to break the chain of liability.

In order to establish liability under the New York dram shop law, you must be able to show the following:

You were injured by a person who was intoxicated at the time of your injury

What makes an alcohol vendor liable for violating the NY dram shop law?

If the bar serves alcohol to anyone who is under 21 or is already intoxicated

Negligence per se

A legal doctrine where a defendant is considered negligent automatically because they violated a statute, regulation, or ordinance that was designed to protect against the type of harm that occurred.