Business & Commercial Law Exam 2

Purposes of Tort Law

To compensate those who have suffered a loss or injury due to another person's wrongful act, protect legal rights, and deter future wrongful conduct.

Compensatory Damages

Defendant owed a duty of care (measured by the Reasonable Person Standard). Professionals are held to a malpractice standard.

Nominal Damages

Minimal amount ($1) to show wrongdoing when no actual financial harm occurred.

Punitive Damages

To punish egregious/reprehensible conduct and deter others.

Intentional Torts

Result from intentional violation of person or property (fault + intent).

Unintentional Torts (Negligence)

Breach of a duty to act reasonably (fault without intent)

Assault

The intentional, reasonably believable threat of immediate physical harm.

Battery

The unprivileged, intentional, harmful or offensive touching of another.

False Imprisonment

Intentional confinement or restraint without justification using physical barriers, force, or threats.

IIED (Intentional Infliction of Emotional Distress)

Extreme and outrageous conduct exceeding all bounds of decency, resulting in severe emotional distress.

Defamation

False statement of fact, published/spoken to a third party, harming reputation (Libel = written/permanent; Slander = oral). Public figures must prove actual malice (knowledge of falsity or reckless disregard for truth). Absolute Privilege applies in judicial/government proceedings (e.g., Ladd v. Uecker).

Invasion of Privacy

Intrusion into seclusion, false light, public disclosure of private facts, and appropriation of identity.

Business Torts

Wrongful interference with a contractual relationship (requires a valid contract, third-party knowledge, and intentional inducement to breach) or business relationship.

Property Torts

Trespass to land, trespass to personal property, conversion (wrongful taking/retaining personal property even if initially consented), and disparagement of property (slander of quality/title).

Duty

Defendant owed a duty of care (measured by the Reasonable Person Standard). Professionals are held to a malpractice standard.

Breach

Defendant failed to exercise that duty.

Causation

Must prove Causation in fact ("but for" test) AND Proximate cause (legal cause / foreseeability).

Assumption of Risk

Plaintiff knew and voluntarily assumed the risk

Superseding Cause

An unforeseeable intervening event that breaks the causal connection.

Comparative Negligence

Reduces plaintiff's recovery proportional to their fault; under Wisconsin's 51% rule, a plaintiff cannot recover if they are 51% or more at fault.

Strict Liability

Liability without regard to fault. Imposed on abnormally dangerous (ultrahazardous) activities and defective products.

Product Liability Theories

Negligence, Misrepresentation, Strict Liability, and Warranties

Negligence Claims

Manufacturers must exercise due care in design, materials, production, assembly, testing, and labeling/warnings

Strict Product Liability (Restatement (Second) of Torts § 402A): Requirements:

1. Product must be in a defective condition when sold.

2. Defendant must be engaged in the business of selling it.

3. Product must be unreasonably dangerous (beyond ordinary consumer expectations or feasible alternative design available).

4. Plaintiff must incur physical harm to self or property.

5. Defect must be the proximate cause of injury.

6. Goods must not have been substantially changed from time of sale.

Manufacturing Defects

Flawed, damaged, or poorly assembled units deviating from specifications.

Design Defects

Faulty design. Courts use the Risk-Utility Test and Consumer-Expectation Test (requires showing a reasonable alternative design was economically feasible).

Inadequate Warnings

Failure to warn of foreseeable risks or misuses that are not obvious or commonly known.

Market-Share Liability

Used when the specific manufacturer cannot be identified; liability is shared among all firms based on their market share

Defenses to Product Liability

Preemption, Assumption of Risk, Product Misuse (unless foreseeable), Comparative Negligence, Commonly Known Dangers/Knowledgeable Users, and Statutes of Limitations/Repose (Wisconsin has a 15-year Statute of Repose under Wis. Stat. § 895.047(5)).

Clean Air Act (CAA)

Regulates air emissions and stationary/mobile pollution sources

Clean Water Act (Federal Water Pollution Control Act)

Restricts water pollutant discharges into navigable waters.

Safe Drinking Water Act

Sets public drinking water quality standards.

FIFRA Regulates pesticides, fungicides, and rodenticides.

Regulates pesticides, fungicides, and rodenticides

TSCA

Regulates toxic chemical substances

RCRA

Governs hazardous waste "from cradle to grave."

CERCLA

Imposes strict liability for cleaning up historical hazardous waste disposal sites on potentially responsible parties (PRPs).

Environmental Impact Statement (EIS)

Required under NEPA for major federal actions significantly affecting the quality of the human environment.

Sources of Law

Common Law governs services, real estate, employment, and insurance. UCC Article 2 governs the sale and lease of goods.

Four Requirements of a Valid Contract

1. Agreement (Offer and Acceptance)

2. Consideration (Legally sufficient, bargained-for value)

3. Contractual Capacity (Competent parties)

4. Legality (Legal purpose, not against public policy)

Types of Contracts

• Bilateral (Promise for a promise) vs. Unilateral (Promise for performance)

• Express (Stated in words) vs. Implied-in-fact (Inferred from conduct).

• Quasi-Contract (Implied-in-law to prevent unjust enrichment where no actual contract exists).

• Executed (Fully performed) vs. Executory (Not yet fully performed).

• Valid, Void, Voidable, and Unenforceable.

Statute of Frauds

Requires certain contracts to be in writing to be enforceable: land, terms exceeding one year, collateral/secondary promises (debt of another), consideration of marriage, and sale of goods priced at $500 or more.

E-Contracts

Governed by click-on agreements, shrink-wrap agreements, and browse-wrap terms.

Fraudulent Misrepresentation

False statement of material fact, intent to deceive, justifiable reliance, and economic injury.

Complete Performance

Exact performance fulfilling all terms

Substantial Performance

Good faith performance that does not vary greatly and creates substantially the same benefits

Material Breach

Non-performance that excuses the non-breaching party from duties and allows immediate suit for damages. Minor breach only suspends duty or allows damages.

Anticipitary Repudiation

Refusal to perform before performance is due; treated as a material breach.

Discharge by Operation of Law

Material alteration, statutes of limitations, bankruptcy, impossibility/impracticability of performance, and frustration of purpose.

Liquidated Damages

Enforceable if damages were difficult to estimate at formation and the amount is a reasonable estimate (not a penalty).

Rescission & Restitution

Undoing the contract and returning parties to original positions.

Specific Performance

Ordering exact performance; granted only when money is inadequate and subject matter is unique

Reformation

Court correction of a written contract to reflect true intent

Nature of Real Property

Land, structures, fixtures (personal property permanently attached or intended to be a fixture, including commercial trade fixtures), airspace, and subsurface rights.

Fee Simple Absolute

Maximum possible estate/ownership.

Life Estate

Ownership lasting for the duration of a specified individual's life.

Concurrent Ownership

Tenancy in common, joint tenancy, tenancy by the entirety, and community property.

Leasehold Estates

Fixed-term, periodic tenancy, tenancy at will, tenancy at sufferance.

Nonpossessory Interests

Easements, profits, and licenses

Condominiums

Individual unit title plus undivided interest in common areas governed by CC&Rs

Adverse Possession

Acquiring title through open, exclusive, continuous, peaceable, and hostile/adverse occupation for the statutory period (typically 10 years in WI).

Eminent Domain

Government power to take private land for public use (including economic development, Kelo v. New London) upon payment of just compensation via condemnation. State laws restrict this, particularly regarding "blighted" properties

Restrictive Covenants

Private restrictions running with the land

Zoning Laws

Municipal police powers dividing land into residential, commercial, industrial, or conservation districts, subject to variances or special-use permits.