MGMT 311 Exam 2

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163 Terms



a civil wrong not arising from a break of contract, but a breach of legal duty that proximately causes harm or injury to another

  • it is designed to compensate those who have suffered injury or loss due to another’s actions

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Purpose of Tort

to provide relief and remedies for the violations of protected interests

  • personal safety, physical injury or freedom of movement property

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Damage vs. Damages

Damage- refers tot he harm or injury to person or property

Damages- refers to monetary compensation for such harm or injury

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Types of Damages

  • Compensatory

    • Special Damages

    • General Damages

  • Punitive

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to compensate or reimburse the plaintiff for actual loss or damage- to make whole

  • special damages

  • general damages

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Special Damages

quantifiable loss

  • lost wages, medical expenses, replacement items

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General Damages

nonquantifiable loss

  • pain and suffering, physical and emotional damage, loss in companionship, loss of consortium, disfigurement, loss of reputation

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Punitive damages

punish the defendant or wrong doer and deter others

  • only reserved for truly bad or reprehensible behavior

  • usually involving intentional torts

  • used when a suit involves Gross Negligence

  • Excessive amounts may involve due process issues

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Gross Negligence

intentional failure to perform a manifest duty in reckless disregard of the consequences of such a failure for the life or property of another

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Legislative caps on Damages

some states have limited the amount of damages that can be awarded for various claims

  • Battle of lobbyist- Insurance companies and trial attorneys

  • Medical Malpractice cases- limits even bans

    • 250-500k non special damages

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Two types of Torts

  • Intentional

  • Unintentional

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Intentional Torts

Fault plus intent

  • throwing a punch during a fight

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Fault without intent

  • negligence or breach of duty to act reasonable

  • acting wild and carelessly swinging your arms

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Defenses for Torts

  • consent

  • comparative negligence

  • SOLs

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When the plaintiff agrees to the act that caused an injury

  • no liability

  • most common

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Comparative negligence

who was most at fault for the injury

  • assessing proper blame

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SOLs (Statue of Limitations)

the time limits for being an action

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Intentional Torts

the wrongful act knowingly committed

  • may be criminal

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The Tortfeasor

must intend to commit the act in questions leading to damage

  • the one committing the act

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means that the person intended the consequence of their actions or knew with substantial certainty that specific consequences would result from the actions

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Transferred intent

when an individual intents to hurt one person but unintentionally hurts someone else

  • throwing a punch at person A but missing and striking person B

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Categories of Intentional Torts

  • Assault

  • Battery

  • False Imprisonment

  • Intentional Infliction of Emotional Distress

  • Defamation

  • Invasion of Privacy

  • Fraudulent Misrepresentations

  • Abusive or Frivolous Litigation

  • Business Torts

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is any intentional and unexcused threat of immediate harm or contact

  • no physical contact is needed just reasonable apprehension of imminent harm

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is unexcused and harmful or offensive physical contact intentionally performed

  • physical injury not needed

  • Offensive- judged by reasonable person standard- just of fact

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False Imprisonment

the intentional confinement or restraint of another’s person’s activity without justification

  • could involve physical barriers, physical restraint, or threats of physical violence

    • Common Issue- shoplifter- use reasonable force and probable cause

    • Consent negatives all liability

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Intentional Infliction of Emotional Distress

acts that are so extreme and outrageous resulting in emotional distress

  • May be protected by free speech

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Involves the wrongful hurting of one’s character or reputation

  • The law imposes a general duty on all people to refrain from knowing making FALSE, DEFLAMATORY statements of fact about others

    • Libel- when done in written format

    • Slander- when done orally

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Items needed to establish Defamation

  1. the defendant made false statement of fact

  2. about the plaintiff with the intent to cause harm

  3. the statement was made to at least one other person

  4. If the plaintiff is a public figure actual malice

Also needs

  • statement of fact

  • publication requirement

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Statement of fact

general legal issue is the statement fact or opinion

  • Opinions generally protected under the 1st amendment

    • Mike is a cheater, liar, and criminal

    • I think Mike is a jackass

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Publication Requirement

the statements need to be communicated to another person

  • 3rd party merely by chance overhears the statement- probably not actionable (no publication)

  • Restating a publication can be actionable against both individuals

    • Watch for retweets and forwarding emails

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Damages for Defamation

  • Libel (written)

  • Slander (spoken)

  • Slander per se

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Libel (written)

if established general damages are presumed as a matter of law

  • Individuals can be compensated for nonspecific harms

    • disgrace or dishonor, humiliation, emotional distress

  • Need Not show harmed in a specific way

    • do not have quantify the harm suffered

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Slander (spoken)

the plaintiff must establish special damages to recover

  • must show actual economic harm or money loss

  • Rational- loss is temporary and generally not as deliberate

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Slander Per Se

if established does not require the plaintiff to establish special damages to recover

  • Four types or circumstances that give rise to Slander Per Se

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Four types or circumstances that give rise to Slander Per Se

  1. a person has a loathsome disease

    1. sexually transmitted disease

  2. a person has committed improprieties while engaged in a profession or trade

  3. a person has committed or has been imprisoned for a serious crime

  4. a person is promiscuous (gets around)

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Defenses for Defamation

  • Privileged Communications

  • Public Figures

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Privileged Communications

  • Absolute privileged- court proceeding or legislative hearings or debates

  • Qualified or conditional- good faith and publication is limited to those who have a legitimate interest in the communication

    • an employment evaluation, employment reference

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Public Figures

Politicians, entertainers, athletes are regarded as “far game”

  • the plaintiff must show actual malice- a statement with either knowledge of it falsity or a reckless disregard for the truth

    • Rational- matter of public interest and means to correct absurdities

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Invasion of Privacy

a person has a right to solitude and freedom from prying public eyes

  • the court had held there is implied right of privacy in the Constitution

  • to recover a person must establish a reasonable expectation of privacy and the invasion must be highly offensive

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Four acts as Invasion of Privacy

  1. Intrusion into an individual’s affairs or seclusions

    1. breaking and entering an individuals home, accessing one’s laptop, wiretaps or eavesdropping, peeping tom

  2. False light- publication of information that places an individual that places an individual in false light

    1. attributing racial statements to an individual

  3. Public disclosure of private facts that a private person would find objectionable or embarrassing

    1. publication of medical or financial information- doesn’t matter if true

  4. Appropriation of Identify- using a person’s name, image, or likeness for commercial purposes without permission

    1. hiring a look like for advertising purposes

    2. most states have codified the common law- but differ for which it may be used

      1. videos or video games

      2. naked singing cowboy

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Fraudulent Misrepresentations

involves intentional deceit for personal gain

  • need a few things to recover

  • for fraud to occur- need more than Puffery- seller’s talk- requires knowledge of truth

  • Statement of Fact vs. Opinion

    • opinions are not actionable

  • Negligent misrepresentation- no knowledge of falsity

    • but defendant had a duty of care to supply correct information

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Five things needed to recover fraudulent misrepresentations

  • misrepresentation of a false material fact/condition or reckless disregard for the truth

  • an intent to induce another party to rely on the misrepresentation

  • a justifiable reliance on the misrepresentation by the deceived party

  • damage suffered by the reliance

  • connection between the misrepresentation and injury suffered

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Abusive or Frivolous Litigation

recognizes that people have the right not to be sued without legally just and proper reasons

  • Protects the right of

    • Malicious prosecution

    • Abuse of Process

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Malicious Prosecution

if party sues with malicious and without legitimate legal reason and loses, they can then be sued

  • constantly bring frivolous claims

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Abuse of Process

using the legal process against someone outside of the intended purpose as a form of punishment or harassment

  • does not require prior litigation or proving malice

    • consistent an unreasonable subpoenas or depositions

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Business Torts

Involved wrongful interference with another’s business rights

  • public policy favors free competition

  • fall within 2 categories

    • wrongful interference with a contractual right

    • wrongful interference with a business relationship

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Interference with a Contractual Right

  • valid contract between the two parties

  • 3rd party must know of the contract

  • 3rd party must intentionally induce a party of breach the contract

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Interference with a business relations

unreasonably interfering with another’s business to gain a great market share

  • competitive vs. predatory behavior

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International Torts Includes

  • trespass to real property- land or home

  • trespass to personal property- money, securities, cars

  • Conversion- use without authority

  • disparagement of property

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Trespass to land Occurs when without permission any one of the following occurs

  • Entry upon the land by another

    • onto, above, or below the surface

  • Causes anything to enter onto the land by another

  • remains on land owned by another or permits anything to remain on the land

  • actual harm to the land is not essential- owners exclusive property

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Establishing a Trespass

the owner or legal occupant of the land must establish the person as a trespasser

  • positing signs or asking an individual to leave

  • it can by implied- illegal act

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Liability for harm

under common law liable for harm caused to the land and the trespasser could not sue the owner if injured

  • Today- owners has a reasonable duty of care and attractive nuisance doctrine to consider

  • owners can use reasonable force to remove trespassers

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Defenses to Trespass

  • warranted or necessary- exigent circumstances

    • entering a building to help someone in danger

  • Licensee- invited on the land or ticket holders

    • are revocable

    • someone reading an electric meter

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Trespass to personal property (Also known as Trespass to Chattel/personality)

unlawful taking or harming of another’s personal property; interference with another’s right to the exclusive possession of his or her personal property

  • harm can mean destruction or reduction in value, condition, or quality

  • also includes barring an owner access to the property

  • Exceptions mechanic liens, failure to retrieve

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any act that deprives an owner of personal property without the owners permission

  • If conversion occurs very often a trespass has occurred

    • original taking is trespass and failure to return is conversion

  • Conversion is the civil side of theft crimes

    • theft not necessary

    • borrowing and not returning

    • intention is not a defense

      • receiving stolen goods

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Disparagement of Property

occurs when economically injurious falsehoods are made about another’s property

  • Two theories

    • Slander of Quality (trade libel)

    • Slander of title

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Slander of Quality (Trade libel)

publication of false information about another’s product or alleging it cannot perform as the owner claims

  • the plaintiff must show that the improper publication caused a 3rd part to refrain from dealing with the plaintiff

    • must show economic harm

  • may also trigger a defamation of character claim

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Slander of title

when a publication falsely denies or casts doubt on the other’s legal ownership of the property

  • someone publishes an untrue story about the ownership of another’s property with the intent to persuade others from dealing with the plaintiff

    • auto parts business- inventory is all stolen

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occurs when someone is injured because of another’s failure to live up to a duty of care

  • does not require intent

    • a person behavior creates the risk of injury

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To succeed in a negligence action, the plaintiff must prove each of the following

  1. Duty. The defendant owed a duty of care to the plaintiff.

  2. Breach. The defendant breached that duty.

  3. Causation. The defendant’s breach caused the plaintiff’s injury.

  4. Damages. The plaintiff suffered a legally recognizable injury.

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Duty of Care

The duty of all persons, as established by tort law, to exercise a reasonable amount of care in their dealings with others. Failure to exercise due care, which is normally determined by the “reasonable person standard,” constitutes the tort of negligence

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In determining whether the duty of care has been breached, courts consider several factors

  1. The nature of the act (whether it is outrageous or commonplace).

  2. The manner in which the act was performed (cautiously versus heedlessly).

  3. The nature of the injury (whether it is serious or slight).

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Reasonable person standard

The standard of behavior expected of a hypothetical “reasonable person.” The standard against which negligence is measured and that must be observed to avoid liability for negligence

  • how would a reasonable prudent person act?

  • degree of care can vary based upon occupation or relationship to the plaintiff

  • decided on a case by case basis

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Duty of landowners

landowners are expected to exercise reasonable care to protect individuals coming onto their land

  • may extend to trespassers

  • landowners who rent must keep renters safe

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Duty to warn

business owners have a duty to exercise reasonable care to protect customers or business invitees

  • the business owner has a duty to discover and remove hidden damages that might injury a customer

    • wet caution signs

  • obvious risk provides an exception

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Duty of Professionals

people who possess a superior knowledge, skill, or training are held to a higher standard of care

  • lawyers are held to a reasonable lawyer standard

    • if breached is considered malpractice

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If a person breaches a duty of care and someone suffers injury, the person’s act must have caused the harm for it to constitute the tort of negligence

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Two questions asked to determine Causation

  1. Is there causation of fact?

  2. Was the act the proximate, or legal, cause of the injury?

Both question must be answered to recover

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Causation of fact

An act or omission without (“but for”) which an event would not have occurred

  • cause and effect- did the bad act cause the injury or would it have happened any way

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Proximate cause (legal cause)

exists when the connection between an act and an injury is strong enough to justify imposing liability

  • was the injury foreseeable or remotely connected to the incident to trigger liability

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Injury requirement

for the plaintiff to recover they must have suffered a legally recognizable injury

  • some loss, harm, wrong, or invasion to recover

    • carelessly bumping into someone

    • punitive damages- only recoverable

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Good Samaritan laws

protect individuals from liability who aid voluntarily

  • these laws are passed to protect medical professional who volunteer in emergency situations

    • medical emergency on a plane

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Dram Shop Acts

bar owners and bartender liable when intoxicated individuals cause injuries

  • social hosts statutes- people hosting parties may be liable for injuries caused by quests

    • overly intoxicated individuals

    • strict liability- if underage drinking

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Two theories of defenses to Neglience

  1. failed to establish a cause of action- did not meet one of the 4 elements

  2. affirmative defenses

    1. Assumption of the risk

    2. superseding cause

    3. contributory negligence

    4. comparative negligence

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Assumption of risk

A defense against negligence that can be used when the plaintiff was aware of a danger and voluntarily assumed the risk of injury from that danger

  • 2 elements required

    • knowledge of the risk

    • voluntary assumption of the risk

      • skiing and skydiving, attending a baseball game

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Superseding cause

An intervening force or event that breaks the connection between a wrongful act and an injury to another; in negligence law, a defense to liability

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Contributory negligence

A theory in tort law under which a complaining party’s own negligence contributed to or caused his or her injuries. Contributory negligence is an absolute bar to recovery in a minority of jurisdictions

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Comparative negliegence

A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party) on the basis of each person’s proportionate negligence

  • pure form- allows the plaintiff to recover, even if the extent of his or her fault was greater than that of the defendant

    • if the plaintiff was 80 percent at fault and the defendant 20 percent at fault, the plaintiff can recover 20 percent of his or her damages

  • Most states use a 50-50 rule

    • that prevents the plaintiff from recovering any damages if she or he was more than 50 percent at fault

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Strict Liability

liability without fault

  • cases with abnormally dangerous activities, animals, or defective products

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Product Liability

legal liability of manufacturers, sellers, and lessors of goods to consumers for injuries or damages caused by the goods

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Abnormally Dangerous Activity

the doctrine applies to situations because of the extreme risk of the activity

  • include blasting or storing explosives

    • even if extreme care is taken then is risk of injury

      • Demoing a building

  • Owning Animals may qualify

    • wild animals- Tiger or Lions

    • Some Domestic animals may qualify

      • danger or propensity to bite or attack

      • certain dog breeds may qualify

        • like pit bulls

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The application of Strict liability to product liability depends on two things:

  1. The manufacturer can better bear the cost of injury because it can spread the cost throughout society by increasing the prices of its goods.

  2. The manufacturer is making a profit from its activities and therefore should bear the cost of injury as an operating expense.

rational is society is ensuring that manufacturer are not cutting corners and protecting innocent member of society

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Product liability is based on Tort theories of:

  1. Negligence

  2. misrepresentation

  3. strict liability

  4. break of warranty

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failure to exercise a reasonable degree of care

  • If a manufacturer fails to exercise “due care” to make a product safe, a person who is injured by the product may sue the manufacturer for negligence

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Manufacturers must use due care in all of the following areas

  1. Designing the product.

  2. Selecting the materials.

  3. Using the appropriate production process.

  4. Assembling and testing the product.

  5. Placing adequate warnings on the label to inform the user of dangers of which an ordinary person might not be aware.

  6. Inspecting and testing any purchased components used in the product.

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Privity of Contract

The relationship that exists between the promisor and the promisee of a contract

  • is not required for product liability based on negligence

  • manufacturers or seller is liable for failure to exercise due care to anyone who sustains an injury caused by the negligent product

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Cause in Fact

requires the showing that “but for” the defendant’s action would not have occurred

  • must be shown in any negligence case

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Proximate Cause

focuses on the foreseeability of the consequences of the act

  • defective automobile cause an accident between vehicle A &B. Vehicle B crashes into a gas station’s gas pump causes an explosion damaging person C’s nearby home

    • is the car manufacturer responsible for the damage to C’s home? But for? Proximate cause?

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Based on misrepresentation

when a defendant is injured as a result of a manufacturer’s or seller’s fraudulent misrepresentation is Tort of Fraud- made knowingly or with reckless regard for the facts

  • mislabeling of packages

  • intentional concealment of a product’s defect

  • The misrepresentation must be

    • a material fact

    • the seller must intend to induce the reliance on the misrepresentation

      • label or advertisement is enough to show an intent to induce

      • the plaintiff must show reliance on misrepresentation

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Strict Product Liability as a matter of public policy

  1. Consumers should be protected against unsafe products.

  2. Manufacturers and distributors should not escape liability for faulty products simply because they are not in privity of contract with the ultimate user of those products.

  3. Manufacturers and distributors can better bear the costs associated with injuries caused by their products, because they can ultimately pass the costs on to all consumers in the form of higher prices.

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Six requirements of Strict Product Liability

  1. The product must be in a defective condition when the defendant sells it.

  2. The defendant must normally be engaged in the business of selling (or otherwise distributing) that product.

  3. The product must be unreasonably dangerous to the user or consumer because of its defective condition (in most states).

  4. The plaintiff must incur physical harm to self or property by use or consumption of the product.

  5. The defective condition must be the proximate cause of the injury or damage.

  6. The goods must not have been substantially changed from the time the product was sold to the time the injury was sustained.

plaintiff must not show how or why the product was defective, just that it was defective when sold and the defect made it unreasonable dangerous to user

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Unreasonably Dangerous Products

it is understood that certain products cannot be made entirely safe for all users

  • hence only liable for unreasonably dangerous products

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Test for Unreasonably Dangerous Products

  1. The product was dangerous beyond the expectation of the ordinary consumer.

    1. did they have reasonable knowledge of the danger of the product

  2. A less dangerous alternative was economically feasible for the manufacturer, but the manufacturer failed to produce it.

    1. could safety features have been added

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Three types of product defects

  1. Manufacturing

  2. design

  3. inadequate warning

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Manufacturing Defect

when the product departs from its intended design even though all possible care was exercised in the preparation and marketing

  • departure from a products units design specifications that results in a product that flawed, damaged, or incorrectly assembled

  • defects occur when a manufacturer fails to assemble, test, or check a product

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Quality Control

is essential but not defense to liability

  • rational behind strict liability in manufacturing is to encourage greater investment in product safety and stringent quality control

  • cannot be used as a defense

  • if you say 90% of products are checked you are still responsible for the other 10%

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Design Defects

the product is made in conformity with specifications, but the product or design is defective

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For Design Defect action a plaintiff must show

  1. A reasonable alternative design was available.

  2. As a result of the defendant’s failure to adopt the alternative design, the product was not reasonably safe.

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Factors Considered in Design Defects

a court could consider a wide range of factors in deciding design cases

  • magnitude and probability of risk, advantages and disadvantages of product before and after adjustment to the design

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Risk-Utility Analysis

court examines the risk of harm from the product as designed outweighs its utility to the user or public

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