Business Law Day 3
Historical Foundations of Law and Equity
Divisions of the Law: Historically, the legal system was divided into two distinct types of courts: Courts of Equity and Courts of Law.
Courts of Equity: These courts had the specific authority to order individuals to perform certain actions or refrain from them.
Courts of Law: These courts primarily provided compensation, usually in the form of monetary damages.
The Prevalence of Monetary Compensation: In the modern legal universe, approximately of cases are resolved through cash compensation. There are several structural reasons for this:
Finality: Courts prefer to resolve an issue completely once it has been litigated. A cash payment of, for example, is a definitive end to the matter.
Monitoring Burden: Courts dislike injunctions because they require ongoing supervision. An order not to do something "never ends" and lacks the finality judges prefer.
Equitable Remedies: Non-cash damages, known as equitable remedies (or "doing equity"), are only awarded when cash compensation is insufficient to resolve the issue.
Types of Legal and Equitable Remedies
Compensatory vs. Punitive Damages:
Compensatory Damages: These are designed to compensate the person who suffered a loss. This is the primary goal of civil law.
Punitive Damages: These are intended to punish the wrongdoer. This is the primary goal of criminal law.
Exception in Civil Law: While punitive damages exist in a narrow range of civil scenarios, they are a major exception, not the rule. They are frequently reported in news media, creating a false impression of their frequency, whereas the tens of thousands of cases without punitive damages go unreported.
Reformation: This occurs when a court modifies a contract. If parties enter a contract in good faith but include an illegal or undoable provision (such as a task requiring a permit they cannot get), the court may "reform" the document to eliminate the illegality while preserving the parties' original intent.
Rescission: This involves the court acting as though the contract never existed. This is considered rare because courts generally respect the fact that parties agreed to terms.
Specific Performance: This is an order requiring a party to fulfill their contractual obligations rather than just paying damages. It is most traditional in real estate.
Uniqueness of Land: Historically, the law treats every piece of property as unique, even if houses on a "bungalow row" look identical. Because the property is unique, a judge may order a seller to go through with a sale if they try to change their mind.
Accounting: A specific business-related equitable remedy often mentioned in property and contract contexts.
Injunctions: Classifications and Procedural Timing
Definition: An injunction is a court-issued order to do or refrain from doing something.
Permanent Injunction:
Timing: Issued only after the case is entirely finished.
Requirement: A final determination on the winner has been made.
Example: In cases of racial discrimination in school districts, cash is insufficient; therefore, the court issues a permanent order prohibiting the discriminatory behavior going forward.
Preliminary Injunction:
Purpose: To maintain the status quo during the pendency of litigation.
Timing: Usually occurs after a significant amount of discovery (exchange of information and investigation) has taken place. It is described as a "mini-trial."
Criteria for Issuance:
Likelihood of Success: The court must believe the party asking for it has a chance of winning the final case.
Irreparable Harm: The party must show they will suffer clear, significant harm (not just irritation) if the injunction is not granted.
Balancing the Equities: The court weighs the benefit to the applicant/public against the restriction placed on the other party (e.g., public safety, neighborhood benefit).
Public Interest: The order should generally align with the public good.
Temporary Restraining Order (TRO):
Duration: Extremely short-term, lasting from a few days to approximately two weeks.
The Ex Parte Nature: A TRO can be issued ex parte, meaning the party targeted by the order might not even be aware of the hearing or given notice to appear.
Constitutional Concern: Because it bypasses the standard notice requirement, it is considered a "dicey" breach of due process, which is why it is strictly limited in duration to allow the other party time to marshal a defense.
Procedural Law: Trial Order and Summary Judgment
Chronology of Activities: In a trial setting, a TRO happens first, followed by a preliminary injunction (after discovery), and finally a permanent injunction as part of the final remedy.
Summary Judgment: This is a motion made when parties agree on the facts but disagree on the law.
Logic: If there is no "material issue of fact," there is no need for a full trial/jury to determine the truth. The judge simply applies the law to the agreed facts.
Judicial Hesitance: Judges generally dislike granting summary judgments because there is almost always a minor disagreement regarding the facts.
Trial Roles:
Trier of Law: Always the judge. The judge determines the rules and instructs the jury.
Trier of Fact: Usually the jury. They decide what actually happened. If a jury is waived, the judge becomes both the trier of law and fact.
Foundation and Evolution of Tort Law
Historical Origins: Tort law has a multiple hundred-year history, moving from English common law to American law. It is largely based on judicial decisions (precedent) rather than written statutes, though many jurisdictions have since codified these rules.
Shift in Purpose: Historically, the same courts handled both criminal and civil penalties for torts. Today, they are separate. Civil tort actions focus solely on compensation for the party who lost something.
Cause of Action: A "legal box" a plaintiff must fit into to make a claim. It is composed of specific elements.
Facts vs. Elements: Only facts that prove or disprove an element of a cause of action are relevant.
Example (Negligence): Elements include the existence of a duty, a breach of that duty, causation, and damages. Failure to allege facts for even one element leads to the case being dismissed.
Intentional Torts
The Focus of Intentional Torts: The primary focus is the intent behind the action.
Categories of Intentional Torts:
Assault: Creating an apprehension of harmful or offensive contact (e.g., swinging an axe to scare someone).
Battery: The actual harmful or offensive contact.
False Imprisonment: Unlawful restraint of a person's freedom of movement.
Intentional/Reckless Infliction of Emotional Distress: Conduct so extreme it causes severe mental suffering (distinct from negligent infliction).
Trespass to Land: Physical entry onto land or causing objects/substances to enter land (e.g., toxic dumping, tree branches crossing property lines, low-flying planes).
Trespass to Chattels: Damaging or interfering with personal property (non-land items/animals).
Conversion: A unique trespass to chattels where the property is stolen or damaged so severely it loses all value. The court requires the defendant to pay the full value as if they bought it.
Transferred Intent: If a defendant intends to commit one intentional tort but ends up committing another, the intent "transfers."
Example: If you swing an axe to scare someone (Assault) but the head flies off and hits them (Battery), you are liable for both because the intent for the assault supports the battery.
Negligence and Strict Liability
Negligence: Responsibility arises from a breach of duty through blameworthy conduct. It is judged by the "Reasonable Person Standard": what a mythical, reasonable person would have done in those specific circumstances.
Strict Liability: Liability is imposed regardless of intent or the amount of care taken. It is applied to "highly dangerous activities."
Wild Animals: Historically, keeping a wild animal (like a wolf or a highly trained attack dog) carries absolute liability. If a trained Irish Wolfhound maims a child trespassing on the property, the owner is liable because keepings such an animal is an inherent risk.
Social Policy: Strict liability often reflects social policy decisions made by judges or legislatures to protect the public (e.g., eight-year-olds should not be mauled for walking six inches onto a property).
Vicarious Liability: The concept that a principal (employer) is liable for the torts of their agent (employee) committed within the scope of employment.
Scope of Authority: Even if an employee (like a pizza delivery driver) acts stupidly or uses excessive force to collect money, the employer may be liable if the employee plausibly thought they were fulfilling a job function (collecting payment).
Advanced Tort Concepts
Eggshell Skull Rule (Thin Skull Rule): A defendant must "take the plaintiff as they find them."
Application: If you lightly tap someone who happens to have brittle bone disease and their skull shatters, you are liable for the full extent of the injury, regardless of whether you knew about the condition.
Causation:
But-For Test: The injury would not have happened "but for" the defendant's action.
Proximate Cause (Legal Cause): Limits liability to foreseeable consequences.
The Butterfly Example: If releasing butterflies in Florida is proven via supercomputer to have caused a typhoon in Hong Kong, the person is not legally liable because the event was too unforeseeable and remote from the act.
Defenses:
Consent: Participation in contact sports (basketball, football) implies consent to certain types of contact. However, consent ends when the game ends (e.g., a halftime tackle is a battery).
Self-Defense and Defense of Others: Legitimate responses to threats.
Defense of Property: Less permissive than self-defense.
The Crossbow Cases: Using deadly mechanical traps (like a rigged crossbow inside a cabin) to defend property is generally illegal because life is valued higher than property.
Questions & Discussion
Question: Where is the best place to detain a shoplifter to prove intent?
Response: Beyond the checkout counter or outside the store. While hiding an item (removes or hides) is an element, the "intent of taking it without paying" is hardest to prove. By waiting until they pass the point of payment/the exit, the objective action clearly supports the internal intent.
Question: What is the "red box" on the shoplifting map?
Response: It is just a red box. In legal analysis, you must decide what evidence is actually relevant to the elements of the crime.
Question: Where does a duty come from in negligence?
Response: Duty arises from the law (e.g., Rules of the Road state your duty while driving) or from relationships (e.g., a doctor has a duty to their specific patient, but a bypasser cardiologist generally has no legal duty to a stranger having a heart attack on the street).
Question: Is there a difference between purpose and knowing intent?
Response: Yes. Purposeful intent is wanting the specific outcome; knowing intent is being practically certain the result will happen, even if the specific outcome wasn't the primary goal.
Question: Does summary judgment happen often?
Response: It depends on the case, but generally, factual disagreements prevent it from being the primary way cases are resolved.
Question: Why does it cost so much to litigate a "dinky" case?
Response: Every case, regardless of size, requires a massive amount of work hours to establish the cause of action, research elements, and manage the intense detail-oriented nature of trial preparation. It can cost to to recover only .