INTERNATIONAL LEGAL ENVIRONMENT

MBA 1ST YEAR ONLINE

FACULTY : MR CHANDRU KANAYA

CHAPTER 5 : TORTS AND CYBER TORTS

STUDY NOTES

Torts are wrongful actions ( tort is the French word for “wrong”) . Tort law is the nation’s attempt to
right a wrong. Through tort laws the society tries to ensure that those who have suffered injuries as a
result of wrong conduct of others receive compensation from the wrong doers. Some torts such as
assault and trespass originated from English common law as the field continues to expand.

Business torts involve wrongful interference with business rights of others. Unfair competition, wrongful
interference with business relations of others are some examples .

Cyber torts are torts committed via internet.

Notion of Torts is based on the following:

 Wrongs
 Compensation

Tort law is designed to compensate those who have suffered a loss or injury due to another person’s
wrongful act.

Purpose of tort law is to provide remedies for invasion of various protected interests. Society recognizes
interest in personal physical safety and tort law provides remedy for acts that cause physical injury or
interfere with the physical security and freedom of movement. Society recognizes need to protect real
and personal property and certain intangible interests like personal privacy, family relations, reputation
and dignity and tort laws provide for remedies against invasion of these protected interests.

Damages available in Tort Actions

Compensatory damages are intended to compensate or reimburse a plaintiff for actual loss . These
damages are broken into special and general damages. Special damages compensate the plaintiff for
quantifiable monetary losses such as medical expenses, lost wages , loss of irreplaceable items and cost
of replacing or repairing damaged property, General damages compensate individuals (not companies)
for non monetary aspects of harm suffered such as pain and suffering. Court might award general
damages for physical or emotional pain and suffering, loss of companionship, loss of consortium I,e,
losing emotional and physical benefits of a spousal relationship, disfigurement, loss of reputation or loss
or impairment of mental or physical capacity.
Punitive damages are awarded in tort cases to punish the wrongdoer and deter others from similar
wrongdoing. Punitive damages are appropriate only when defendant’s conduct was bad and
unacceptable. Punitive damages are available mainly in intentional tort actions and only rarely in
negligence lawsuits. Suits involving gross negligence which define as intentional failure to perform a
manifest duty in reckless disregard of consequences of such failure for life or property of others.

Tort reform goals

Critics wish to reduce both the number of tort cases brought each year and amount of damages
awarded. They advocate :

 Limiting amount of both punitive and general damages that can be awarded
 Capping the amount that attorneys collect as fees based on percentage of damages awarded
 Requiring losing party to pay both plaintiff’s and defendant’s expenses to discourage filing
meritless suits.

False imprisonment is an intentional confinement of another person’s activities without justification.

False imprisonment interferes with freedom to move without restraint. Confinement is accomplished
through use of physical barriers, physical restraints or threats of physical force. Moral pressure or
threats of future harm do not constitute false imprisonment. Example : Detaining a suspected
shoplifter.

Intentional infliction of emotional distress

This tort is defined as an intentional act involving extreme and outrageous conduct that results in severe
emotional distress to another. To be actionable the act must be so extreme and outrageous that it
exceeds the bounds of decency accepted by society.

Defamation

Defamation of character involves wrongfully hurting a person’s good reputation. Law has imposed a
general duty on all persons to refrain from making false and defamatory statement s of facts about
others. Breaking this duty in writing or other permanent form ( digital recording) involves tort of libel .
Breaching this duty orally involves tort of slander.

Damages for libel and slander

Once a defendant’s liability for libel is established, general damages are presumed as a matter of law.
General damages are designed to compensate the plaintiff for non specific harms such as disgrace or
dishonor in the eyes of community, humiliation, injured reputation and emotional distress. These harms
are hard to measure and to recover damages in libel cases the plaintiff need not prove that he or she
was actually injured in any way as a result of libelous statement.

In a case alleging slander, the plaintiff must prove special damages to establish defendant’s liability . The
plaintiff must show that the slanderous statement caused the plaintiff to suffer actual economic or
monetary losses. Unless this initial hurdle of proving special damages is overcome, a plaintiff alleging
slander cannot go forward with the lawsuit and recover any damages.

4 types of slanders are considered to be slander per se , which are exceptions to the burden of proving
special damages :

 A statement that the other has a particular type of disease ( leprosy or sexually transmitted
disease, mental illness)
 A statement that the other has committed improprieties while engaging in a profession,
business or trade
 A statement that the other has committed or been imprisoned for a serious crime
 A statement that a person ( usually only unmarried persons or sometimes a woman) is unchaste
and has engaged in a serious sexual misconduct.

Defenses against defamation

Truth is normally an absolute defense against a defamation charge. If you can prove the defamation
charge to be true .

In some cases, a person will not be liable for making defamatory statements because he or she enjoys a
privilege or immunity. Privileged communications are of two types : Absolute and Qualified.

Statements made in courtrooms by attorneys and judges during a trial are absolute privileges granted.

A qualified privilege implies an employer’s evaluation of employees in writing as an example of a

qualified privilege, are statements made in good faith and published for those who have a legitimate
interest in that information or communication , such statements fall within the purview of qualified
privilege,

Actual malice statement is said to be made with either the knowledge of falsity or reckless disregard of
the truth. Statements made about public figures via a public medium are matters of general interest.
Public figures have a greater burden of proof in defamation cases.

Invasion of the right to privacy :

A person has a right to solitude and freedom from prying public eyes . Supreme Court has held that a
fundamental right to privacy is implied by various amendments to the US Constitution. Tort law also
safeguards these rights through the tort of invasion of privacy. To sue successfully for invasion, a person
must have a reasonable expectation of privacy and invasion must be highly offensive

4 acts qualify as invasion of privacy :

- Appropriation of identity – using a person’s name without permission
- Intrusion into an individual’s affairs or seclusion
- False light - publishing information that places person in false light
- Public disclosure of private facts – News reports about a public figure’s life is considered as
legitimate public concern . However same act for a private individual might not be a legitimate
public concern.
Fraudulent misrepresentation

A misrepresentation causes another to believe in a condition that is different from the condition that
actually exists. This is accomplished through a false or incorrect statement. The tort of fraudulent
misrepresentation involves intentional deceit for personal gains . The tort includes :

- Misrepresentation of facts with the knowledge that they are false with reckless disregard to the
truth
- An intent to induce another to rely upon such misrepresentation
- Justifiable reliance by deceived party
- Injuries suffered as a result of such reliance
- Causal connection between misrepresentation and injury suffered .

Concept of Puffery is defined as a sales person’s exaggerated claims concerning the quality of property
offered for sale . such claims involve opinions rather than facts and are not considered to be legally
binding promises or warranties. All talks are subjective by nature.

A tort of misrepresentation or fraud occurs only when there is a reliance on a statement of fact.
Sometimes reliance on a statement of opinion may involve tort of misrepresentation if individual making
the statement of opinion has superior knowledge of the subject matter.

Abusive or frivolous litigation

Persons or businesses have a right to sue when they have been injured. Defending oneself in legal
proceedings can be costly, time consuming and emotionally draining. Tort law recognizes that people
have a right not to be sued without a legally just and proper reason and therefore it protects individuals
from misuse of litigation.

If a party initiates a lawsuit out of malice and without a probable cause and ends up losing the suit, that
party can be sued for malicious prosecution. Abuse of process can apply to any person using a legal
process against the other in an improper manner or to accomplish a purpose for which it was not
designed.

Abuse of process does not require plaintiff to prove malice or show that the defendant lost in a prior
legal proceeding. An abuse of process claim is not limited to prior litigation.
Wrongful interference :

- Wrongful interference with a contractual relationship

Three elements are necessary for wrongful interference with a contractual relationship to occur
a) A valid, enforceable contract must exist between two parties
b) A third party must know that this contract exists
c) The third party must intentionally induce a party to breach the contract

- Wrongful interference with a business relationship

Business persons devise countless schemes to attract customers. They are however prohibited
from interfering with another’s business in their attempt to gain a share of their market.

A person can avoid liability for a tort of wrongful interference with a contractual or business
relationship by showing that the interference was justified or permissible. Bona fide competitive
behavior is a permissible interference even if it results in breaking of a contract. The logic that
holds this argument is that public policy favors free competition through advertising which
outweighs any instability that such competitive activity may have caused in the contractual
relationship. Although luring away customers from competitor through rigorous advertising and
aggressive marketing strategies interferes with competitors relationship with its customers,
courts allow such acts in the spirit of competition.

Intentional torts against property include trespass to land, personal property conversion and
disparagement of property. These torts are wrongful actions that interfere with an individual’s
legally recognized rights with regard to their land or personal property.

NEGLIGENCE – UNINTENTIONAL TORTS

A tort of negligence occurs when someone suffers injury because of another’s failure to live up
to a required duty of care. In contrast to intentional torts, in torts involving negligence, the tort
doer neither wishes to bring about the consequences of the act nor believes that they will occur.
The conduct creates the risk of the consequence. If no risk is created there is no negligence.
Risk must be foreseeable – anticipated and guarded against.
To succeed in a negligence action, the plaintiff must prove each of the following
- Duty – defendant owed a duty of care to the plaintiff
- Breach – defendant breached that duty
- Causation – defendant’s breach caused plaintiff to suffer injury
- Damages – injury suffered by plaintiff is legally recognizable

A careless or dangerous act ( carelessly or carefully performed) could result in an injury. Courts consider
the nature of the act, manner in which the act was performed and the nature of injury
A reasonable person standard is a question to be asked by a court about how a person would have
acted in the same circumstances if his duty of care was breached . It is usually a society’s judgment on
how a person should act .

In deciding whether there is causation , court must address 2 questions :

- Is there causation in fact ? did injury occur because of defendant’s act or would it have occurred
anyway. If injury would not have occurred without defendant’s act , then there is causation in
fact. The court uses the words “but for” as “ but for “ the wrongful act , the injury would not
have occurred
- Was the act the proximate cause of injury ? A proximate cause exists when the connection
between an act and an injury is strong enough to justify imposing a liability. For example if you
leave a camp fire burning , the fire not only burns down the forest but can also set off an
explosion in a nearby chemical factory plant that spills chemicals into a nearby river , ruining the
lives of fishes downstream as well as the economy of a tourist resort for ruining the vacation of
tourists. These are questions of proximate cause that court must decide.

Affirmative Defense to negligence :

- Assumption of risk – knowledge of the risk , voluntary assumption of risk eg skiing and skydiving
- Superseding cause
- Contributory and comparative negligence

Doctrines and statutes relating to negligence :

RES ISPA LOQUITUR (facts speak for themselves )

In lawsuits involving negligence , the plaintiff has the burden of proving that the defendant was
negligent. Where facts speak for themselves, the defendant has to carry the burden of proof whether he
was negligent or not.

Negligence per se ( in or of itself)

This may occur if an individual violates a statute or ordinance and thereby causes a harm which the
statute was intended to prevent.
Danger invites rescue doctrine

Sometimes a person who is trying to avoid harm ends up causing harm to another . for example if an
individual tries to avoid a head on collision with a drunk driver ends up causing harm to a cyclist , the
drunk driver is liable to anyone who is injured even if injury resulted from other person’s attempt to
escape harm.