The traditional path to a college degree isn't for everyone. Many individuals find themselves seeking education and personal development opportunities outside the confines of a formal degree program. Non-degree college courses have become increasingly popular for those who want to acquire new skills, explore their interests, and enhance their professional prospects without committing to a full degree. In this article, we will explore the world of non-degree college courses, shedding light on their benefits, types, and how to make the most of them. What Are Non-Degree College Courses? Non-degree college courses, often referred to as continuing education or adult education, encompass a wide array of learning opportunities offered by colleges and universities. These courses do not lead to a degree but instead provide a more flexible, accessible, and targeted approach to learning. Non-degree courses are designed for individuals of all backgrounds and ages who wish to gain specific know
Tort Law:
Torts:
Torts are a category of civil wrongs that involve harm or injury to a person's property, reputation, or physical well-being. Torts are typically divided into three main categories: intentional torts, negligence, and strict liability.
Intentional Torts:
Intentional torts occur when an individual deliberately commits an act that results in harm or injury to another person. Common examples include assault, battery, defamation, false imprisonment, and intentional infliction of emotional distress. To defend against an accusation of an intentional tort, one can typically argue that there was no intent to cause harm, consent was given, or the accused was acting in self-defense or defense of others.
Negligence:
Negligence is the failure to exercise reasonable care in a situation, leading to harm or injury to another person. To establish negligence, one must prove the presence of a duty of care, a breach of that duty, causation, and actual damages. Negligence affects virtually all human activities as individuals, businesses, and professionals have a duty to exercise reasonable care to prevent foreseeable harm. Defenses against negligence claims can include demonstrating that the duty of care was not breached, there was no causation, or the plaintiff was contributorily negligent.
Strict Liability:
Strict liability is a legal doctrine applied in cases involving certain inherently dangerous activities or products. In strict liability cases, the defendant can be held liable for harm or injury even if they were not negligent or did not intend to cause harm. Strict liability significantly affects businesses engaged in making and selling products, as they can be held responsible for defects or dangers associated with their products, irrespective of their degree of care.
Arguments for and Against Tort Reform:
a. Arguments for Tort Reform:
Cost Reduction: Supporters argue that tort reform can lower the cost of insurance and healthcare by limiting excessive damage awards, which, they claim, lead to higher medical expenses and insurance premiums.
Economic Impact: Proponents contend that tort reform can have a positive impact on economic growth by reducing litigation-related costs for businesses.
Frivolous Lawsuits: Advocates argue that reform can help curb frivolous or meritless lawsuits, preventing unnecessary legal expenses and court congestion.
b. Arguments Against Tort Reform:
Access to Justice: Critics assert that tort reform may limit individuals' access to the legal system and their ability to seek compensation for legitimate injuries.
Accountability: Some argue that tort reform can reduce accountability for wrongful conduct, potentially leading to a decrease in corporate responsibility and safety measures.
State Sovereignty: Opponents contend that tort reform may infringe on states' rights, as tort law is primarily a state matter. Federal involvement in reform could be seen as an overreach of authority.
Tort reform remains a contentious issue, with varying perspectives on the balance between protecting individuals' rights to seek compensation for injuries and addressing potential abuses in the legal system. The specific arguments and approaches to reform may differ among jurisdictions.
Chances are, you've encountered a scene quite like this near your own neighborhood—a construction site adorned with an array of vibrant orange traffic cones equipped with reflective stripes to ensure visibility even during the night. A prominent, oversized sign sternly cautioning vehicles against any attempts to traverse this road adds to the site's warning ensemble.
Now, picture the scene devoid of its array of traffic cones, caution tape, and warning signs. If you were behind the wheel, would you dare to venture onto this road?
The answer would likely be a resounding "no." The construction site is glaringly evident, and an attempt to navigate it could lead to substantial damage to your property (namely, your vehicle) and pose a severe risk to your personal safety. This stands true not only for motorists but also for pedestrians, skateboarders, and cyclists, who would instinctively avoid this perilous path, even if it weren't cordoned off or conspicuously marked. So, one may wonder, why do construction workers invest their time and resources in setting up the cones, signs, and tape?
The answer lies in the realm of tort law, a domain that encompasses civil wrongs outside the realm of contractual breaches. In simpler terms, a tort refers to any legally recognizable harm resulting from the actions (or in some cases, the failure to act) of individuals or corporations. Corporations also grapple with contract law, which comprises the other major facet of civil law. Several key distinctions set torts apart from contracts.
Firstly, consider the array of potential plaintiffs. In contract law, only those with whom you've entered into a contract or third-party beneficiaries (such as when you're named the beneficiary in a life insurance policy, and the company refuses to fulfill the claim) have the right to sue for breach of contract. Conversely, in tort law, nearly anyone can bring a lawsuit as long as they can establish that you owe them a legally recognized duty of care. The second pivotal divergence pertains to damages or remedies. Contract law typically calculates damages with relative ease, as its aim is to restore the parties to the same position they would have been in had the agreement been fulfilled, often referred to as compensatory damages. While compensatory damages also apply in tort law, they are significantly more intricate to ascertain. Tort law grapples with the daunting task of attempting to quantify a suitable monetary equivalent for losses that money cannot truly rectify, such as loss of life or limb. Additionally, tort law frequently permits the awarding of punitive damages, a recourse seldom granted in the realm of contract law.
There's also a significant overlap between tort law and criminal law, where certain actions can constitute both a criminal offense and a civil tort. Consider, for instance, the scenario where Claire inexplicably punches Charlie in the abdomen. In this case, Claire is liable for both the tort of battery and the crime of battery. In the realm of tort law, Charlie has the option to file a civil lawsuit against Claire to seek monetary damages, typically covering his pain, suffering, and medical expenses. This civil case hinges on the preponderance of evidence standard for proof.
Simultaneously, the same incident could lead Charlie to file a criminal complaint with the prosecutor's office. When individuals harm one another without provocation or justification, it's deemed detrimental to society, and the prosecutor may initiate a criminal case against Claire. In this scenario, the people of the state sue Claire for the crime of battery. If Claire is convicted beyond a reasonable doubt, she may face penalties in the form of fines imposed by the government and the potential loss of her liberty. In the criminal case, Charlie doesn't receive any direct compensation from Claire; rather, he finds satisfaction in knowing that his attacker has been convicted of a crime.
As discussed in Chapter 3 on "Litigation," it's crucial to recognize that the burden of proof in criminal cases (beyond a reasonable doubt) is significantly higher than that in civil cases (preponderance of evidence). Therefore, a conviction in a criminal case automatically establishes liability in civil tort law under the doctrine of negligence per se. This is why criminal defendants looking to avoid a criminal trial may opt to plead "no contest" to criminal charges, allowing the judge to sentence them as if they were guilty while preserving their right to defend against a civil tort lawsuit.
Unlike many other areas of law, tort law is a direct reflection of American societal values. Contracts are enforced to uphold the expectation that promises will be honored, while criminal laws arise from legislatures prohibiting behavior considered offensive or immoral by the community. In contrast, tort law is not typically the result of legislative debate or committee reports. Each tort case arises from unique factual circumstances, and a jury of peers is tasked with determining whether the tortfeasor (the person committing the tort) has violated a particular societal norm. Additionally, it is generally expected that when an employee is acting in the employer's interest and commits a tort, the employer should be held responsible. Under the respondeat superior doctrine, employers are indeed liable, unless they can demonstrate that the employee was engaged in a significant departure from their work responsibilities at the time the tort was committed.
Tort law, at its core, is rooted in the norms and expectations that society upholds. These norms serve as the foundation of tort law, defining what is considered acceptable behavior within our communities. For instance, we hold the expectation that we have the right to move freely without interference, except when detained legally. When someone infringes upon this right, they commit the tort of false imprisonment. Similarly, we anticipate that when a spill occurs in a grocery store, the store owners will swiftly alert other customers to the slippery floor and promptly address the spill. Failure to meet this standard of care may lead to a claim of negligence. Likewise, we trust that the products we purchase for everyday use won't unexpectedly and without explanation cause harm. If such harm occurs, a tort has transpired.
It's worth noting that tort law is a distinctive feature of American legal tradition. In contrast to certain Asian countries influenced by Buddhist beliefs, where change is considered an inherent part of life, and resisting it may be seen as causing human suffering, American culture tends to adopt a questioning and investigative approach when accidents or injuries occur. Many Americans tend to question and seek explanations when unexpected injuries or fatalities happen, often seeking to attribute responsibility.
Torts can be broadly classified into three categories based on the level of intent displayed by the tortfeasor. An intentional tort occurs when the tortfeasor deliberately intends to cause harm or damage through their actions. Negligence, on the other hand, arises when the tortfeasor fails to act in a manner consistent with what a reasonable person would do, even if they did not intend to cause harm. Lastly, strict liability applies when a tortfeasor is involved in certain activities, and if someone is injured or killed, they are held liable regardless of their level of care or negligence.
In this chapter, we will delve into these three key areas of tort law to provide a comprehensive understanding of the responsibilities imposed on both individuals and corporations. The chapter will conclude with a brief examination of other pertinent issues affecting torts, including the topic of tort reform.
7.1.1 Intentional Torts
Intentional torts are a category of civil wrongs in which the defendant's actions are purposefully designed to cause harm, injury, or some form of damage to the plaintiff. Unlike negligence, where the key element is the failure to exercise reasonable care, intentional torts involve a deliberate and willful act that leads to harm. Let's explore some common intentional torts and the defenses that may be raised in response to them.
1. Assault: Assault occurs when one person intentionally threatens or causes fear of immediate bodily harm to another person. It's important to note that assault doesn't require actual physical contact but only the apprehension of harm. The key elements are the intentional act, the reasonable apprehension of imminent harmful or offensive contact, and the defendant's capacity to carry out the threat. A defense to assault may include showing that there was no genuine intent to harm or that the plaintiff did not have a reasonable fear of harm.
2. Battery: Battery is the intentional and wrongful physical contact with another person without their consent. Unlike assault, battery involves actual physical contact. The key elements of battery include the intentional act, harmful or offensive contact, and the absence of consent. A common defense to battery is consent, where the plaintiff willingly agreed to the contact or acted in a manner that implied consent.
3. False Imprisonment: False imprisonment involves intentionally restraining another person's freedom of movement without their consent or legal justification. Key elements include the intentional act, restraint, awareness of the plaintiff regarding the confinement, and the absence of consent or lawful authority. A potential defense could be the presence of legal justification or consent.
4. Intentional Infliction of Emotional Distress: This tort arises when a defendant's intentional actions result in severe emotional distress to the plaintiff. The key elements are the defendant's intentional and outrageous conduct, the causation of severe emotional distress, and a causal connection between the conduct and the distress. A defense may involve showing that the defendant's behavior was not extreme or outrageous or that the plaintiff's distress was not severe.
5. Defamation: Defamation involves making false statements about someone, whether spoken (slander) or written (libel), that harm their reputation. The key elements include the making of false statements, publication to a third party, actual harm or damage to the plaintiff's reputation, and negligence or actual malice in the case of public figures. Common defenses to defamation include truth, opinion, and the existence of privileged communication.
6. Trespass to Land: Trespass to land occurs when someone intentionally enters another person's property without permission. The key elements include the intentional entry onto the land, regardless of whether the defendant knew they were trespassing. A defense may involve showing consent or a lack of intent.
7. Trespass to Chattels and Conversion: Trespass to chattels is the interference with another person's personal property, while conversion is a more serious interference that deprives the owner of their property. The key elements include the intentional interference with someone's personal property. A defense may involve showing a lack of intent, consent, or justification.
Defenses to Intentional Torts: Defenses to intentional torts may include consent, self-defense, defense of others, defense of property, necessity, and privilege. These defenses often depend on the circumstances surrounding the alleged tort and can mitigate or excuse liability. For instance, a defendant might argue that the plaintiff consented to the action, or that their actions were taken in self-defense or defense of others.
In summary, intentional torts involve actions done with the intent to cause harm, whether physical, emotional, or reputational, to another person. Defenses to intentional torts revolve around justifying or mitigating the defendant's actions based on legal principles and the specific circumstances of the case.
The office scene depicted illustrates a grave and unlawful act, as the office worker on the right has seized the colleague on the left, subjecting him to strangulation. This conduct not only constitutes a criminal offense but also qualifies as a tort. Given the intentional nature of the tortfeasor's actions in grasping his colleague's neck, this tort is categorized as an intentional one, and it is likely to encompass elements of both assault and battery.
In the realm of intentional torts, the tortfeasor possesses the intent to bring about the consequences of their actions or is well aware, with substantial certainty, that specific consequences will result from their conduct. It's important to note that this intent can be transferred in some situations. For instance, if an individual swings a baseball bat in your direction, and you manage to evade the swing, but the bat inadvertently strikes a person nearby, that individual is now the victim of a tort, even if the person swinging the bat had no intention of hitting the unintended victim.
Beyond the physical pain associated with being strangled by a coworker, the victim may experience a significant degree of fear. This fear, a sensation we hope never to endure, lays the foundation for the tort of assault. Assault is characterized by an intentional, unexcused act that triggers a reasonable sense of apprehension or fear of immediate harmful or offensive contact in another person. Importantly, actual fear is not a prerequisite for assault; mere apprehension suffices. For example, consider a situation where you are about to sit on a chair, only to discover that a friend has pulled it away, creating a sense of apprehension about falling. In this scenario, this sense of apprehension constitutes assault. Similarly, even if the likelihood of fear is low or absent, a diminutive ninety-pound woman attempting to strike a robust three-hundred-pound police officer with her bare fists can be held liable for assault if the police officer experiences apprehension. Physical injuries are not a prerequisite for assault, and it's not necessary for the tortfeasor to intend to induce fear or apprehension. For instance, if someone were to jest by pointing a very realistic-looking toy pistol at a stranger and saying, "Give me all your money," a reasonable person's perception of fear or apprehension in that situation would still constitute assault, given the tortfeasor's intent to brandish the lifelike toy pistol.
A battery represents the culmination of an assault, signifying any unconsented physical contact, even in the absence of apparent physical injuries. Crucially, in a battery, the contact or touching need not occur in person. It can encompass instances such as seizing someone's clothing or cane, swinging a baseball bat at an individual seated in a car, or discharging a firearm (or even a Nerf ball, when unconsented) at someone. Notably, assault and battery are not always conjoined. Shooting someone in the back typically constitutes battery but not assault since the victim didn't anticipate the bullet and thus didn't experience fear or apprehension. Similarly, instances like a surgeon performing unwanted surgery or a dentist committing misconduct on a sedated patient are considered battery but not assault. Sending someone poisoned brownies in the mail would be regarded as battery without an associated assault. On the other hand, actions like spitting in someone's face or attempting an unwelcome kiss would constitute assault and could potentially escalate to battery if the spit makes contact with the victim's face or the unwanted kiss touches any part of the victim's body.
When facing a lawsuit for assault or battery, several defenses are available. The first and foremost is consent. For instance, players on a sports team or boxers in a boxing ring are generally deemed to have given their consent to be subjected to physical contact. Self-defense and defense of others are also recognized defenses, with the caveat that any self-defense must be proportionate to the initial force.
It is worth noting that a battery must result in some form of physical contact with the plaintiff. When such physical contact is absent, some courts may allow the plaintiff to assert a different tort known as intentional infliction of emotional distress (IIED). Essentially, IIED can be thought of as a battery to one's emotions, but exercising caution is crucial in its application. Many people experience emotional distress to varying degrees in daily life due to various stressors. For instance, someone might react angrily when cut off in traffic, express indignation when someone cuts in line, or experience emotional pain when a romantic relationship ends. These common everyday irritations, insults, or even threats are not typically actionable in tort law. IIED is intended to protect against only the most extreme and outrageous behaviors. To win an IIED case, the plaintiff must demonstrate that the defendant's behavior is so outrageous that a reasonable member of the community, when presented with the facts of the case, would exclaim that the conduct is "outrageous." It's important to note that this standard is objective; the plaintiff's own feelings of outrage are insufficient. In some jurisdictions, there is an additional requirement for the plaintiff to show some physical manifestation of the psychological harm, such as sleeplessness or depression, to be eligible for any recovery. This safeguards against potential abuse and frivolous litigation while emphasizing the severity of the emotional distress.
The Westboro Baptist Church, a relatively small fundamentalist congregation with around seventy members, is headquartered in Topeka, Kansas. Led by their pastor, Fred Phelps, the church's members hold the belief that American soldiers' deaths in Iraq and Afghanistan are a form of divine punishment inflicted by God upon the United States due to the country's perceived tolerance of homosexuality. As a means of expressing their views, church members embark on journeys across the country to picket at the funerals of fallen soldiers, brandishing large, bold signs with contentious messages. Some of these signs carry messages such as "Thank God for Dead Soldiers."
In 2006, church members picketed the funeral of Marine Lance Corporal Matthew Snyder, an act that led Snyder's father to file a lawsuit against Phelps and the church, asserting claims of intentional infliction of emotional distress (IIED) and other tort allegations. The jury found in favor of Snyder's family, awarding them over $5 million in damages. However, on appeal, the U.S. Court of Appeals for the Fourth Circuit overturned the verdict. The court acknowledged that the speech in question was "distasteful and repugnant," but it stressed that judges tasked with defending the Constitution sometimes must protect the rights of individuals whose actions are considered offensive. To abandon this duty because of the unpleasant nature of the parties involved would be a betrayal of the principles upon which freedom is built. The court emphasized that throughout history, the safeguards of liberty have often been established through disputes involving individuals who may not be considered virtuous. This case, known as Snyder v. Phelps, was eventually accepted by the U.S. Supreme Court.
Furthermore, it's important to mention that, as a result of the Court of Appeals' decision, Snyder's family was ordered to pay over $16,000 in legal fees to the Westboro Baptist Church. This ruling sparked an outpouring of support for Snyder on Facebook, with a group titled "I Support Al Snyder in His Fight against Westboro Baptist Church" attracting attention and solidarity from individuals across the platform.
The U.S. Supreme Court's acceptance of the case indicates its significance and the potential for setting legal precedents regarding the boundaries of free speech, even when it involves deeply offensive and controversial expressions.
While the standard for determining outrageous conduct in an intentional infliction of emotional distress (IIED) case is objective, it's important to recognize that the evaluation is based on the specific sensitivities of the plaintiff involved. Exploiting known sensitivities in vulnerable individuals such as children, the elderly, or pregnant women can indeed give rise to an IIED claim. For example, making a prank telephone call to a mother whose son is serving in the military, falsely claiming that her son has been killed in action, would undoubtedly meet the criteria for IIED, given the extreme emotional distress such a hoax would likely cause.
Companies must exercise caution when dealing with sensitive employment situations, particularly during terminations or layoffs, to mitigate the risk of potential IIED liability. This is especially pertinent for businesses that have a high level of public interaction. Entities engaged in activities like debt collection and foreclosure must be vigilant in avoiding harassment, intimidation, or threats when dealing with individuals they interact with regularly. In one instance involving a foreclosure case, Bank of America faced a lawsuit from a mortgage borrower after the bank's local contractor entered the borrower's home, disconnected utilities, padlocked the door, and confiscated her pet parrot for over a week, resulting in significant emotional distress.
Likewise, companies need to exercise discretion to avoid IIED claims. In 2006, Walgreens encountered an IIED lawsuit when pharmacists accidentally stapled a form meant for internal notes about patients to patient medications. The form was intended to contain annotations about patients, but some pharmacists filled it with derogatory comments such as "Crazy! She's really a psycho! Do not say her name too loud; never mention her meds by name." Such actions led to a lawsuit and public scrutiny.
These examples illustrate the potential liability businesses face when engaging in conduct that causes severe emotional distress to individuals, particularly in situations where personal sensitivities and vulnerabilities are exploited or where interactions are marred by disrespectful or degrading behavior.
Russell Christoff
Another intentional tort worth noting is the invasion of privacy, which encompasses several forms, with misappropriation being one of the most prevalent. Misappropriation occurs when an individual or company employs someone else's name, likeness, or other identifying characteristics without proper authorization. For example, in 1986, model Russell Christoff participated in a photo shoot for Nestlé Canada to promote Taster's Choice coffee. He received $250 for the shoot and was promised an additional $2,000 if Nestlé used his image on its product. In 2002, he discovered that Nestlé had indeed used his photo on Taster's Choice coffee without his consent, leading him to sue Nestlé for misappropriation. A California jury awarded him over $15 million in damages.
Misappropriation is a broad tort as it encompasses more than just the unauthorized use of a photograph or drawing; it extends to any likeness or identifying characteristic. For instance, in 1988, Ford Motor Company approached Bette Midler to perform a song for a commercial, but she declined the offer. The company then hired a performer who sounded strikingly similar to Midler to sing one of her songs and asked her to mimic Midler as closely as possible. While the company had secured the necessary copyright permissions for the song, Midler filed a lawsuit, asserting that Ford had committed misappropriation by employing a sound-alike. An appellate court ruled that while Ford had not infringed upon the copyright, they had indeed misappropriated Midler's right to publicity by using a sound-alike, resulting in a jury award of over $400,000 in damages.
Additionally, an individual's voice or any other identifying characteristic can serve as the basis for misappropriation. For instance, Samsung Electronics ran a series of print advertisements to showcase the durability of their products. One of these ads featured a female robot wearing a wig, gown, and jewelry, posed next to a game show board resembling the one from the TV show "Wheel of Fortune." An appellate court ruled in favor of Vanna White's claim of misappropriation, emphasizing that the law safeguards a celebrity's exclusive right to exploit the value of their identity, regardless of how they attained fame—whether through exceptional talent, sheer luck, or a combination of both.
For companies, the lesson is clear: when using individuals in their marketing materials or advertisements, obtaining proper permission is essential. This not only pertains to individuals featured in the materials but also extends to anyone who may have a valid claim to their likeness or identifying characteristic in the content.
Invasion of privacy can also manifest as an invasion of physical solitude. Actions like peeping through windows, eavesdropping, and rummaging through someone's trash to uncover confidential information, such as bank or brokerage statements, all fall under this category of tort. Media outlets that employ overly aggressive tactics to obtain photographs of private citizens may occasionally find themselves in violation of this tort as well.
Another significant intentional tort that businesses should be aware of is false imprisonment. This tort occurs when an individual intentionally confines or restricts another person's freedom of movement or activities without justification. It aims to protect an individual's right to travel and move freely without hindrance. To constitute false imprisonment, there must be an actual and present confinement. For instance, if a professor locks the doors to a classroom and declares that no one can leave, this qualifies as false imprisonment. However, if the professor leaves the doors unlocked but threatens students with an "F" in the course if they attempt to leave, this does not constitute false imprisonment. On the other hand, a threat to withhold personal property can also be categorized as false imprisonment, such as when a professor seizes a student's laptop and declares, "If you leave, I'll keep your laptop."
Companies that organize employee morale-building activities should be cautious, as compelling employees to participate in activities they do not wish to engage in can raise concerns related to false imprisonment. False imprisonment can be particularly problematic for businesses that regularly interact with the public, such as retailers, hotels, and restaurants. For instance, if a business's actions result in a customer being arrested by the police, it may give rise to a false imprisonment claim. In one case, a pharmacist who suspected a customer of forging a prescription intentionally caused the customer to be detained by the police. When the prescription was later verified as legitimate, the pharmacist faced a lawsuit for false imprisonment. Businesses, however, have the right to detain potential thieves until the police arrive at the establishment, known as the shopkeeper's privilege. It's important to note that the detention must be reasonable. Store employees should not use excessive force when detaining a suspect, and the grounds, manner, and duration of the detention must be reasonable; otherwise, the store may be held liable for false imprisonment.
Intentional torts can also extend to property, involving actions against both real and personal property. Trespass to land occurs whenever an individual enters upon, above, or below the surface of land owned by someone else without the owner's permission. This trespass can be momentary or fleeting and does not require a physical presence—soot, smoke, noise, odor, or even a flying arrow or bullet can serve as the basis for a trespass claim. In suburban neighborhoods where property lines between homes are often not clearly marked, children may frequently trespass. In such cases, homeowners bear a reasonable duty of care to ensure that these children are not harmed. When there's an attractive nuisance on the property, homeowners must take steps to both warn children about the potential danger and protect them from harm. The attractive nuisance doctrine can apply to items like swimming pools, abandoned cars, refrigerators left outside for collection, trampolines, piles of sand or lumber, or anything that could pose a danger to children who may not comprehend or appreciate the risks involved. However, there may be circumstances when trespass is justified, such as when someone is invited by the property owner, making them an invitee until asked to leave, or when individuals like meter readers or utility technicians have a license to enter the property. Trespass may also be necessary in situations where it's crucial to rescue someone in distress.
Trespass to personal property involves the unlawful taking or damaging of another person's personal property without the owner's consent. For instance, if your roommate borrowed your vehicle without your permission, it would constitute trespass to personal property. On the other hand, the tort of conversion arises when someone permanently takes your property, making it the civil equivalent to the crime of theft. If you had given your roommate permission to use your car for a day, but they decided to steal it instead, it would be considered conversion rather than trespass. Similarly, an employer who refuses to pay you for your work has committed conversion, as they have unlawfully deprived you of your rightful property or wages.
Another significant intentional tort is defamation, which involves wrongfully damaging a living person's good reputation. Defamation can take two forms: oral defamation, known as slander, and written defamation, which is referred to as libel. To establish liability for defamation, the defamatory statements must be communicated to a third party. For instance, there is no liability for defamatory words written in a secret diary, but there would be liability for defamatory comments left on a public platform like a Facebook wall. Disputes may arise when it comes to celebrities and public figures who believe they have been defamed by sensationalist "news" organizations covering celebrity gossip. The First Amendment provides robust protection for such news organizations, and courts typically require public figures to demonstrate actual malice to win a defamation lawsuit. This means they must prove that the media outlet either knew that the information it published was false or acted with reckless disregard for the truth. This is a much higher standard than the one applicable to ordinary citizens, making it challenging for public figures to prevail in defamation lawsuits. Notably, truth serves as an absolute defense against defamation claims.
Defamation can also extend to goods or products rather than individuals. In most states, injurious falsehood (or trade disparagement) occurs when someone disseminates false information about another person's product. For example, in 1988, the influential product testing magazine Consumer Reports conducted a test of the Suzuki Samurai small SUV, asserting that it "easily rolls over in turns." This report led to a significant drop in product sales, and Suzuki subsequently sued Consumers Union, the publisher, for trade disparagement. The case was eventually settled nearly a decade later after an extended and costly legal battle.
Businesses frequently make claims about their products as part of their marketing efforts. If these claims are false, the business may be held liable for the tort of misrepresentation, which is known as fraud in some states. Fraud necessitates that the tortfeasor misrepresent facts (not opinions) with full knowledge that they are false or with reckless disregard for the truth. It's important to note that an "innocent" misrepresentation, where someone provides false information unknowingly, does not meet the criteria for fraud—a defendant must be aware of their dishonesty. Fraud can emerge in various business contexts, such as fabricating information on a résumé to secure employment, falsifying information on a credit application to obtain credit or rent an apartment, or in product marketing. There is a fine line between puffery, or seller's exaggerated claims, and actual deceit. For instance, if an advertisement declares that a particular car is the "fastest new car you can buy," fraud liability arises if there is indeed a car that is faster. Conversely, an advertisement promising "unparalleled luxury" is considered puffery since it expresses an opinion. Manufacturers of dietary supplements and vitamins are often the targets of fraud lawsuits for making false claims about their products.
Lastly, an important intentional tort to consider is tortious interference. This tort, which can vary significantly from state to state, prohibits the intentional interference with a valid and enforceable contract. To be liable, the defendant must have knowledge of the contract and intentionally induced a party to breach the contract. For instance, in 1983, the oil giant Pennzoil made an offer to purchase a smaller oil rival, Getty Oil. A competitor of Pennzoil, Texaco, became aware of the deal and presented Getty with a higher bid, which Getty ultimately accepted. Pennzoil filed a lawsuit against Texaco, and a jury awarded over $10 billion in damages.
Westboro Baptist Church and Intentional Infliction of Emotional Distress (IIED):
Whether the conduct of the Westboro Baptist Church picketing at soldier funerals constitutes extreme and outrageous conduct for the purposes of an IIED claim is a matter for the courts to decide. In the United States, IIED claims generally require conduct that is extreme, outrageous, and intentional, leading to severe emotional distress. The church members claim that their actions are protected by the First Amendment, as they involve expressing a political opinion.
Courts have grappled with the tension between free speech and IIED claims in various cases. While the Supreme Court has ruled that certain offensive and provocative speech is protected by the First Amendment, it doesn't mean that all such speech will be immune from IIED claims. The courts often have to balance the right to free speech with the harm caused to the plaintiffs.
IIED Lawsuits for Public Figures:
In the case of public figures and celebrities, courts often require a higher standard for IIED claims due to the First Amendment. The Supreme Court's decision in "Hustler Magazine v. Falwell" established that public figures must show that the speech in question is not only offensive but also that it was made with "actual malice" (knowledge of its falsity or reckless disregard for the truth). This higher standard aims to protect free speech, even when it is offensive or satirical, as in the case of the Hustler advertisement.
Misappropriation and Identifying Characteristics:
The tort of misappropriation typically involves the unauthorized use of a person's name, likeness, or identity for commercial purposes. Whether an "identifying characteristic" should be protected can depend on the specific laws in place and the legal standards of a jurisdiction.
The First Amendment does provide exceptions for satire and comedy, as you mentioned. Comedians like Tina Fey and Jon Stewart can use misappropriation for comedic purposes, but this may not apply to other businesses. These exceptions are based on the recognition that satire and comedy often involve exaggeration and parody, and they have a long history of protection under the First Amendment.
Advertisement Featuring "Lindsay":
In the case of the advertisement you mentioned, whether it refers to Lindsay Lohan or not would likely depend on the specific context and whether the use of the name "Lindsay" creates confusion or implies an endorsement by the celebrity. The use of a common first name may not necessarily constitute misappropriation unless it is closely linked to a specific individual in a way that creates confusion or implies endorsement.
The risk of being sued for using a name in advertisements would depend on various factors, including the context, the celebrities' level of recognition, and the specific laws in place.
7.2.2 Negligence
Under the tort of negligence, individuals owe certain duties of care to others, and a breach of these duties can lead to legal liability. Here's an overview of the key elements of negligence:
Duty of Care:
In negligence cases, a duty of care is a legal obligation to act reasonably and prudently to avoid causing harm to others. Generally, we owe a duty of care to those who are reasonably foreseeable as potentially affected by our actions. The specific duty can vary based on the circumstances and the relationship between the parties. For example, a driver owes a duty of care to other road users to operate their vehicle safely.
Breach of Duty:
A breach of duty occurs when an individual fails to meet the standard of care expected under the circumstances. To determine whether a breach has occurred, courts typically apply the "reasonable person" standard. This means that a person is considered negligent if their actions or omissions fall below what a reasonable person would have done under similar circumstances. If a breach is established, the defendant can be held liable for their negligent conduct.
Causation:
Causation in a negligence case involves two components:
a. Actual Causation (Cause in Fact): The plaintiff must demonstrate that the defendant's actions were the actual cause of the harm suffered. This is often referred to as the "but-for" test, meaning that but for the defendant's actions, the harm would not have occurred.
b. Proximate Causation (Legal Causation): Proximate causation, also known as legal causation, involves determining whether the harm suffered was a reasonably foreseeable consequence of the defendant's breach of duty. If the harm was not reasonably foreseeable, the defendant may not be held liable for it.
Damages:
To succeed in a negligence suit, the plaintiff must demonstrate that they have suffered actual harm or damages as a result of the defendant's breach of duty. Damages can include physical injuries, property damage, medical expenses, loss of income, pain and suffering, and other losses directly attributable to the defendant's negligence.
Defenses to Negligence:
Several defenses may be raised in a negligence case:
a. Contributory Negligence: This defense argues that the plaintiff's own negligence contributed to their injuries. In some jurisdictions, contributory negligence can be a complete bar to recovery, while in others, it may reduce the damages awarded.
b. Comparative Negligence: Many jurisdictions have adopted a comparative negligence system, which allows for a proportionate reduction in damages based on the degree of fault of both the plaintiff and the defendant.
c. Assumption of Risk: If the plaintiff voluntarily assumed the risk of a known danger, they may not be able to recover for injuries resulting from that risk.
d. Lack of Duty or Breach: The defendant may argue that they did not owe a duty of care to the plaintiff or that they did not breach any duty.
e. Immunity: In some cases, defendants may have immunity from liability, such as government entities with sovereign immunity or individuals protected by specific statutes or regulations.
It's important to note that the specific elements and standards for negligence may vary by jurisdiction, and the outcome of a negligence case often depends on the specific facts and circumstances involved. Legal principles, precedent, and statutes play a significant role in shaping the standards and defenses related to negligence.
Generally, we don't anticipate that perfectly sound airplanes will inexplicably plummet from the sky. When such tragic incidents occur due to carelessness or a failure to act reasonably, the principles of negligence may come into play. According to state tort law, all individuals bear the responsibility to behave reasonably and exercise a reasonable level of care in their interactions with others. When this duty is breached, resulting in harm, it constitutes negligence. Unlike intentional torts, negligence lacks an intent to cause harm. For instance, if a pilot deliberately crashes an airplane to harm others, the tort involved might be assault or battery. However, when there's no intent to harm, negligence can still hold the pilot or airline accountable for their negligence or failure to exercise due care.
It's important to note that the definition of negligence is intentionally broad. Negligence revolves around the breach of the duty we owe to others, as determined by state tort law. This duty often extends beyond legal obligations. For instance, Colgan Air may have adhered to all relevant laws passed by Congress and yet be found negligent. In a sense, the concept of negligence is an embodiment of local democracy, as it is ultimately citizen juries (as opposed to legislatures) that determine which behaviors lead to liability.
To establish negligence, plaintiffs must demonstrate the presence of four key elements. First, they must establish that the defendant owed a duty to the plaintiff. Second, the plaintiff needs to show that the defendant breached this duty. Third, the plaintiff must prove that the defendant's actions were the cause of the injury. Finally, the plaintiff has to demonstrate legally recognizable injuries. Let's examine each of these elements in detail.
To establish the first element of a negligence claim, the plaintiff must demonstrate that the defendant owed them a duty of care. In our society, the general rule is that individuals are free to act as they choose, as long as their actions do not infringe upon the rights or interests of others. This means that, ordinarily, you are not obligated to provide assistance to anyone in need. For example, if you are driving along a deserted rural highway at night during a snowstorm and witness another car fishtailing into a ditch, you are under no obligation to stop and render aid or even report the accident, as you do not owe the stranded driver any special duty.
However, the situation changes when your actions directly contribute to the harm. For instance, if you run a stop sign, causing the other driver to end up in the ditch, you now owe a duty of care to that driver because your negligence played a role in their predicament.
Another way to assess the existence of a duty is by considering whether the plaintiff is a foreseeable party who may be affected by the defendant's actions. If the risk of harm is foreseeable, then a duty of care is established. For instance, if you carelessly discard a banana peel on a public sidewalk, it is foreseeable that someone walking by may slip on it and suffer injuries. By throwing away the banana peel carelessly, you now owe a duty of care to anyone who might potentially walk on the peel because any of those individuals could foreseeably step on it and slip.
A developing aspect of tort law concerns whether businesses have a duty to warn or protect their customers from random crimes committed by other customers. Crimes are typically considered random and unforeseeable, but some cases have established that if a business is aware of, or should be aware of, a high likelihood of criminal activity occurring on its premises, the business must take steps to warn or protect its customers. For example, in one case, a state supreme court held Burger King liable when a worker ignored a group of rowdy teenagers who later assaulted other customers. In another case, the Las Vegas Hilton was held liable for sexual assault committed by a group of naval aviators because evidence presented at trial revealed that the hotel was aware of a history of sexual misconduct by that particular group.
The concept of duty in negligence law extends beyond those in immediate physical proximity. In a notable California case, a radio station targeting a significant teenage audience organized a contest in which a mobile DJ provided clues to his locations as he moved around the city. The first listener to decipher his location and reach him stood to win a cash prize. In an unfortunate turn of events, a minor listener, while rushing towards the DJ, negligently caused a car accident, resulting in the death of the other driver.
During the negligence trial, the radio station argued that foreseeability couldn't be determined in hindsight, and therefore, the station did not owe a duty of care to the deceased driver. However, the California Supreme Court ruled that when the radio station initiated the contest, it was foreseeable that a young and inexperienced driver might drive negligently to claim the prize. Hence, a duty of care existed in this context (Weirum v. RKO General, 15 Cal.3d 40, 1975). This case serves as a reminder that entities like radio stations must exercise caution when conducting promotional contests to prevent foreseeable injuries or fatalities.
The general rules regarding the existence of a duty can be adapted to special circumstances. For instance, landowners owe a duty to exercise reasonable care to protect individuals on their property from foreseeable harm, even if those individuals are trespassers. If you are aware of hazards like a weak step or a faucet that dispenses scalding hot water, you have an obligation to take steps to warn guests about these known dangers. This duty extends beyond the normal bounds of legal liability, as it aims to ensure the safety of anyone who enters your property, whether they are expected guests or trespassers.
Businesses have a duty to exercise a reasonable degree of care in order to protect the public from foreseeable risks that the owner either knew about or should have reasonably known. Retail stores, for instance, present various foreseeable risks to customers, such as improperly placed objects on high shelves that could fall, light fixtures that may explode or fall due to improper installation, or accidents involving forklifts in warehouse stores. One particularly hazardous concern for businesses is the presence of liquids on walking surfaces, which can pose significant dangers. Spills of products like milk, orange juice, wine, as well as melted ice or snow, or rain can create slippery conditions. If a store is aware of such conditions or should have been aware of them, it must promptly warn customers and take steps to address the situation.
Business professionals, such as doctors, accountants, dentists, architects, and lawyers, have a heightened duty to act as reasonable professionals within their respective fields. When these professionals commit negligence in their work, it is commonly referred to as malpractice. Medical mistakes in hospitals, for instance, result in a substantial number of preventable deaths each year, according to government estimates (U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality).
Once the duty of care has been established, negligence plaintiffs must demonstrate that the defendant breached that duty. A breach is proven by showing that the defendant failed to act reasonably when compared to a hypothetical reasonable person. This reasonable person, who is a legal construct, never experiences fatigue, drowsiness, anger, or intoxication. Instead, this hypothetical individual is consistently careful, weighing the consequences of their actions thoughtfully before proceeding. In practice, once the duty has been established, the presence of injury or harm is often sufficient to fulfill the "breach of duty" requirement.
The third element of negligence revolves around causation. When determining causation, courts must address two critical questions. The first question pertains to causation in fact, often referred to as but-for causation. This form of causation is relatively straightforward to establish. It seeks to answer the question: Would the plaintiff have suffered injury "but for" the actions of the defendant? If the answer is yes, then but-for causation is satisfied. For instance, if you are texting while driving and you strike a pedestrian due to your diverted attention, but-for causation is clearly met, as without your texting while driving, the pedestrian would not have been hit.
The second question is more complex and deals with whether the defendant's actions were the proximate cause of the plaintiff's injury. When addressing this question, the courts are concerned that causation in fact could be taken to an overly broad and logical extreme. For example, if a speeding truck driver crashes their vehicle, leading to the closure of the interstate highway for several hours, which, in turn, causes you to miss a crucial job interview, you could argue that but for the truck driver's negligence, you might have secured the new job. However, it would not be fair or just to hold the truck driver liable for all the missed appointments and meetings resulting from a subsequent traffic jam after the crash. At some point, the law needs to break the chain of causation. The truck driver may be held responsible for the injuries arising from the crash but not for events occurring beyond the crash. This concept is referred to as proximate causation.
Palsgraf v. Long Island Railroad Company
In determining the existence of proximate cause, we once again apply the foreseeability test, which is also used to determine whether a duty exists. If an injury is foreseeable, then proximate cause is established. If the injury is unforeseeable, then proximate cause does not exist.
In some cases, establishing a specific source for a product can be challenging, making the proof of causation difficult. This challenge is particularly prevalent in mass tort cases where victims may have been exposed to hazardous substances from multiple sources over many years. For instance, imagine you've been taking a vitamin supplement for years, purchasing it from different companies that sell the same product. After some time, the government issues a warning that this supplement can be harmful to health and halts its sales. You later discover that your health has been adversely affected by this supplement and decide to file a tort lawsuit. The problem is that you don't know which manufacturer's supplement caused your illness, making it impossible to pinpoint a specific manufacturer responsible for your condition. However, under the doctrine of joint and several liability, you are not required to identify the specific manufacturer who sold you the harmful drug. You can sue one, two, or all of the manufacturers of the supplement, and if any of the defendants are found liable, they are collectively responsible for the entirety of your damages. This doctrine has been applied in cases involving asbestos production and distribution.
The final element in negligence is the presence of legally recognizable injuries. If someone walks on a discarded banana peel without slipping or falling, for example, no tort has occurred. However, if someone is injured, then damages may be awarded to compensate for those injuries. These damages are typically awarded in the form of monetary compensation because tort law cannot resurrect the deceased or regenerate lost limbs, and it does not involve incarceration. Therefore, money is the primary means of measuring damages, and it is the responsibility of the jury to determine the appropriate amount of compensation for the plaintiff.
In tort law, there are two types of damage awards. The first type is compensatory damages, which are intended to compensate the plaintiff for their injuries. Compensatory damages can cover various aspects, including medical expenses, economic losses (such as property damage or loss of income), and pain and suffering. These damages can also account for past, present, and future losses. While medical and economic damages can often be calculated using established standards, determining the value of pain and suffering is a more subjective and abstract task. Juries are typically entrusted with the responsibility of deciding how much money can adequately compensate for pain and suffering, considering factors like the intensity, duration, and impact of the pain on the plaintiff's life.
The second type of damage award is punitive damages. In this case, the jury awards a sum of money not to compensate the plaintiff, but to serve as a deterrent to the defendant, discouraging them from engaging in similar conduct in the future. The underlying concept behind punitive damages is that compensatory damages alone may not be sufficient to deter future wrongful conduct, thus additional damages are required to motivate the defendant to rectify their behavior and prevent future harm. Punitive damages are available in cases where the defendant's negligence rises to a higher level, such as willful and wanton negligence, which exceeds ordinary negligence. It's important to note that there are constitutional limits to the award of punitive damages.
A defendant facing a negligence lawsuit can assert three fundamental affirmative defenses. An affirmative defense is one where the defendant essentially acknowledges that the four elements of negligence are present but argues that they are not liable for the tort. The first defense is assumption of risk. If the plaintiff knowingly and voluntarily assumes the risk associated with engaging in a hazardous activity, the defendant may not be held responsible for injuries sustained. For instance, if an individual chooses to go bungee jumping, they assume the inherent risks, such as the possibility of burst blood vessels in the eye, back and neck soreness, or twisted ankles. These injuries are not compensable because the risks are inherent to the activity and are knowingly accepted by the participant. However, it's essential to recognize that individuals can only assume risks that they are aware of. In the context of bungee jumping, one of the initial steps typically involves the operator weighing the jumper to adjust the length of the bungee rope properly. If this process is negligently carried out, resulting in the jumper overshooting or undershooting the expected landing point, it becomes an unknown risk that cannot be assumed by the participant.
Another related doctrine in negligence law is the open and obvious doctrine, which is employed as a defense in cases involving injuries sustained by individuals while on someone else's property. For instance, if there is a spill on the floor of a store and the store owner has posted a sign that reads "Caution—Wet Floor," yet an individual chooses to run through the spill and subsequently slips and falls, that person would likely lose a negligence lawsuit because the spill was open and obvious. The use of the open and obvious doctrine can vary significantly from state to state, with some states permitting its application in a wide range of premises liability cases, while others limit its usefulness.
Both the assumption of risk and open and obvious defenses are typically unavailable to a defendant who initially created a dangerous situation. For example, if you negligently start a house fire while playing with matches and evacuate the house with your roommates, and one of your roommates decides to reenter the burning house to rescue someone else, you cannot rely on the assumption of risk defense since you initiated the fire.
The second defense in negligence is to allege that the plaintiff's own negligence contributed to their injuries. In states that follow the contributory negligence rule, any level of the plaintiff's own negligence, no matter how minor, completely bars them from recovering any damages. This is a relatively strict rule, so many states have adopted the comparative negligence rule instead. Under this rule, the jury is tasked with determining the extent to which the plaintiff is at fault, and the plaintiff's total recovery is then reduced by that percentage. For example, if you jaywalk across a street during a heavy thunderstorm and are struck by a speeding car, a jury might find you to be 20 percent at fault for your injuries. If the jury determines that your total compensatory damage award is $1 million, the award would be reduced by $200,000 to account for your own negligence.
In certain situations, the Good Samaritan law may serve as a defense in a negligence lawsuit. Good Samaritan statutes are enacted to encourage bystanders at accident scenes to provide first aid or other assistance without fear of legal repercussions. These statutes differ significantly from state to state, but most commonly grant immunity from liability for negligent acts that occur while an individual is rendering emergency medical aid. However, it's essential to note that Good Samaritan laws are usually limited to laypersons, meaning that police, emergency medical service providers, and other first responders can still be held liable for negligence. Additionally, these laws often pertain primarily to medical actions performed in good faith in emergency situations.
The duty of care owed by a private investigator to potential victims of crime is a complex legal issue. In the case of Remsburg v. Docusearch, Inc. (816 A.2d 1001, 2003), the court held that the investigative firm owed a duty of care to a third party who became the victim of a crime committed by the investigator's client. The court found that the investigative firm had a duty because the risk of harm to the third party was foreseeable. This case suggests that private investigators may be held liable if the information they provide is used to commit a crime, and the harm to the victim was foreseeable.
Regarding the Benihana case, whether the restaurant should be liable for the man's death is a complex legal question. It would depend on whether the actions of the chef in throwing food at diners were deemed to be negligent and the proximate cause of the man's injury and subsequent death. Proximate cause can be challenging to establish, and it would require a thorough examination of the specific facts and circumstances of the case.
Cities that own and operate public transportation systems generally owe a duty of care to the paying and traveling public. This duty includes providing safe and reliable transportation services. In the case of Shaun Mills, who was hit by a car after disembarking from a public bus, the bus company may have defenses available, such as arguing that the accident occurred after Mills had left their custody and control. They may also argue that Mills was responsible for his own safety when crossing the street.
Balancing the interests of medical malpractice victims and the medical profession is a complex issue. One way to address this balance is through tort reform, which may include caps on damages and stricter criteria for filing medical malpractice lawsuits. Additionally, promoting alternative dispute resolution methods, such as arbitration and mediation, can help resolve medical malpractice claims more efficiently and reduce the burden of litigation. It's important to strike a balance that ensures victims have recourse while minimizing the fear of medical malpractice suits that could lead to defensive medicine and increased healthcare costs. Finding the right balance is a matter of ongoing debate and legislative action.
7.3.3 Strict Liability
Strict liability is a legal concept that holds a party, typically a manufacturer or seller, responsible for damages or injuries caused by a product, even if the party was not negligent or at fault in producing or selling the product. In other words, strict liability means that the manufacturer or seller can be held liable for harm caused by their product regardless of their level of care or responsibility in the design, manufacturing, or marketing of the product.
Strict liability typically applies in product liability cases, where consumers have been injured or suffered damages due to a defective or unreasonably dangerous product. This legal doctrine is used to ensure that consumers are protected from dangerous products, and it shifts the burden of proof from the injured party (plaintiff) to the manufacturer or seller (defendant).
In general, strict liability applies when the following conditions are met:
The Product: The product must be in a defective or unreasonably dangerous condition, which can be attributed to its design, manufacturing, or marketing.
Defective Product: The defect or dangerous condition of the product existed at the time it left the control of the manufacturer or seller.
No Alteration: The product must not have been altered or modified by the plaintiff or a third party, which caused the defect or dangerous condition.
Strict liability is often applied to three main types of product defects:
Manufacturing Defects: These defects occur during the manufacturing or assembly process, leading to a product that is different from others in the same product line. In such cases, the manufacturer can be held strictly liable for any resulting injuries.
Design Defects: These defects are inherent in the product's design, affecting all units produced according to that design. In this case, the manufacturer or designer can be held strictly liable for injuries caused by the product.
Marketing Defects: Marketing defects refer to issues related to how the product is marketed or presented to consumers, such as inadequate warnings or insufficient instructions. Manufacturers and sellers can be held strictly liable if they fail to provide adequate warnings or instructions for the safe use of the product.
In product liability cases involving strict liability, product warnings and labels play a crucial role. Manufacturers and sellers are responsible for providing clear and comprehensive warnings about the potential risks and dangers associated with their products. Failing to do so can lead to liability under the strict liability doctrine.
Defenses to strict product liability may include:
Assumption of Risk: If the plaintiff knew of the product's risks and chose to use it anyway, they may be considered to have assumed the risk, which could limit or eliminate the defendant's liability.
Product Misuse: If the plaintiff used the product in a way that it was not intended or recommended for, and this misuse caused the injury, the defendant may use this as a defense.
Contributory or Comparative Negligence: If the plaintiff's own negligence contributed to their injury, this can be a defense, especially in states that follow a contributory or comparative negligence system.
Statute of Limitations: If the plaintiff files a lawsuit after the applicable statute of limitations has expired, this can serve as a defense.
Lack of Causation: The defendant may argue that the product defect was not the cause of the plaintiff's injury.
It's important to note that the availability and success of these defenses may vary by jurisdiction and the specific circumstances of each case.
Intentional torts require a certain level of intent to commit the wrongful act, such as the intent to harm or injure someone. Negligence torts, on the other hand, do not require intent but involve a degree of carelessness or neglect in one's actions. Strict liability torts, in contrast, do not hinge on either intent or carelessness. In cases where strict liability applies, it is irrelevant how carefully or carelessly the defendant acted; the defendant is held liable for any resulting harm.
Strict liability is applied in only a few specific circumstances, with one of those being when the defendant is engaged in an ultrahazardous activity. An ultrahazardous activity is one that is inherently dangerous and poses a significant risk to human life if anything goes wrong. Individuals or entities conducting ultrahazardous activities are held strictly liable for any resulting harm. Examples of ultrahazardous activities include transporting dangerous chemicals or nuclear waste, where a spill can lead to substantial harm to people and property. Similarly, businesses using explosives, like demolition crews, face the risk that, even with the utmost care, the intentional ignition of explosives can cause harm to individuals or property, justifying the application of strict liability.
Strict liability also comes into play when restaurants, bars, and taverns serve alcohol to minors or visibly intoxicated individuals. This activity is considered dangerous, and there is a high probability that patrons who drive under the influence will pose a risk to others. Many states have enacted dram shop acts that impose strict liability in this specific circumstance, holding establishments accountable for the harm caused by individuals they have served alcohol to.
Strict liability torts may seem puzzling when defendants are acting reasonably or being extremely cautious. The rationale behind strict liability torts lies in social policy considerations. These torts exist because businesses engaging in certain covered activities, such as transporting hazardous chemicals or running bars, profit from these activities and are in the best position to take every precaution to prevent unexpected events that could have catastrophic consequences. Victims of such events are often innocent members of the public who lack the ability to avoid harm. Strict liability ensures that they have a legal remedy, regardless of whether the defendant exercised prudence.
Strict liability is particularly evident in the area of strict product liability. Under this doctrine, any retailer, wholesaler, or manufacturer selling an unreasonably dangerous product can be held strictly liable. For example, when Toyota disclosed manufacturing and selling vehicle models with faulty accelerators that led to unintended acceleration and deaths, the defective accelerators were considered unreasonably dangerous. In this case, the manufacturer (Toyota Japan), the wholesaler or importer (Toyota's U.S. sales company), and the retailer (local dealers) are all subject to strict liability for injuries caused by the faulty accelerators. However, it's important to note that strict liability applies only to commercial sellers, so a private individual selling their Toyota on Craigslist would not be strictly liable for selling an unreasonably dangerous product.
To establish that a product is unreasonably dangerous, plaintiffs have two primary theories available to them. First, they can allege that the product was defective due to a flaw in the manufacturing process. Under this theory, most products are manufactured without any issues, but a few samples or a batch may turn out defective due to a production defect. If these defective products are sold to the public, the manufacturer or seller is held strictly liable. For instance, if a light bulb factory produces a million safe light bulbs but one bulb exploded when turned on due to a production defect, the manufacturer is strictly liable for the resulting injuries. Similarly, if a frozen pizza factory produces thousands of uncontaminated pizzas but one contains foreign contaminants due to a production defect like an inattentive worker or machine breakdown, the factory is strictly liable for any injuries caused.
The second way a product may be considered defective is due to a design defect. In this scenario, the issue does not lie in the manufacturing or production of the product, but rather in the product's design itself, which makes it unreasonably dangerous. Engineers constantly strive to design products that are as safe as possible, but in some cases, a product may still be inherently dangerous, and the manufacturer or seller can be held strictly liable.
For instance, consider a situation involving Boeing 737 jetliners in 1991 that experienced unexpected movement in the rudder, leading to several high-profile crashes, including a USAir flight in Pittsburgh that resulted in the tragic deaths of 132 people. During the investigation, it was discovered that a part responsible for controlling the rudder would become extremely cold during flight, and when hot hydraulic fluid was injected into it, the part could jam and move the rudder in the opposite direction of what the pilot intended. This design defect posed a significant safety risk and was subsequently addressed by upgrading the rudder control systems on all existing Boeing 737s worldwide to rectify the problem.
Tire Problems
In 1999, Ford customers in the Middle East began encountering tread separation issues with Ford Explorer SUVs. These problems resulted in tire disintegration, leading to loss of control and, often, rollover accidents. Initially, Ford believed that the problem was limited to the Middle East due to unique characteristics of the region, such as extremely hot weather, lower tire inflation pressures for driving in sandy conditions, and challenging operating environments. However, vehicles in the United States, particularly in hotter regions, started experiencing similar problems. The toll from these accidents climbed to over 170 deaths and more than 700 injuries.
Ford's investigation pointed to certain fifteen-inch tires manufactured by Firestone as the likely cause of the issues. Virtually all the accidents involved Firestone tires produced in a single plant in Decatur, Illinois, which has since closed. Comparable vehicles equipped with Goodyear tires rarely experienced tread separation problems. However, Firestone contended that the fault lay with the design of the Ford Explorer, which they considered to be defective. Firestone argued that the Explorer lacked essential safety features to lower the center of gravity, reduce the risk of rollovers, and mitigate the chances of tire underinflation. Firestone also highlighted that the same tires did not face any issues when installed on General Motors (GM) vehicles.
In this case, both companies, Firestone and Ford, were held strictly liable. Ford spent over $3 billion on recalling the tires and severed its century-long partnership with Firestone. In response to this widespread issue, Congress passed a federal law mandating that all vehicles be equipped with tire pressure monitoring systems to enhance safety and prevent similar accidents in the future.
Many product liability cases revolve around the defective design theory, as courts consider warning labels on products and accompanying literature as integral components of a product's design. When a product carries the potential for danger when used in a particular way, it is essential to include warning labels or cautions to inform consumers about the associated risks. Manufacturers are obligated to provide warnings for a wide range of potential hazards linked to their products, as long as these risks are foreseeable. If misuse by consumers is foreseeable, manufacturers must also warn against that misuse. Consequently, products like window blinds come with warnings about the choking hazards posed by the cord used for raising and lowering them, and hair dryers come with warnings about using them in bathtubs and showers.
While some warnings may seem excessive, they are crucial because products can cause harm or even fatalities when they are not used correctly. For instance, in a case involving a low-speed collision in a parking lot, a woman in the passenger seat of a GM SUV was tragically killed when the airbags deployed. Her seat was reclined, causing her to slide underneath the seat belt and into the deploying airbag. GM argued that seats and seatbelts are effective only when the seat is in an upright position, and the owner's manual warned against reclining the seat while the vehicle was in motion. However, the woman's family successfully argued that the warning was not clear and conspicuous enough, and as a result, many people traveled with their seats reclined.
In this context, the question of whether the absence of a clear and conspicuous warning about the danger of traveling with the seat reclined makes a vehicle's design defective is subjective. It depends on the specific circumstances of the case and the extent to which the warning is deemed adequate and effective in conveying the associated risks to consumers. Courts typically assess whether the warning was reasonable and whether it adequately informed consumers about potential dangers. If a court determines that the warning was insufficient, it may find that the product's design is indeed defective.
Labeling Mistakes with Medication
The case involving actor Dennis Quaid and his wife Kimberly is a compelling example of a product liability lawsuit based on a design defect. In November 2007, their newborn twins were born at Cedars-Sinai Medical Center, and the infants suffered a staph infection. To prevent blood clots, doctors prescribed the blood thinner Heparin. This medication is available in two doses, with the higher dose being nearly a thousand times more potent than the lower one. Unfortunately, both doses came in similar packaging with blue labels, which led to a grave mistake by nurses who administered the higher dose to the infants, putting their lives in jeopardy.
The Quaids have brought a lawsuit against the manufacturer, Baxter Healthcare, asserting that the labels on the drug represent a design defect. They argue that the packaging and labeling of the drug make it too easy to confuse the two doses, leading to a risk of severe harm. Their case highlights the critical issue of product design in the context of product liability law. The argument is that the design of the product – in this case, the packaging and labeling – makes it unreasonably dangerous, as it can lead to life-threatening errors.
As a result of this incident and similar cases, Baxter Healthcare has modified the design of the product by incorporating a red warning label that must be removed before the drug can be used. This change in design serves to reduce the risk of confusion and errors, addressing the alleged design defect. The outcome of the Quaid's lawsuit may hinge on whether the court deems the previous design as unreasonably dangerous, and if so, whether the revised design sufficiently addresses the safety concerns.
In strict product liability cases, several defenses are available to the defendant. Since strict product liability imposes liability regardless of the plaintiff's negligence, defenses related to the plaintiff's conduct, such as contributory or comparative negligence, are not applicable. However, the following defenses may be asserted:
Assumption of Risk: Similar to the defense used in negligence cases, assumption of risk is a potential defense in strict product liability. To assert this defense, the user must have known about the risk associated with the product's use and voluntarily accepted that risk. For example, if someone knowingly uses a sharp knife to cut vegetables and is subsequently injured, they may not have grounds to sue the knife manufacturer. However, if the knife blade unexpectedly detaches due to a design or production defect, assumption of risk may not apply because the user would not have anticipated that specific risk.
Product Misuse: If the consumer misuses the product in an unforeseeable manner, it can serve as a defense against strict product liability. An unforeseeable misuse occurs when the manufacturer could not reasonably have anticipated that the product would be used in such a way. For instance, modifying a lawn mower to function as a go-kart constitutes product misuse. Manufacturers are still responsible for foreseeable misuses, and they are required to provide warnings regarding such uses.
Commonly Known Danger Doctrine: This defense comes into play when the manufacturer can convince a jury that the plaintiff's injury resulted from a commonly known danger. If the danger associated with the product is widely recognized and understood, and the plaintiff's injury arises from that well-known danger, the defendant may avoid liability.
These defenses provide manufacturers with avenues to challenge claims of strict product liability, particularly when they can demonstrate that the plaintiff's actions or the nature of the product use falls within the scope of these defenses. However, the effectiveness of these defenses can vary depending on the specific circumstances of each case and the laws in the jurisdiction where the lawsuit is filed.
1. Tobacco Products:
The tobacco industry's historical actions in downplaying the risks associated with smoking are well-documented. However, the legal landscape has evolved since the mid-20th century. Plaintiffs who were exposed to tobacco advertising during that era may face significant challenges when seeking compensation through strict product liability claims, as many factors, including changes in public awareness, health warnings, and legislative actions, have since shaped the understanding of the risks associated with tobacco. Courts often consider the current state of knowledge and the legal context when evaluating claims. As such, older plaintiffs seeking compensation for smoking-related health issues may face hurdles, but it ultimately depends on the specific facts and laws of each case.
2. Fast Food and Restaurant Food:
The question of whether fast food or restaurant food is an unreasonably dangerous product is a matter of debate. While many experts and health professionals argue that excessive consumption of such foods can lead to health problems, product liability claims in this context are typically more challenging. Unlike products with inherent risks (e.g., defective machinery), food products are meant to be consumed, and the effects of diet-related health issues often result from long-term choices made by consumers.
Requiring the food industry to make their products less dangerous or to provide warnings about overconsumption raises complex policy questions. It involves a trade-off between personal responsibility and corporate accountability. Legislation, such as the Personal Responsibility in Food Consumption Act, is one way to address these concerns, but its implications and potential consequences should be carefully considered.
3. McDonald's Coffee Case:
The famous McDonald's coffee case involving Stella Liebeck raises the issue of product liability and what constitutes an unreasonably dangerous product. While coffee itself is not inherently dangerous, the excessive temperature at which McDonald's served its coffee was a critical factor. The fact that the coffee was served at a temperature that could cause third-degree burns within seconds was a legitimate safety concern.
The jury's punitive damages award in this case, initially amounting to millions of dollars, sparked considerable debate. The amount was eventually reduced on appeal. Nevertheless, this case highlighted the need for businesses to ensure the safety of their products, even common ones like coffee.
In sum, determining what constitutes an unreasonably dangerous product and how to address related issues in the legal and regulatory framework is a complex process that requires considering evolving societal norms, scientific knowledge, and legal principles. These cases serve as examples of how product liability law evolves over time to address changing expectations and understandings.
Tort law is a dynamic and ever-evolving field that responds to changing societal values and the need to safeguard individual freedoms and interests. While it has stood the test of time, recent discussions have introduced a political dimension to its viability. For instance, the Republican Party's platform argues that the influence of tort trial lawyers poses a significant threat to America's global competitiveness, limits access to the quality of justice deserved by the citizens, and places small businesses perilously close to bankruptcy. This perspective underscores the view held by many businesses that tort lawsuits are, at best, an unwelcome disruption and, at worst, financially ruinous. They advocate for the eradication of such lawsuits altogether.
In contrast, consumer rights activists, often supported by plaintiff lawyer groups, contend that tort lawsuits represent a crucial mechanism for holding corporations accountable and preventing them from prioritizing profits over safety. This ongoing debate has prompted numerous proposals for tort reform at both the state and federal levels.
Tort reform initiatives manifest in various forms. One common approach involves the imposition of a statute of repose on product liability claims, akin to a statute of limitations. These statutes restrict plaintiffs from pursuing tort claims after a specified time has elapsed. An example of this is the 1994 General Aviation Revitalization Act signed by President Clinton, which established an eighteen-year statute of repose for product liability claims against manufacturers of general aviation aircraft, such as Cessna and Piper. This legislation enabled these manufacturers to reintroduce new light aircraft production in the United States.
Another prevalent tort reform tactic is the imposition of a cap on punitive damages. For instance, President George W. Bush advocated for a nationwide punitive damage cap of $250,000 for medical malpractice claims, although such a law was not enacted by Congress. Additional reform proposals call for the elimination of defective design as a basis for legal recourse, the prohibition of claims if a product has been altered by the consumer in any manner, and the inclusion of the state-of-the-art defense, which asserts that if a product adhered to the prevailing industry standards at the time of production, it should not be subject to strict liability claims.
Contracts Chapter 6:
A contract is a legally binding agreement between two or more parties that outlines their rights and obligations. It establishes the terms and conditions under which the parties agree to perform or refrain from certain actions, and it is enforceable by law.
Here are the key aspects of contracts:
Formation of a Contract:
Offer: One party (the offeror) makes a specific proposal to the other party (the offeree).
Acceptance: The offeree agrees to the terms of the offer, creating mutual assent or a meeting of the minds.
Consideration: The contract must involve something of value exchanged between the parties, such as money, goods, or services.
Legal Capacity: Both parties must have the legal capacity to enter into a contract, which generally means they must be of sound mind and of legal age.
Legal Purpose: The contract's purpose must be legal and not involve any unlawful activities.
Common Law vs. UCC:
Common Law: Common law governs contracts for services, real estate, employment, and other non-sale transactions. Common law principles are often used to fill in gaps in contracts or determine the intention of the parties.
UCC (Uniform Commercial Code): The UCC primarily governs contracts for the sale of goods. It provides a standardized set of rules for sales contracts, including warranties, delivery, and payment terms. The UCC has been adopted in some form by all U.S. states.
Defenses to Performance of a Contract:
Lack of Capacity: If a party lacked the legal capacity to enter into the contract, it may be voided.
Duress: If a party was coerced or threatened into the contract, it may be voidable.
Fraud or Misrepresentation: If one party provided false information that induced the other party to enter the contract, it may be voidable.
Mistake: A mutual mistake about a material fact may invalidate the contract.
Illegality: If the contract's purpose is illegal or against public policy, it is void.
Breach of Contract:
A breach of contract occurs when one party fails to fulfill their obligations as outlined in the contract. It can be a failure to perform on time, perform as agreed, or perform at all.
Consequences of Breach:
When a breach occurs, the non-breaching party can seek legal remedies, such as damages to compensate for the losses suffered due to the breach.
Remedies for Breach of Contract:
Specific Performance: A court order requiring the breaching party to fulfill their contractual obligations, usually used for unique items or services.
Damages: The non-breaching party may seek monetary compensation for their losses.
Rescission: The contract is canceled, and both parties are returned to their pre-contract positions.
Restitution: The non-breaching party is compensated for any benefits they conferred upon the breaching party.
Liquidated Damages: A predetermined sum specified in the contract to be paid in case of breach.
Common Contract Clauses:
Expediency: "Time is of the essence" clause, setting specific deadlines.
Limiting Liability: "Limitation of Liability" clause, capping damages in case of breach.
Restricting Assignment: "No Assignment" clause, preventing one party from transferring their obligations to another without consent.
Contracts are a fundamental part of business and personal interactions, and understanding their formation, enforcement, and potential defenses is crucial to conducting legal and ethical transactions.
Clint Eastwood and Sondra Locke shared a significant and enduring relationship, both personally and professionally. Unfortunately, this relationship eventually soured and concluded amid a contentious atmosphere. While the couple never formalized their union through marriage, they cohabited for an extended period and collaborated on numerous projects. When their association unraveled, Locke initiated a lawsuit against Eastwood, citing various legal grounds.
In an attempt to resolve the legal dispute, Eastwood extended an offer to Locke. As part of this proposal, he suggested that if Locke dropped her lawsuit against him, he would facilitate a development deal for her with Warner Bros. Inc. Notably, Locke, in addition to her acting career, had also ventured into directing. Presumably viewing this opportunity as a means to advance her professional pursuits while potentially ameliorating long-standing personal conflicts, Locke accepted Eastwood's offer. Subsequently, Locke entered into a settlement agreement with Eastwood, and as promised, she concurrently entered into an agreement with Warner Bros.
The agreement with Warner Bros. entailed two primary components. Firstly, Locke was obligated to submit her project proposals to Warner Bros. for consideration before offering them elsewhere. The agreement stipulated that Warner Bros. would have a period of thirty days to either accept or reject these submissions. In return for this aspect of the contract, Locke was entitled to receive $250,000 annually for a three-year term. Secondly, the contract constituted a "pay or play" deal, amounting to $750,000, wherein Warner Bros. retained the choice to utilize Locke's directorial services or compensate her.
What Locke was unaware of at the time was that Eastwood had agreed to reimburse Warner Bros. for the expenses of the contract if Locke failed to achieve success in developing her projects or securing directorial roles with the studio. Warner Bros. did remit the stipulated $1.5 million as per the contract's terms. However, the studio did not embark on the production of any of Locke's thirty proposed projects, nor did they engage her as a director for any film.
Locke contended that the entire agreement had been a ruse orchestrated by Warner Bros., as she believed the studio had never genuinely intended to collaborate with her on film projects. She also alleged that Warner Bros.' sole motivation for entering into the contract was to assist Eastwood in resolving her prior legal claims against him. Locke initiated a lawsuit against Warner Bros., citing a range of claims, including breach of the implied covenant of good faith and fair dealing, and fraud. She asserted that the studio's actions had deprived her of the benefits she anticipated from the agreement, alleging that Warner Bros. had no authentic intent to honor their commitment to her.
Following a trial, Warner Bros. emerged victorious, prompting Locke to appeal the decision.
The case of Locke v. Warner Bros. Inc. highlights the complexity of contract law and the role of good faith in contractual relationships. While Locke did receive the monetary compensation specified in the contract, the court's decision underscores that contracts are not merely about the exchange of money but also the fulfillment of the broader expectations and intentions of the parties involved.
In this case, the court found that Warner Bros. had not acted in good faith by refusing to genuinely consider Locke's proposals, which was a key element of the contract. While creative decisions are generally not subject to judicial review, a party's bad faith actions in refusing to fulfill their obligations can be a valid matter for legal intervention.
The court's decision acknowledges that a lack of good faith can undermine the integrity of a contract, even if it appears, on the surface, to have been performed. Contracts are not just about compliance with the letter of the agreement but also about the spirit and intent behind them. In cases where one party acts in bad faith, it can lead to damages and legal consequences.
The settlement between the parties, following the court's decision, suggests that both parties found it advantageous to resolve their dispute outside of court. This often happens when the costs, uncertainties, and potential reputational damage associated with protracted litigation outweigh the benefits of pursuing a court judgment.
In a broader context, the case serves as a reminder that ethical considerations are intertwined with contractual relationships. While contracts are legally binding, they also reflect the moral obligations and good faith intentions of the parties involved. Ethical behavior and integrity in contractual dealings are essential for fostering trust and maintaining positive long-term business relationships.
Your example of mowing an elderly neighbor's lawn is a good analogy. While such a promise may not be legally binding, it does carry ethical weight. Breaking such a promise can lead to feelings of guilt and damage the trust between individuals. In the business world, similar principles of trust and ethical behavior underpin contractual relationships, and acting in good faith is crucial to upholding the spirit of the agreements made.
When a promise holds legal enforceability, the ramifications of breaking it extend beyond mere feelings of guilt. Such breaches of legally binding promises can lead to the aggrieved party seeking compensation for their losses. In contractual contexts, this typically entails the party in violation of the contract providing restitution to make the injured party whole once more. However, the ethical implications of breaching a legally enforceable promise, or contract, remain a subject of debate. For example, a company might choose to breach a contract if it calculates that paying damages is more cost-effective than fulfilling its contractual obligations, a decision based on rational economic assessment. Yet, others argue against this approach, emphasizing that maintaining the integrity of promises is crucial for business stability, irrespective of whether honoring the promise makes economic sense.
If I were operating a business, whether I would breach a contract to save money would depend on the specific circumstances. I would consider the financial implications, the potential damage to the business's reputation, and the impact on long-term relationships with clients or partners. In some cases, it might be a pragmatic decision to breach a contract, but I would also prioritize ethical considerations and strive to find alternative solutions that uphold the integrity of my commitments.
Contracts essentially represent agreements between two or more parties, forming a type of private law where the agreed-upon terms are binding on the involved parties but not on the general public. Contracts signify a mutual consensus on a negotiated exchange between the parties.
In the United States, parties have considerable freedom to enter into contracts based on their mutual agreement and under terms they see fit. This implies that parties can consent to contracts even if the terms are unfavorable. Nonetheless, certain external constraints may affect the formation of contracts, and there may be internal limitations within the contract that affect the parties' rights and their capacity to engage in other contractual arrangements.
Legal restrictions external to the contract place limitations on our ability to negotiate terms. For instance, attempting to engage someone to work for your company with a contract specifying one-hundred-hour workweeks at a rate of twenty-five cents per hour would be prohibited. Even if both parties willingly accepted such conditions, statutory and regulatory laws prevent the formation of a contract with terms that infringe upon minimum wage laws.
Furthermore, there can be constraints internal to the contract itself. Consider this scenario: You've entered into an employment agreement with a company, committing to work for $55,000 per year, along with benefits, for a duration of two years. Initially, this might seem favorable. However, if, a month later, another company presents you with a similar job offer paying $65,000 per year, along with benefits, it doesn't automatically invalidate your initial contract. In such cases, your initial contract might likely include a noncompete clause, preventing you from working in a similar capacity for a specified duration and within a defined geographic area. Even if you considered breaching your first contract to accept the second offer, the non compete clause would prohibit you from doing so.
Legal restrictions external to the contract place limitations on our ability to negotiate terms. For instance, attempting to engage someone to work for your company with a contract specifying one-hundred-hour workweeks at a rate of twenty-five cents per hour would be prohibited. Even if both parties willingly accepted such conditions, statutory and regulatory laws prevent the formation of a contract with terms that infringe upon minimum wage laws.
Furthermore, there can be constraints internal to the contract itself. Consider this scenario: You've entered into an employment agreement with a company, committing to work for $55,000 per year, along with benefits, for a duration of two years. Initially, this might seem favorable. However, if, a month later, another company presents you with a similar job offer paying $65,000 per year, along with benefits, it doesn't automatically invalidate your initial contract. In such cases, your initial contract might likely include a noncompete clause, preventing you from working in a similar capacity for a specified duration and within a defined geographic area. Even if you considered breaching your first contract to accept the second offer, the non compete clause would prohibit you from doing so.
6.1.1 Formation
The Uniform Commercial Code (UCC) and common law are two distinct legal frameworks that govern contracts in the United States. The choice between the UCC and common law depends on the nature of the transaction and the parties involved. Here's an overview of when each is typically applied:
1. Uniform Commercial Code (UCC):
The UCC is a set of standardized laws that govern commercial transactions, including the sale of goods and certain aspects of commercial contracts. It is adopted in some form by all U.S. states. The UCC is generally applied when:
The contract involves the sale of goods: The UCC primarily applies to contracts for the sale of movable and tangible goods. It does not apply to real estate transactions or services, which are typically governed by common law.
The parties are merchants: If both parties to a contract are considered "merchants" (i.e., they are experienced and knowledgeable in the relevant trade or business), the UCC rules often apply.
2. Common Law:
Common law, on the other hand, is a system of legal principles developed by court decisions and precedent. It applies to a wide range of contractual arrangements, including services, real estate, and other transactions. Common law is typically applied when:
The contract doesn't involve the sale of goods: Common law governs contracts that pertain to services, real property (real estate), intellectual property, and other non-sale-of-goods transactions.
The contract doesn't fall within the scope of the UCC: If a contract doesn't meet the criteria for UCC applicability (e.g., it's a real estate transaction or doesn't involve goods), common law rules and principles are used to resolve disputes.
Now, let's discuss the elements of common-law contracts:
Elements of Common-Law Contracts:
Common-law contracts typically consist of the following key elements:
Offer and Acceptance: One party (the offeror) must make a clear and unequivocal offer, and the other party (the offeree) must accept the offer.
Consideration: There must be something of value exchanged between the parties as part of the agreement. This can be money, goods, services, or a promise to do or not do something.
Intention to Create Legal Relations: Both parties must intend for the contract to have legal consequences. Social or domestic agreements usually lack this intention.
Legal Capacity: Both parties must have the legal capacity to enter into the contract. This means they are of sound mind and are of the appropriate age.
Legality: The purpose of the contract must be legal and not violate any laws or public policy.
Certainty and Possibility of Performance: The terms of the contract must be clear and specific, and it must be possible to perform the contract.
Now, let's identify the difference between common-law contracts and contracts between merchants:
Common-Law Contracts vs. Contracts Between Merchants:
Application of Rules: Common-law contracts are governed by the general principles of contract law developed through court decisions and precedent. Contracts between merchants, under the UCC, have specific rules and provisions tailored for commercial transactions.
Terms and Standardization: Common-law contracts often have more flexibility in terms and are open to negotiation, while contracts between merchants often rely on standardized UCC terms.
Good Faith: The UCC imposes a higher standard of good faith in contracts between merchants, emphasizing the need for honesty and fair dealing.
Custom and Usage: Contracts between merchants often consider trade customs and usage of trade as part of the agreement, while common-law contracts may not.
Statute of Frauds: Both types of contracts may be subject to the Statute of Frauds, but the requirements may differ slightly between the UCC and common law.
In summary, the choice between the UCC and common law depends on the nature of the transaction and the parties involved, with the UCC typically applying to sales of goods and contracts between merchants, while common law applies to a broader range of contractual arrangements.
A contract constitutes a legally enforceable promise, making it essential to distinguish between promises that are legally enforceable and those that are not. Throughout your life, you have likely made numerous promises and, on occasion, failed to fulfill them. For instance, if you promised your best friend that you would be best friends forever, and your relationship subsequently changed, we might consider that promise broken. However, you wouldn't be held legally responsible for damages in this scenario. In contrast, if you pledged to your bank that you would make scheduled payments in exchange for the loan it provided for purchasing a car, and you failed to meet those commitments, you would have broken a legally enforceable promise. In this case, the bank could seek damages to recover its losses. What sets these two promises apart, and why would you be obligated to pay damages to the bank but not to your former best friend? In essence, one is considered a breach of contract, while the other is regarded as a simple broken promise.
This section delves into the formation of contracts, focusing on the elements that determine whether a contract is valid or whether it suffers from deficiencies that render it legally unenforceable.
In the United States, contracts are governed by two primary legal frameworks: common law and the Uniform Commercial Code (UCC). The UCC, specifically Article 2, pertains to contracts between merchants and the sale of goods. The UCC essentially comprises two sets of rules for contracts: one set of rules applicable to all parties and another set specific to merchants. Within this section, we will explore the UCC's application to merchant contracts, with a particular emphasis on how the UCC's requirements differ from those under common law in the context of contract formation.
Now, let's delve deeper into common-law contracts. Common law serves as the governing framework for contracts pertaining to services and those not specifically regulated by the UCC. Understanding the elements of common-law contract formation is crucial because these requirements are more rigorous than those governing formation between merchants under the UCC. Failure to establish all the elements of common-law contract formation can render the contract void or voidable.
Common-law contract formation involves several key elements: offer, acceptance, and consideration. The coming together of offer and acceptance represents mutual assent. Moreover, for a contract to be legally enforceable, it must serve a lawful purpose, and the involved parties must possess the capacity to enter into the contract.
An offer extends the power of acceptance to another party and comprises the fundamental elements of the agreement, which must be precise and definite. For instance, if an offeror states, "I offer to sell you my scooter for four hundred dollars," this offer is valid. It encompasses the price, the recipient of the offer, and the subject of the offer (i.e., the scooter). This offer grants you, the offeree, the authority to accept it.
Crucially, in common-law contracts, acceptance must precisely mirror the offer to be considered valid. This means that the acceptance must be an exact replica of the offer itself. Any deviation from this mirror image principle will render the acceptance insufficient and fail to fulfill the essential criteria for contract formation.
For acceptance to be valid, the offeree could respond by stating, "I agree to purchase your scooter for four hundred dollars." If, however, a counteroffer is presented, it will not constitute acceptance because a counteroffer deviates from the identical terms of the initial offer. For instance, if the offeree proposed, "I agree to buy your scooter for three hundred dollars," it would not be accepted as it constitutes a counteroffer, effectively rejecting the original offer. Consequently, the offeror is no longer bound to sell the scooter, even if the offeree later changes their mind and agrees to pay the initial four hundred dollars.
Similarly, if the offeror revokes an offer before the offeree's acceptance, the power of acceptance is withdrawn through the revocation. The offeror would no longer be obligated to sell the originally offered item. If the offeror wishes to impose a time limit on the offer's validity, they can do so by specifying a deadline for acceptance. If the offer is not accepted within the stipulated timeframe, the offeror is not obligated to honor any subsequent acceptances received after the offer's expiration.
Now, let's consider a scenario where you come across an advertisement for a scooter for sale at a local shop. The advertisement might resemble the following:
Do you believe that this advertisement should empower you, as a prospective customer, to make a binding commitment? In reality, an advertisement does not constitute an offer; it serves as an invitation to negotiate. Advertisements essentially request people to submit their offers. This places the power of acceptance in the hands of the merchant, who is free to either reject offers or choose the customers with whom they wish to enter into a contract.
However, it's important to note that certain statutory protections are in place to safeguard consumers against unscrupulous merchants who might engage in unethical practices, such as bait-and-switch tactics, false advertising, or discriminatory denials of services or contracts based on factors like race. In these cases, consumer protection statutes and civil rights statutes provide safeguards to protect consumers.
If an offer is indeed valid, as previously discussed, the acceptance must be a mirror image of the offer. A bilateral contract, as exemplified earlier, is one in which both parties make promises. The earlier example illustrates a bilateral contract—a promise for a promise:
The offeror states, "I offer to sell you my scooter for five hundred dollars."
The offeree responds, "I agree to buy your scooter for five hundred dollars."
In essence, this constitutes a promise to sell the scooter in exchange for a promise to buy the scooter for four hundred dollars. Since it involves a promise from both parties, it qualifies as a bilateral contract.
A unilateral contract is one in which the accepting party can only signify their acceptance through an action. Let's illustrate this with an example:
The offeror declares, "I will sell this scooter to the first person who puts four hundred dollars cash in my hands."
The offeree remains silent but proceeds to place four hundred dollars cash into the offeror's hands.
In this scenario, it represents a promise in exchange for an action. Specifically, it is a commitment to sell the scooter, contingent on the action of handing over four hundred dollars in cash to the offeror.
Common-law contracts can take the form of either bilateral or unilateral agreements.
Furthermore, for a common-law contract to be valid, it must encompass valid consideration. This means that there must be a mutually agreed-upon exchange of acts or promises, and both parties must incur new legal obligations or detriments as a result of the contract. To illustrate, consider a scenario where you've accepted a new job with a company, having successfully negotiated the terms of your employment contract prior to commencement. All terms of the contract are legally sound, and both parties are bound by the contract. In essence, this signifies your commitment to work for a defined period, and your employer's commitment to compensate you with a specified salary and benefits in return for your services. Everything appears to be proceeding smoothly, doesn't it?
Now, let's consider the scenario where, during your first week on the job, your boss requests that you sign a new contract, essentially a noncompete agreement. This new contract would require you to commit not to engage in competition with the company if you choose to terminate your employment. However, the employer does not offer anything additional in return. For the sake of this example, let's assume that you agree to sign the new agreement. Is this new agreement legally valid and binding upon you? Most likely not. Why? Because the company has not incurred any new legal obligation or detriment as a result of this contract. While you have agreed not to compete with the company upon departure, the company has not provided anything in exchange for your promise. To establish this contract as legally binding on your part, your employer should have furnished consideration. For instance, they could have asked you to sign the noncompete agreement in exchange for an additional one thousand dollars in annual salary. In this scenario, the contract would include consideration and a much greater likelihood of being considered valid. Even better, the company should have negotiated the noncompete agreement as part of your original contract before you assumed your new role.
Continuing with our previous example of the offeror who is selling his scooter for four hundred dollars, if he states, "I offer to sell you my scooter for four hundred dollars," and you respond, "I agree to buy your scooter for four hundred dollars, if I don't find one that I like more," this does not constitute valid consideration. This is because you have introduced a condition into the consideration. Essentially, what may seem like a promise on your part is, in fact, only an illusion of a promise. This is known as an "illusory promise," and it does not constitute valid consideration. There is no legal detriment to you in this situation because you have an escape clause - the possibility of finding a scooter you prefer over the one offered by the offeror. In legal terms, there is no enforceable legal obligation on your part. For valid consideration to exist, there should be a legally enforceable burden or obligation, and you should not have a means to easily opt out of the promise without incurring a legal detriment. The other party must be able to rely on your promise for it to constitute valid consideration. The subject of the bargain can encompass either an act or a promise (whether to do something or refrain from doing something).
Furthermore, to render a contract valid, it is imperative that the subject matter of the contract serves a lawful purpose. If a distributor of illegal drugs engages a pilot to transport their illicit cargo to a specific location in exchange for payment, the contract pertains to an unlawful subject matter. In such a case, should the drug dealer fail to fulfill their obligation to pay, or if the pilot breaches their commitment to transport the cargo, neither party would find legal recourse in our courts. This is true even if all the requisite elements of a contract are meticulously fulfilled.
Additionally, all parties entering into a contract must possess the legal capacity to do so in order for the contract's terms to be enforceable against them. Adults of sound mind are considered to have the requisite capacity. Conversely, minors lack full legal capacity but can enter into contracts that they have the option to void unilaterally. In other words, a minor who enters into a contract with a party possessing full legal capacity may choose to void the contract, but the other party may not do so. This signifies that any contract with a minor is subject to being voided by the minor under the infancy doctrine.
Now, let's draw a comparison between common-law contract formation and UCC (Uniform Commercial Code) contract formation. Common law governs contracts for services and those not regulated by the UCC. Article 2 of the UCC, on the other hand, is concerned with the sale of goods, as defined in §2-105, which encompasses movable items but excludes money or securities. It does not extend to real estate or houses. Contracts involving merchants are also governed by Article 2 of the UCC. In broad terms, §2-104 outlines a merchant as a person who engages in the sale of goods or represents themselves as possessing specialized knowledge or skills relevant to the practices or goods involved in the transaction.
Notably, since contract law falls under state law jurisdiction, different states may have varying laws pertaining to contracts. The UCC aims to bring uniformity to contract law across different states. However, like other uniform laws, the UCC only becomes law when state legislatures adopt it. All fifty states have adopted some version of the UCC, seeking to harmonize contract law principles.
Contracts between merchants often differ from common-law contracts in terms of their structure. They don't always feature offers with precise terms, and acceptances may not always be mirror images of the offers. Merchants often rely on purchase orders when acquiring materials, while the seller commonly includes an invoice with the shipment. These contracts frequently contain boilerplate language, although the specific language can vary between merchants. Such variability can lead to conflicts in terms, which, in common-law contract formation, might be considered fatal, a situation often referred to as the "battle of the forms." However, the UCC offers more flexibility in contract formation than common law, recognizing the practicalities of business transactions. The stringent requirements of common-law contract formation would be impractical for merchants. Imagine if every merchant had to issue offers with precise terms and obtain mirror image acceptances for every item bought or sold to create valid, enforceable contracts. Such a burden could disrupt commerce or result in numerous contract disputes.
Additionally, the UCC incorporates elements of the Statute of Frauds. The Statute of Frauds mandates that specific types of contracts must be in writing to be legally enforceable. In particular, for contracts involving goods valued at five hundred dollars or more, they need to be in writing and signed by the defendant to be enforceable. Other critical contract types that must be in writing and signed by the defendant to be legally binding include contracts related to interests in land, promises to pay the debts of another, and contracts that cannot be completed within one year. Contract types covered by the Statute of Frauds but not addressed by the UCC are often governed by state statutes. The name "Statute of Frauds" stems from its early implementation in seventeenth-century England, when parliament passed a statute to prevent or reduce fraud in property transactions and other significant civil matters.
One of the primary concerns for business students is understanding the distinctions between common-law contracts and the UCC. When analyzing a contract-related issue, the initial step should be identifying the type of law governing the contract, as the applicable rules depend on the type of law in question.
The primary disparities between common-law contracts and the UCC revolve around the UCC's relaxation of several common-law contract formation requirements. Refer to Table 6.1 "Differences between Contract Formations by Type of Law" for a comprehensive comparison of common-law and UCC contract formation requirements. In situations where a "battle of the forms" emerges between merchants, conflicting terms are not detrimental to the contract under the UCC. This marks a significant departure from the common-law requirement of a "mirror image" acceptance. Under the UCC, the central issue is whether the parties intended to establish a legally binding agreement. New or additional terms introduced in an offer become part of the contract upon acceptance. Contradictory terms will be excluded from the contract and replaced by UCC gap fillers, which help determine the terms of the contract. Moreover, terms that are left unspecified will also be filled in. Gap fillers are terms provided by the UCC, and they can be incorporated into a contract when the terms are not precisely defined. While aspects such as prices, delivery dates, warranties, and other terms can be supplied by UCC gap fillers, quantity is a critical term that must be specified in the contract for it to be legally binding.
Table 6.1 Differences between Contract Formations by Type of Law
| UCC | Common Law |
|---|---|
| Any mode of expressing agreement to form a contract, whether through spoken or written words, actions, or other means. | Mirror image acceptance required |
| A specific quantity or amount of the goods being contracted for must be clearly stated in the agreement. While other terms can be filled in using gap fillers provided by the UCC, the quantity term must be unambiguously defined for the contract to be considered valid and binding. | Essential terms must be definite |
| The UCC primarily governs contracts between merchants, which are individuals or entities with specialized knowledge or experience in the goods or services involved in the transaction. Additionally, it applies to contracts for the sale of goods valued at $500 or more. | Contracts for services and for interest in real property |
Whether the lack of good faith in a contract should matter depends on the specific circumstances and applicable laws. In general, good faith is an important principle in contract law. It implies honesty, fairness, and the absence of any intention to deceive or defraud the other party. If a contract lacks good faith, it may indicate fraudulent or unethical behavior.
In the case of Locke v. Warner Bros. Inc., while all essential elements of the contract may appear to exist and the parties performed as required by the contract's wording, the issue of good faith can still be relevant. Lack of good faith can be demonstrated in various ways, such as:
Misrepresentation: If one party deliberately misrepresents facts or intentionally withholds material information, it can be a sign of bad faith.
Deceptive Practices: Engaging in deceptive practices, like bait-and-switch tactics or false advertising, can indicate a lack of good faith.
Unfair Negotiation: If one party uses unfair or coercive tactics during contract negotiations, it may suggest bad faith.
Breach of Implied Duties: Every contract carries an implied duty of good faith and fair dealing. Violating this duty can be seen as acting in bad faith.
As for personal experiences with broken promises, whether they are legally enforceable promises or not depends on the presence of all elements of contract formation. If all elements are present, and the promise is governed by contract law (whether common law or UCC), then it may be legally enforceable. For example, if someone promises to pay you for a service in exchange for your work, and all elements of a valid contract are met, it's likely a legally enforceable promise.
Regarding the dangers of making a counteroffer, when selling a house or in any contract negotiation, there are several things to consider:
Risk of Rejection: The other party may choose to reject the counteroffer, leaving you with no deal. You should assess how important the current offer is and whether you are willing to risk it.
Timing: Delays in negotiation can lead to missed opportunities. Consider how quickly you need to sell your house and whether you can afford to wait for a better offer.
Buyer's Response: The buyer may have alternative options and could move on to other properties if the counteroffer is perceived as too demanding or unreasonable.
Terms and Conditions: Ensure that the terms and conditions of your counter offer are clear and fair. Unreasonable demands could lead to an impasse in negotiations.
Legal Implications: Ensure that your counteroffer is compliant with relevant laws, and consider involving legal professionals if needed.
In summary, good faith is a critical element in contract law, and its absence can have legal implications. Whether a promise is legally enforceable depends on the presence of all elements of contract formation and the relevant laws governing the agreement. When making a counteroffer, it's essential to carefully assess the risks, timing, buyer's response, and the fairness of your terms.
6.2.2 Performance and Discharge, Breach, Defenses, Equitable Remedies
A contract represents an enforceable promise, and its fulfillment means that the parties have satisfied the terms outlined within it. Consequently, the parties are released from their contractual obligations, having successfully executed the terms of the contract and met their legal duties. This is the desired outcome when entering into a contract – the successful execution of the contract's terms and subsequent discharge from its obligations.
However, ascertaining whether the contract terms have been adequately performed can vary in complexity. In some cases, it's straightforward. For example, if you offer to sell your scooter for four hundred dollars, and the other party agrees, followed by the exchange of the scooter and payment, both parties have fulfilled their obligations under the contract. This represents complete performance, and the parties are consequently discharged from any further obligations under the contract.
In other situations, determining whether a party has performed can be more intricate. Take, for instance, hiring a builder to construct a new home with highly specific dimensions and building materials. While such a contract may be detailed and all essential elements determined, issues may arise. Imagine that the builder agrees to build your specified home, and you agree to pay the builder the agreed-upon price. Suppose everything proceeds according to plan until you discover, upon visiting the completed home, that the foyer has been tiled in red ceramic, while you explicitly specified blue ceramic in the contract. However, all other elements specified in the contract have been completely performed.
The question then arises: Has the builder fulfilled their duties under this contract? The key concern is the discrepancy in the foyer tile. Does this discrepancy constitute a breach of contract, and, more crucially, does it release you from your obligation to pay the builder for their work?
In this scenario, the builder may not have performed fully under the contract because they failed to comply with the specified foyer tile color, which is a material term of the contract. The error in tile color may indeed constitute a breach of contract. However, whether this breach excuses you from your obligation to pay the builder depends on various factors, including the severity of the breach, the extent to which the contract has been performed, and any available remedies outlined in the contract itself or under applicable law.
In cases like this, it's advisable to consult with a legal professional who can assess the specifics of the situation and provide guidance on the rights and responsibilities of the parties involved.
When a party fails to fulfill their obligations under the terms of a contract without a legally justifiable reason, it is considered a breach of the contract. However, the standard of performance in service contracts, such as one involving the construction of a house, is typically substantial performance. This means that the performing party has acted in good faith and provided enough benefit under the contract to allow the other party to use it for its intended purpose. Defects that arise under the contract may be remedied through monetary damages. A material breach in a service contract occurs when a party has not substantially performed their obligations under the contract, while a minor breach is when the party has substantially performed but has not strictly adhered to the contract terms.
In the example of the builder who installed the red tile in the foyer instead of the specified blue tile, this would generally be considered a minor breach. The builder acted in good faith, delivered a house suitable for its intended purpose, and the issue (the red tile) can be resolved with monetary damages by replacing it with the specified blue tiles. In such cases, you would typically be required to pay the builder as stipulated in the contract, minus the cost of replacing the tile.
Regarding the firing of Texas Tech's head football coach, Mike Leach, to determine whether substantial performance exists or if the contract has been materially breached, you would need additional information. Key factors to consider would include the terms and clauses of the employment contract, the specific actions or omissions of Coach Leach, any potential justifications or defenses presented by the university, and any applicable industry standards or precedents.
Sometimes, a higher standard of strict performance may be required, but it depends on the express terms of the contract and the reasonableness of such a standard in the given circumstances. For instance, in the scooter example, if you attempted to offer the seller three hundred dollars in cash and one hundred dollars in postage stamps, it would likely not satisfy the terms of the contract. The contract was for a scooter in exchange for four hundred dollars in cash. In this case, strict performance is both sensible and reasonable, as the terms were clearly outlined.
Performance to the standard of personal satisfaction can be enforced if the contract explicitly requires it. In such cases, performance is evaluated subjectively, either by one of the parties to the contract or by a third-party beneficiary named in the contract. This subjective assessment is typically applied when the subject of the contract involves something for which approval depends on personal taste, preferences, or individual judgment.
For instance, if you own a piano bar and wish to hire a pianist whose music not only technically accurate but also truly inspired, you could enter into a contract with a pianist under a personal satisfaction standard. Even if the pianist can flawlessly play the piano, you might feel that their music lacks the necessary inspiration. If the contract allows for personal satisfaction as the standard of performance, you may terminate the contract based on the failure to meet this personal satisfaction standard.
This standard is distinct from the substantial performance standard, which requires an objective assessment based on what a reasonable person would consider acceptable.
In the case of Texas Tech's decision to terminate Coach Mike Leach's contract it seems that the substantial performance standard was more likely controlling their decision. Coach Leach's actions were likely evaluated based on objective criteria, such as whether his behavior and performance met the standard of a reasonable person's expectations for a football coach.
The appropriate standard for a contract for coaching services would typically be substantial performance because it involves objective factors like adherence to training programs, team management, and meeting industry standards for coaching, rather than subjective elements like personal taste or individual satisfaction.
The termination of Coach Mike Leach from his position as head football coach at Texas Tech highlights a complex situation involving allegations of breach of contract, questions about the interpretation of contract terms, and concerns about his behavior and personality.
Under the terms of Coach Leach's contract, he was obligated to ensure the fair and responsible treatment of student-athletes in terms of their health, welfare, and discipline. The controversy stemmed from an incident in which Coach Leach allegedly forced a student-athlete diagnosed with a mild concussion to stand in a shed. Proponents of Coach Leach argue that the shed was a comfortable, garage-like room with cooling and ventilation, and that he was adhering to medical orders by having the player stand indoors to avoid the sun. Others, however, contend that this was a cruel and inappropriate punishment for an injured player.
The assessment of whether Coach Leach's actions were cruel or protective hinges on the interpretation of the contract terms and the specific circumstances surrounding the incident. The interpretation of contract terms can often be a matter of contention and may involve legal proceedings to resolve.
Additionally, underlying the firing were allegations that Coach Leach interviewed with another university without Texas Tech's knowledge and concerns about his colorful personality, including remarks he made about players' "fat little girlfriends." These factors may have contributed to the decision to terminate his contract.
It's important to note that Coach Leach's firing took place just before he was set to receive an alleged $800,000 contractual bonus, which further complicated the situation and likely added to the contentious nature of his termination.
In cases like this, legal experts, arbitrators, or courts may need to examine the contract terms, the circumstances of the incident, and the university's actions to determine whether the termination was justified or constituted a breach of contract. The interpretation of the contract and the evaluation of performance standards will be critical in such assessments.
As previously discussed, the fulfillment of contractual promises in a contract hinges on meeting specific standards, such as substantial performance, strict performance, or personal satisfaction, resulting in the discharge of the involved parties. However, a breach of the contract can introduce a legal claim for damages. Nevertheless, the breach may not necessarily mark the conclusion of the legal proceedings, as the breaching party might have valid justifications for their actions. These justifications are legally recognized as defenses to a contract. These defenses encompass a range of factors, including problems with contract formation, lack of capacity, illegality of the subject matter, impossibility, duress, unconscionability, undue influence, violation of the Statute of Frauds (which mandates certain contracts to be in writing for enforceability), exceeding the statute of limitations, mistake, misrepresentation, fraud, commercial impracticability, and frustration of purpose.
Bankruptcy discharge, on the other hand, grants a permanent legal release from performance, discharging obligations that are legally dischargeable when the debtor successfully fulfills their duties under the bankruptcy. Conversely, obligations that are not dischargeable by law remain unaffected by a bankruptcy proceeding. During bankruptcy, the performance of contract terms requiring debt payment incurred before filing for bankruptcy is suspended by the court. This suspension persists until the bankruptcy is either successfully completed or the case is dismissed.
Formation issues in common-law contracts primarily pertain to the validity of the offer, acceptance, and consideration. For instance, if an offer lacks essential, definite terms, it will not be considered valid. For instance, offering to sell a house for a "fair price" is insufficient because it lacks specificity, especially regarding the price, which is an essential element. Similarly, in common-law contracts, an acceptance that deviates from the exact terms of the offer is not valid. Furthermore, if the consideration fails to firmly commit the parties to the contract, such as with an illusory promise, the contract fails to form. For example, offering to sell a house for $150,000, and having the other party agree to purchase it "if they like it" lacks a firm commitment, rendering the consideration invalid and the contract unformed. To invoke this defense, the defendant needs to demonstrate that the contract was never properly formed due to one or more formation deficiencies. However, it's important to note that if the Uniform Commercial Code (UCC) governs the contract, formation is less strict than in common law. In UCC contracts, not all essential elements need to be stated in definite and certain terms (except for quantity), and acceptance doesn't have to mirror the offer. Consequently, employing this defense can be more challenging when the UCC governs the contract.
In situations where all the necessary elements of a contract are not met, the court may opt for an equitable remedy to prevent what is perceived as an injustice that could result from a contract failure due to a formation defect. Two types of equitable remedies that a court can apply in such cases are quasi-contract and promissory estoppel. These remedies come into play when detrimental reliance is established, allowing the court to enforce the terms of the "contract," even when, strictly speaking, no contract existed from the outset.
Quasi-contract is invoked when one party benefits unjustly (experiences unjust enrichment) at the expense of the other, and the party providing the benefit had a reasonable expectation of being compensated for it. Furthermore, the party receiving the benefit was aware of the provider's reasonable expectation of payment. For example, consider a scenario where your neighbor hired painters to paint his house, but the painters mistakenly arrived at your residence. Instead of turning them away, you allowed them to paint your house without informing them of the error. Upon completing the job, the painters demanded payment. You correctly point out that there was no formal contract between you and them. However, the issue lies in the unjust enrichment you would experience if you were not made to pay. Moreover, you were fully aware that the painters reasonably expected compensation for their services, and you took no action to prevent them. This situation would warrant the court to employ the equitable remedy of quasi-contract. The damages awarded in such cases, known as quantum meruit, mean "as much as is deserved." The painters would receive the value of their services as compensation. Now, consider a contrasting situation in which you were away on vacation when the painters painted your house, and you had no knowledge of their presence. In such a case, quasi-contract would not be applied as an equitable remedy because you were unaware of their actions. In fact, you might have a potential claim against the painters for trespassing on your property and entering your premises without permission.
Promissory estoppel is another equitable remedy utilized when one party relies to their detriment on another's promise, and enforcing that promise is necessary to prevent an injustice. Similar to quasi-contract, the use of promissory estoppel typically arises from a formation problem with the contract, meaning that, strictly speaking, no contract exists.
The defenses we will now explore in this chapter come into play when a contract is considered valid, meaning there are no issues related to its formation. These defenses can be instrumental in challenging the enforceability of an otherwise sound contract.
For instance, when one of the parties lacks the capacity to enter into a legally binding contract, it can serve as a valid defense. Lack of capacity typically refers to a party's inability to comprehend and consent to the terms of the contract due to mental incapacity. An important instance of this is with minors. Even if some minors may grasp the contractual terms, they lack the legal capacity to be bound by them, allowing them to disaffirm the contract if they choose to do so. Similarly, individuals with temporary or permanent cognitive impairments, such as infants, individuals suffering from dementia, or those with significant cognitive or mental disabilities, lack the capacity to be bound by a contract. The influence of alcohol or drugs on capacity may be considered, although courts tend to be hesitant in recognizing this as a strong defense, especially if the person willingly consumed alcohol or drugs. However, if an individual was involuntarily drugged, then lack of capacity can serve as a strong defense. Another situation that can indicate a lack of capacity is when a party cannot read or understand the language in which the contract is written.
In cases where the subject matter of the contract or the terms of the contract are illegal, the contract can be void from the outset or may become void if the subject matter or terms turn illegal after the contract is formed. In the former scenario, envision a contract for the production of illegal drugs; here, a defense can be raised based on the illegal subject matter of the contract. In such cases, a court will not intervene to enforce the contract's promises due to the illegal nature of the subject matter.
The latter situation involving illegality of contract terms is an illustration of impossibility as a defense. Impossibility is a defense employed when it becomes genuinely impossible to perform the contract. For example, if you entered into a contract to conduct business in a country subsequently placed on a no-trade list by the federal government, you would be excused from fulfilling your contractual obligations because doing so would contravene federal law. This constitutes a valid defense based on impossibility. Sometimes, impossibility does not stem from the legality of the subject matter or contract terms but rather from the destruction of the subject matter. For instance, imagine that before finalizing a transaction, a scooter was accidentally crushed by a waste collector. The subject matter of the contract has been obliterated, making it impossible for the offeror to fulfill their obligations. In this scenario, the offeror need not find another scooter to sell; instead, they can rely on the defense of impossibility.
Another important defense to contract performance is duress. When a party can demonstrate that they entered into a contract under duress, it constitutes a valid defense. Duress occurs when a party had no reasonable alternative but to agree to the contract and was essentially coerced into the agreement. For instance, consider a scenario where you have an automobile insurance contract that obligates your insurance company to defend you in the event of a lawsuit arising from a traffic accident. Imagine that you get into a traffic accident, and your insurance company refuses to uphold its defense obligation. This places you in a precarious situation, as you'll need to mount a defense on your own, incurring significant expenses. In addition, you consider filing a breach of contract complaint against your insurance company. After exhausting your savings and borrowing money to cover your bills, your insurance company approaches you with an offer: they'll pay you fifty thousand dollars in exchange for signing a waiver that absolves them of any liability. Under these circumstances, you're likely to sign the waiver and accept the money. Why? Because you have no reasonable alternative. This situation illustrates economic duress, and it's highly probable that no court would enforce the waiver in favor of the insurance company, given the circumstances. The insurance company effectively forced you into an agreement that you wouldn't have signed if you had any other reasonable choice.
Unconscionability serves as a defense when the contract contains conspicuously unfair terms that heavily favor the party with more bargaining power or sophistication, while the other party, with less power and understanding, is induced to sign it. For example, consider a biotech company that discovers a cure for cancer from a plant found on the private lands of an indigenous people. These indigenous people may not fully grasp the significance of the discovery or understand its value. If the biotech company offers to acquire complete rights to the plant for a mere ten dollars and a bag of flour, such a contract may be deemed unconscionable due to the significant disparity in bargaining power and knowledge between the two parties.
Undue influence stands as a defense that can be invoked when one party loses their ability to exercise free will due to the overwhelming power and influence exerted over them by another party. To illustrate, picture an elderly individual who is isolated from social contact due to poor health and remote living conditions. This person might be deeply lonely and eager for companionship. Suppose an unscrupulous individual enters the elderly person's life and exerts such an influence that the elderly individual can no longer make decisions freely. If, as a result, the elderly person enters into a contract with the other party, transferring all their wealth, this could be categorized as a case of undue influence. How does this occur? Perhaps the unscrupulous intruder is the elderly person's sole source of human contact, leading the wealthy elderly individual to believe that the only way to salvation is by surrendering their assets.
It's also essential to bear in mind the Statute of Frauds, which mandates that specific contracts must be in writing and signed by the defendant to be legally enforceable against that defendant. Failure to meet this written requirement can be used as a defense to performance. Contracts related to interests in land, marriage consideration, debts of another that extend beyond one year, and contracts for the sale of goods valued at five hundred dollars or more are all examples of contracts that demand written documentation for enforceability under the Statute of Frauds. If a contract pertains to these categories but lacks written documentation, it may still be executed. However, if a dispute arises under the contract, it will not be enforced because it violates the Statute of Frauds' requirement for written evidence.
The statute of limitations serves as an affirmative defense that the defendant can raise, arguing that the complaint has been brought too late, according to the law, to take action on it. This implies that if a dispute emerges under a contract, the plaintiff must file a complaint regarding the dispute within a specific timeframe. Each state maintains distinct statutes of limitations for various types of disputes. Contract-related statutes of limitations vary from three to ten years, depending on whether the contract was oral or written and the jurisdiction in question.
Mistake serves as a rarely successful but valid defense in contract disputes. It's important to note that mistake should not be confused with poor bargaining. Parties are free to negotiate and agree to unfavorable terms, and the courts won't intervene to rectify such situations. For example, if you agree to purchase a house for $170,000, but it's only worth $150,000, and the seller hasn't engaged in any deceptive practices, you might have engaged in a poor bargain, but the court won't rewrite the contract or allow you to use mistake as a defense to evade your contractual obligations. Mistake, in this context, refers to a true and substantial error, either by one party or both, regarding essential terms of the contract. When the parties genuinely make a mistake concerning crucial aspects of the contract, it can be used as a valid defense to non-performance.
Misrepresentation and fraud are additional defenses in contract law. Misrepresentation occurs when one party makes a false statement that induces the other party to enter into the contract. Fraud is closely related, involving deception used to gain money or property. Unscrupulous salespeople may engage in fraudulent practices or misrepresent the contract's subject matter to induce the other party to enter into the agreement. In many cases, fraud and misrepresentation can be successful defenses when used in these circumstances.
Commercial impracticability serves as a defense when fulfilling a contract has become exceptionally difficult or inequitable for one party, often due to unforeseen external factors or events beyond their control.
Frustration of purpose arises when the contract becomes essentially worthless to one party because the event or circumstance that has led to this situation was either non-existent or unknown to both parties at the time of contract formation.
In some instances, a party to a contract may file for bankruptcy protection. When this occurs, and the party is obligated to pay a debt incurred prior to filing for bankruptcy, that obligation is temporarily or permanently suspended through the court's automatic stay. In essence, the debt does not have to be paid during the course of the bankruptcy proceedings. Upon the conclusion of the bankruptcy, if the debtor successfully completes the bankruptcy process and if the contract obligation constitutes a dischargeable debt, then the debt becomes permanently excused. It is, in fact, discharged. Bankruptcy serves as a defense to performance of contracts for those who seek bankruptcy protection.
Remedies for breach of contract primarily involve monetary damages. Expectation damages, including compensatory and consequential damages, can be sought as part of these remedies. However, consequential damages must not be speculative and should have been foreseeable to both parties at the time of contract formation to be considered damages due to a breach. In specific cases, such as contracts for real property, the court may order specific performance, which means that the breaching party is compelled to fulfill the terms of the contract. For instance, in contracts related to real estate, it is generally assumed that land is unique, and therefore, monetary damages may not suffice. Replacement land of the same kind is not readily available. It is important to note that specific performance is not an appropriate remedy for service contracts, as it contravenes the prohibition against involuntary servitude found in the Thirteenth Amendment to the U.S. Constitution.
Furthermore, it's crucial to understand that upon breach of contract, the injured party has a duty to mitigate their damages. This means that they must make reasonable efforts to minimize the losses resulting from the breach. For example, if a tenant breaches a lease contract by vacating the apartment before the lease term ends, the landlord can seek damages for the breach. However, the landlord also has a responsibility to mitigate these damages by actively attempting to find a replacement tenant to limit the financial impact of the breach.
6.3.3 Assignment, Delegation, and Commonly Used Contracts Clauses
Consider this scenario: You've entered into a contract with a rock 'n' roll band to perform at your nightclub. You specifically chose this band based on its reputation for drawing large crowds and believed your customers would pay to see them. However, as the performance date approaches, you're shocked to discover that a different, lesser-known band you've never heard of is set to perform instead of the original contracted band. Upon inquiry, you learn that the original band has delegated its performance duties to this lesser-known group. Can they do that?
Contract terms are crucial, as they define the obligations and rights of the parties involved. These terms can have various implications, such as limiting your ability to file a legal complaint, impacting your professional opportunities, or determining liability for injuries caused by a party's actions. If you're unaware of these terms, you might be in for an unpleasant surprise if you act contrary to the restrictions imposed by the contract.
Contracts possess certain inherent qualities and common elements that restrict parties from certain actions, unless those restrictions are explicitly waived. When negotiating a contract, if you disagree with a specific term, you should not agree to it. In legal terms, there's an assumption that you have read, understood, and consented to every term in a contract you're a party to. Arguing that you didn't comprehend or didn't approve of a particular term after the fact is not a valid excuse for non-performance.
It's essential to thoroughly understand the terms of a contract and what you can reasonably expect when entering into one. In your case, are you getting the band you originally intended to hire for your nightclub, or does the contract permit the original band to transfer its performance obligations to another band? Clarifying and specifying such details in the contract can help prevent such surprises and disputes in the future.
It's important to recognize that, as a fundamental principle, contracts are generally assignable and delegable by law. This means that the rights conveyed by the contract can be transferred to another party through assignment, unless there is a specific provision in the contract restricting assignment or unless assignment would violate public policy. Similarly, the duties imposed on a party can be transferred to another party through delegation, unless the contract explicitly restricts delegation, or there is a significant interest in personal performance by the original contracting party, or if delegation would violate public policy.
In the case of a band hired to perform at a nightclub, an argument could be made that the original band cannot delegate its duties under the contract due to the substantial interest in personal performance by the original band. This would render the contract non-delegable. To ensure clarity, your contract with the band should have included a clause expressly prohibiting delegation.
Many individuals have encountered restrictions on assignment in the form of "no-sublease" clauses in leases with landlords. If your lease contains such a clause, it constitutes a restriction on assignment. This provision is necessary to prevent you from assigning your rights under the lease, specifically, your right to inhabit the premises, to another party. Landlords must include this provision explicitly if they wish to prohibit tenants from subleasing, as there is a legal presumption that assignment is allowed unless expressly prohibited by the contract or if assignment would violate public policy. Since subleasing a housing unit in your absence is unlikely to violate public policy, the landlord must expressly forbid assignment in the original contract if they intend to prevent subleasing. The landlord may have valid reasons for this, such as wanting to ensure that each tenant is creditworthy before allowing them to live on the property.
It's essential to note that in both delegation and assignment, the original contracting party remains liable if it transfers its duties or rights to another party. For example, if subleasing was not prohibited, and the new tenant assumed the rights and duties from the original contract, the original party is still responsible for rent payment. If the sub leasing tenant fails to pay the rent, the original party to the lease remains liable. To release oneself from this liability, a three-way novation can be formed involving the original party, the new party, and the landlord. This novation essentially creates a new contract transferring all rights and duties to the new party, while releasing the original party from any further obligations arising from the original contract.
Aside from restrictions on assignment and delegation, there are other common elements that can be found in contracts. One of these elements is the exculpatory clause. An exculpatory clause is an explicit limitation on potential or actual liability arising from the subject matter of the contract. In essence, exculpatory clauses are often used in situations where there is a risk of injury. They aim to restrict one party's liability to another. You've likely encountered and signed contracts containing exculpatory clauses if you've engaged in potentially hazardous activities at a club or with an organized group that could be held liable for injuries sustained by its patrons or members. For example, if you join a kayaking club, you may be asked to sign an agreement that holds the club harmless in the event of an accident or injury. However, even with the existence of an exculpatory clause, liability will not be limited, meaning the limitations on liability will be unenforceable when the party seeking to benefit from the liability limitation acted with gross negligence, committed an intentional tort, had significantly greater bargaining power, or if the limitation on liability violates public policy. For instance, if you signed an agreement to participate in kayaking activities with a kayaking group and the group's leader assaulted you with her oar due to your mishandling of the kayak, the exculpatory clause would not protect the kayaking organization from liability incurred due to the actions of its employee, as battery is an intentional tort.
Another common contract element is the noncompete clause. A noncompete clause seeks to limit competition for a specified period, within a defined geographic area, and for specific activities. Noncompete clauses are generally enforceable against the party who signed them if the time, place, and scope are deemed reasonable. These clauses are frequently included in employment contracts, especially when the nature of the employment involves trade secrets or other proprietary information that the company wishes to safeguard.
Mandatory arbitration clauses are also common in consumer and employment contracts. If you've signed a credit card contract, you have likely agreed to the restrictions imposed by these clauses. Mandatory arbitration clauses require parties to a contract containing such a clause to resolve disputes through mandatory arbitration. These clauses often prevent any possibility of appealing arbitration awards in court.
An acceleration clause is frequently present in contracts where periodic payments are anticipated by the agreement. For instance, if you signed a lease for your housing unit and pay rent on a month-to-month basis, breaching the lease would mean that you owe rent for each subsequent month as specified in the lease agreement. Consequently, your landlord would incur new damages each month that you do not pay. An acceleration clause accelerates all payments due under the contract in the event of a breach. This allows the injured party, in this case, the landlord, to sue for all damages due for unpaid rent under the contract at once, instead of having to initiate a new lawsuit each month to seek unpaid rent for that particular month.
A liquidated damages clause allows parties to specify the amount of damages in the event of a breach. Agreeing on the amount of damages before any breach occurs can save time and money that would otherwise be spent on litigation. As long as the liquidated damages clause does not appear to be a penalty, it will be valid and upheld by a court hearing a dispute arising from the contract. For instance, consider a contract for the sale of your car. If the liquidated damages clause specifies two thousand dollars in damages in case of a breach, it will likely be considered a valid liquidated damages clause, assuming your car is of average value. However, if the liquidated damages clause stipulates one million dollars in damages to be paid by the breaching party, it would not be enforceable by the court because it resembles a penalty. In this case, the proposed liquidated damages far exceed the value of the car that is the subject of the agreement.
These are just some common elements found in contracts, and there are additional provisions that may be included depending on the specific agreement. For example, the time of performance is often delineated as a separate provision. However, the time for performance is an essential element in common-law contract formation, and its inclusion is necessary to provide definite and certain terms in the formation of the contract.
A fundamental assumption concerning a written contract is its integration, signifying that it comprises the complete expression of the parties' agreement. Consequently, any statements made prior to the signing of the contract are not considered part of the contract unless those statements are explicitly documented within the contract itself. In essence, any statements or actions not included within the confines of the contract are categorized as parol evidence and will not be employed to interpret the contract's meaning.
10.4.4 Capacity
A contract is essentially a meeting of the minds. If an individual lacks the mental capacity to comprehend what they are agreeing to, or that they are entering into an agreement at all, it would be unreasonable to hold them accountable for the consequences of their actions. Under common law, there are different categories of people who are presumed to lack the necessary capacity, including infants (minors), individuals with mental illness, and those who are intoxicated.
Minors (or "Infants")
The General Rule
The general rule is as follows: minors (referred to more legally as "infants") are typically individuals younger than seventeen years old in most states. They have the ability to void their contracts, both before and within a reasonable time after reaching the age of majority, with some exceptions and limitations. The underlying rationale behind this rule is that minors do not possess the same level of maturity and judgment as adults, and it would be unfair to require them to adhere to contracts entered into when their judgment is still immature.
It's important to note that the terms "minor" and "infant" are largely synonymous, although there might be slight distinctions depending on the legal drinking age in a particular state. For example, in a state where the legal age for consuming alcohol is twenty-one, a twenty-year-old would be considered a minor but not an infant because infancy is typically defined as being under eighteen. A seventeen-year-old may have the ability to void contracts (usually), but an eighteen-year-old, while legally bound to their contracts, would not be allowed to legally consume alcohol. From a strict legal perspective, the more accurate term for someone who can void their contracts is "infant," even though in everyday language, we typically use the term "infant" to refer to a baby.
The age of majority, which marks the point when an individual is no longer considered an infant or a minor, underwent changes in the 1970s in all states except Mississippi. This adjustment aligned the age of majority with the Twenty-Sixth Amendment, ratified in 1971, which granted the right to vote at eighteen years of age. The age of majority was lowered from twenty-one to either eighteen or nineteen in most states during this period. However, legal rights for individuals under twenty-one remain somewhat ambiguous. While eighteen-year-olds may legally enter into binding contracts, not all creditors and landlords are aware of this, and they may still insist on parents co-signing. Additionally, individuals under twenty-one may face legal limitations when it comes to certain types of employment, signing specific contracts, getting married, moving out of their parents' home, and consuming alcohol. There is no uniform set of rules in this regard.
The exact date on which an individual's minority status ends can also vary. The old common-law rule established it as the day before the twenty-first birthday. However, many states have modified this rule, setting the age of majority to commence on the day of the eighteenth birthday.
It's important to note that an infant's contract is considered voidable, not void. An infant who wishes to void a contract does not need to take any affirmative action to disaffirm it. Simply raising the defense of infancy in a lawsuit is sufficient. Although the adult party cannot enforce the contract, the infant party can, which is why it's termed "voidable" and not "void."
Exceptions and Complexities
There are several exceptions and complexities in this area, and we'll outline six of them.
Necessities
As an exception to the general rule, infants are typically liable for the reasonable cost of necessities. This exception is based on the understanding that denying infants the right to contract for necessities would harm them rather than protect them. In the past, a necessity was commonly defined as food, medicine, clothing, or shelter under common law. However, in recent years, courts have broadened the concept. In many states today, necessities encompass not only food, medicine, clothing, and shelter but also property and services that enable the infant to earn a living and provide for their dependents.
If the contract is executory, the infant can simply disaffirm it. However, if the contract has been executed, the consequences for the infant are more burdensome. While they will not be required to perform under the contract, they will be held liable under a theory of "quasi-contract" for the reasonable value of the necessity.
For example, in the case of Gastonia Personnel Corp. v. Rogers, an emancipated infant who was nineteen years old (before the reduction in the age of majority) needed employment. He entered into a contract with a personnel company to help him find a job, for which the company would charge him a fee. The company successfully found him a job. When he attempted to disaffirm his liability for payment on the grounds of infancy, the North Carolina court ruled against him. The court held that the concept of necessities should be expanded to include reasonable and necessary services that enable the infant to earn the money required to provide the necessities of life for themselves and their dependents. This case set a precedent for a broader interpretation of what constitutes necessities, especially in relation to an infant's ability to support themselves and their dependents.
Non Voidable Contracts
The second exception to the general rule regarding infant contracts involves state statutes that prohibit disaffirmation for certain types of contracts, such as insurance, education or medical care, bonding agreements, stocks, or bank accounts. Additionally, the right to disaffirm a contract may be lost if the rights of third parties intervene. For example, if an infant sells a car to one party and that party subsequently sells it to another party who is unaware of the original contract with the infant, the infant cannot recover the car from the second party. This is because the rights of the third party have intervened, and allowing the infant to recover the car would undermine confidence in commercial transactions.
Misrepresentation of Age
The third exception pertains to misrepresentation of age. In many states, if an infant misrepresents their age, they may still disaffirm a contract in accordance with the general rule. However, it depends on the circumstances. If the infant makes an affirmative and false statement about their age, the trend is to deny disaffirmation. For example, a Michigan statute prohibits an infant from disaffirming a contract if they have signed a "separate instrument containing only the statement of age, date of signing, and the signature." Some states may also estop the infant from claiming to be an infant if they have falsely represented themselves as an adult, even without explicit misrepresentation. Estoppel, in this context, refers to the court's refusal, on equitable grounds, to allow a person to escape liability based on an otherwise valid defense. Unless the infant can return the consideration received, the contract will be enforced.
Whether a non express (implied) misrepresentation goes so far as to be considered clearly misleading and fall into the prohibited area is a matter of fact and may vary by state. Some states hold the infant liable for damages for the tort of misrepresentation, while others do not. This has led to the creation of a privileged class of individuals who lie about their age, causing difficulties in the business world, as noted by the legal scholar William Prosser.
Ratification
When an infant becomes an adult, they have two choices regarding a contract made during their infancy: they may either ratify the contract or disaffirm it. Ratification can occur explicitly, with no further consideration required, or by implication, such as continuing to make payments or retaining goods for an unreasonable period of time. If the infant has not disaffirmed the contract while still a minor, they may do so within a reasonable time after reaching the age of majority, and the determination of what constitutes a "reasonable time" depends on the circumstances.
Duty to Return Consideration Received
In most cases of disavowal, the infant's only obligation is to return the goods (if they still possess them) or repay the consideration (unless it has already been spent). There is generally no requirement for the infant to account for what they may have wasted, consumed, or damaged during the contract. However, in cases where the age of majority has been lowered to eighteen or nineteen, and young people have usually graduated from high school, some courts may require the infant to account for what they received if it is appropriate to avoid injustice to the adult party.
Tort Connected with a Contract
The general rule is that infants are liable for their torts (e.g., assault, trespass, nuisance, negligence) unless the tort suit is merely an indirect method of enforcing a contract. For example, if an infant presents themselves as a competent mechanic and is hired to overhaul an engine but performs the work carelessly, resulting in damage to the engine, they cannot be sued for negligence. This is because such a suit would effectively be an attempt to enforce the contract indirectly.
Persons Who Are Mentally Ill or Intoxicated
Mentally Ill Persons
The general rule is that a contract made by a person who is mentally ill is voidable, and this voidability can be exercised by the person when they regain their sanity or by their guardian, if one has been legally appointed. However, if a guardian has already been legally appointed for a mentally ill person, any contract made by the mentally ill person is void but may still be ratified by the ward (the incompetent person under guardianship) upon regaining sanity or by the guardian.
In the case of a contract for a necessity, the other party may have a valid claim against the estate of the mentally ill person to prevent unjust enrichment. Whether a court will enforce a contract made with a mentally ill person in other cases depends on the specific circumstances. The contract can be avoided only if the mental illness impairs the person's competence in that particular transaction, meaning they did not understand the nature of the business at hand. Upon avoidance, the mentally ill person must return any property in their possession. If the contract was fair and the other party had no knowledge of the mental illness, the court may have the power to order other relief.
Intoxicated Persons
If a person is so intoxicated that they have no awareness of their actions, and if the other party is aware of this, no contract exists. The intoxicated person is obligated to refund the consideration to the other party unless they dissipated it during their drunkenness. However, if the other party is unaware of the intoxicated person's state and offers or accepts fair terms, manifesting assent, the contract is binding.
If a person is only partially inebriated and has some understanding of their actions, the ability to avoid a contract depends on several factors. Avoidance may be possible if it can be shown that the other party induced the drunkenness, the consideration was inadequate, or the transaction departed from the normal pattern of similar transactions. However, if the particular transaction is one that a reasonably competent person might have made, it cannot be avoided, even if it is entirely executory.
A person who was intoxicated at the time they made the contract may still subsequently ratify it. For example, in the case of Mervin Hyland, who had a history of involuntary commitments for alcoholism and executed a promissory note in an alcoholic stupor but later, while sober, paid the interest on the past-due note, he was denied the defense of intoxication. The court held that he had ratified his contract. In any case, it's important to note that the defense of intoxication is disfavored on public policy grounds.
Breach of Contract
Oral Contracts
Unenforceable Contracts
Chapter 3 Discussion:
In January 2001 a New York man attended a family birthday party at a Benihana restaurant, where chefs, while cooking at the table, routinely throw pieces of food for diners to catch with their mouths. The man wrenched his neck while ducking a piece of flying shrimp, requiring treatment by several doctors. By that summer, doctors determined surgery was necessary to treat numbness in his arm. Five months after surgery, he checked into the hospital with a high fever and died. The family sued Benihana for $10 million in damages, claiming that the fever was the result of surgery, which in turn was the result of the chef’s actions in throwing food at diners. Do you believe that Benihana should be liable for the man’s death? Why or why not?
No I don't think the restaurant should be held accountable because it was a known esthetic of that restaurant of being at a place that the chef's where known for throwing food. So he knew what he was getting into by going there. But also it was the hospital that did the surgery on his arm and after he died as a result they would have been the ones accountable for the result of the surgery not the restaurant that they went to. Like with the essay that I wrote the cases of people dying after simple surgeries at times can be a pretty high number and even the world health organization comments that they are often not necessary deaths. But I think if I went to a restaurant that I got hit with a shrimp I don't think id flinch much cause it's not like getting hit with a baseball and after reading the article it happened 3 times if they didn't like the atmosphere they could have walked out. So it seems more like they put themselves in a position to get injured.
Chapter 3 Essay:
Through your readings under Unit 3 write an essay on a subject of interest. This would be something that was thought-provoking that you wanted to know more.
The topic which I think is a really important one out of this week is malpractice. Currently there’s an ongoing case here in North Carolina in which the Atrium hospital failed to keep proper book keeping of dirty equipment and patients got exposed and are now at risk of having hepatitis or HIV. I saw it on the local TV channel and was pretty horrified because it’s not like the patient was going for a serious operation it was a simple procedure and it makes me wonder if Atrium can make mistakes like this how many other bad practices are they doing that aren’t even ended up being published on the news.
The initial information about the case actually started back in November of last year but a newer update last month shows that the number of cases of people exposed by this is over 100 people and none of them have gotten any answers from Atrium. Some came back positive for some of these serious diseases that they have been exposed to. Not only that but the patient cases went all the way back to September 2021 and Atrium didn’t try to notify people until the end of October 2022.
Looking at this type of case and how it’s not really being handled by outside sources and there’s a lack of policing by the State Department of Health and Human Services and the medical board of North Carolina it’s a little scary seeing as though if there’s really nothing to stop or protect individuals with this it leaves you wondering how many other states are pulling the same bad practices but because it’s never reported there are un-expecting individuals being exposed to serious diseases.
We rely on these medical services when we can’t fix the situation by simply taking care of diet and exercise and simple procedures but a situation like that can make people fear going to the doctor and put off important operations in fear of being at risk for a poor level of care that leaves them with HIV as a result for a simple operation which they need. Unfortunately, too since we have no idea how those infections came about because Atrium did nothing to let anyone know how they occurred it leaves nothing but speculation. Was it a method of reusing old machine’s rather than following procedure to clean them because they thought they could get away with it or was it just failed record keeping that happened like they said. Though with the scope of it going on for almost a year it makes me think it was something more than bad record keeping.
When we think of hospital as well we are thinking of a sterile area that is germ free but seeing a case like this happen and people being exposed to serious diseases also makes me wonder if the agencies behind the hospitals inspection aren’t doing a good job and don’t have a strict enough approach on the way they are caring for individuals. You figure we pay the most out of every country and yet still we find a lot of poor practices. And the fact that hospitals are also one of the main polluters when it comes to how things are disposed of in terms of the handling of radioactive materials as well.
To add to the fact hospitals might not really be as clean as we think I saw a study from overseas that said researchers found monkeypox virus on hospital surfaces and it reminded me not too long ago I remember seeing news talking about strange fungal viruses that where steroid resistant spreading in the hospital setting as well. And the article associated with it was speaking about Candida Auris fungus and how difficult it is to do a good cleaning of surfaces is difficult because of how it can linger. All of that just proves more to the point that the way hospitals are run they are not really a safe place free of germs like we expect them to be. And we are potentially at risk sometimes without knowing it.
Even the World Health Organization estimates that a large number of patients in hospital are at risk because of unsafe practices or mistakes and over 80% of them are preventable according to WHO. That tells me that we need better overall laws and the medical arrangement needs to be changed so that we can safeguard our people and make sure they get the proper care they need and aren’t being put at risk from disease or poor practice.
We have programs like Occupational Health and Health Administration to protect people in the workforce maybe it’s time for a similar safe guard for the hospital system to make sure that they are properly caring for patients and to add to that as well maybe the same standards when it comes to food and proper cleaning up should be applied when it comes to hospitals. This way we would have an overall better environment.
But too anytime changes are made then that also means costs will rise with the change and most people can’t afford insurance costs for good care now which is also likely why hospitals could potentially be using that as a reason to cut corners when it comes to how people are being treated in the hospital arrangement. And making that harder on people will not make it better overall so there’s a lot of challenges when it comes to getting the right care.
Before any of this is possible there has to be an admitting that there’s problems going on and a proper accounting to go with that. But there should be justice for people effected by poor care from hospitals and more advancements should be made in the future to help turn the potential for these things to happen to people. Or else people might eventually give up the trust they should be able to have when it comes to hospitals and care.
Chapter 3 Quiz:
Question 1
2 / 2 pts
Monica was shopping for a new phone when she was detained for suspicion of shoplifting. The detention lasted for 6 hours. If the store manager asserted that he had the right to detain Monica under the shopkeeper's privilege. What does the shopkeeper's privilege require with respect to the length of a detention?
x The store can only detain the customer for a reasonable amount of time.
The store must give the customer a Miranda Warning before questioning him or her.
The store can use leg and arm restraints to detain a customer suspected of shoplifting.
The store must obtain a confession from the suspect to prove that a theft has occurred.
Question 2
2 / 2 pts
Retired utility workers are suing their former employer for knowingly exposing them to asbestos without warning them of the health risks. The retired workers did not learn of the prolonged exposure until long after their retirement because the company engaged in a systematic cover up of the exposure. The retired workers' cause of action is for which of the following?
Assault
x Battery
Injurious falsehood
Tortious interference
Question 3
2 / 2 pts
A motorcycle bar hosted an all you can drink "chugging" contest for its patrons. Later, one of its patrons caused an accident that injured a road worker. Under what legal theory will the motorcycle bar be held liable for the road workers injuries?
Conversion
x Strict liability
Attractive nuisance
Tortious interference
Question 4
4 / 4 pts
Dominick is a tax preparer. His former client named Yasmine is suing him over a hacked bank account from which thieves stole $2,500. The whole problem began with the electronic card reader Dominick used to process payments he received from his clients. At the start of tax season, Dominick received an email from the card reader company regarding an important software update. Dominick was so busy with clients that he forgot all about the software update. In April, Dominick was notified once again that the software update was overdue. By the time Dominick updated the software, Yasmine's account information had already been compromised. Now Yasmine is suing him to recover the money hackers stole from her bank account.
Determine Dominick's tort liability by applying tort law to the facts of the case using the template below.
Who is the plaintiff?
Who is the defendant?
What is the tort that has been committed?
What are the four tort elements?
Review the fact pattern and explain how each of the four tort elements is represented.
Predict the outcome of the scenario. Explain the basis for your response.
Your Answer:
1. Yasmine
2. Dominick
3. Negligence
4. Duty, Breach of duty, causation and injury
5. Dominik's duty was to keep Yasmines banking information safe. Yasmine will have to prove that Dominik breached that duty by being negligent and not updating his software. Because of his negligence, this caused Yasmine's information to be compromised resulting in damages. This cause her bank account to be hacked resulting in money being stolen.
6. Dominick will be found guilty because it was his responsible or his duty to make sure the application, sites, and computer he used for his business were safe for his customers and would have the proper running software to keep his customers safe during transactions. He failed to do this when he ignored the notifications of security updating to the software he was using. He could have avoided this by simply updating the software to keep all his customers including Yasmine safe from hackers.
Question 5
2 / 2 pts
Assault and battery require the same intent to do which of the following?
Commit a fraud upon the plaintiff
Cause apprehension in the plaintiff
x Cause offensive contact with the plaintiff
Commit an invasion of the plaintiff's privacy
Question 6
2 / 2 pts
A manufacturer sold space heaters with faulty thermostats. As a result, several customers were injured when their space heaters caught fire. Under what legal theory will the space heater manufacturer be held liable for the customers' injuries?
Malpractice
Negligence
x Strict liability
Assumption of risk
Question 7
2 / 2 pts
Exaggerated seller's talk used to attract customers is known as
x puffery
duty
tort
Proximate
Question 8
4 / 4 pts
Homeowner Jacqueline is suing Clean Carpetz, Inc. over a black mold problem stemming from a failed attempt to shampoo her living room carpet. The jury found that Jacqueline was partly responsible for the black mold problem because she did not install proper under padding for her living room carpet. The jury also found Clean Carpetz, Inc. partly responsible for the black mold problem because it failed to adequately dry the shampooed carpet after cleaning.
Break down this case by applying tort law to the scenario.
Who is the plaintiff?
Who is the defendant?
What is the tort that has been committed?
What are the four tort elements?
Review the fact pattern and explain how each of the four tort elements is represented.
Predict the outcome of the scenario. Explain the basis for your response.
Your Answer:
1. Jacqueline
2. Clean Carpetz, Inc.
3. Negligence
4. Duty, breach of duty, injury and recognizable injury
5. Clean Carpetz had a job to Jacqueline to shampoo and dry her carpets properly. They breached this duty by not properly drying her carpet. This resulted in the development of black mold which can cause serious health issues. And often requires special expensive removal that is costly. The black mold is the recognizable injury due to the company's negligence.
6. The jury found Jacquline partly at fault. But the company failed to provide the services Jacqueline paid for. Therefore the company will be found guilty but the company may file an suit against the shampoo company under strict product liability. The company or product was not the issue but the shampoo caused black mold when not properly dried. The damages are totaled and then reduced according to their contribution to the injury. The Plaintiff will not recover damages if they are found to be either equally responsible or more responsible for the injury.
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