Class 19 - Business Torts

Business Torts (Chapter 7)

Reminder: Read the book in conjunction with the brilliant, charismatic lectures. :)
Words of wisdom: You don't take classes; you take instructors.

Tort reform. Usually insurance companies want it. Granted, there are abuses of the system. But the tort system gives access to the courts to anyone because lawyers will take cases on a contingent basis. (Briskman brothers)

Intentional interference with contractual relations.
A 3rd party tries to interfer with one of the parties to a contract, usually to get them to break the contract. Ex: restaurant with a contract to buy meat from an exclusive distributor/supplier. Another supplier offers a lower price and to cover any breach of contract lawsuits. This is illegal and constitutes intentional interference with contractual relations.

Question: don't cell phone do this all the time? No. as long as the cell phone provider doesn't initiate the contact, they're not guilty of interference.

Interference with prospective advantage
No contract, but someone is trying to take away your potential business in a predatory behavior manner such as blocking the entrance to a store and urging customers to go to another vendor.

See AM77 Baking Company case.

Product Liability

Four bases for product liability suits
negligence
defectively made product
design defect
faliure to warn

Product liability laws were developed after the industrial revolution and the proliferation of technologically advanced products. Prior to that, you had to have a direct contract with the manufacturer, which was extremely rare. Therefore, there were very few suits. Even with a contract, the principle of caveat emptor - let the buy beware - applied and the buyer was expected to inspect the product and discover any defects before using it.

First major case: Mcpherson vs. Buick Motor company 1916
Wheel fell off.
It established the doctrine of Negligence in Tort. If a manufacturer produces a product negligently, they can be held liable for damage that results from that negligence, even without a direct contract or caveat emptor.

Still, the injured party must show:
1. that a duty of care is owed
2. act breach of duty of care (here, they didn't test wheels produced by 3rd party)
3. but-for
4. foreseeable

Strict liability under contract law - defect in the goods, damage was done. regardless of how careful the manufacturer was in production.
Big step for consumer protection.

Implied warranty - there is always an implied warranty that the product is safe and fit for its intended use.

First came about from food/drink. See Mazetti v Armour (pg 160 text). If it's in the original container, there's an implied warranty that it's safe to consume.

Express warranty - simple sales talk is not a warranty. saying or representation of any statements of fact about the product are considered an express warranty. Ex: rebuilt engine, low mileage, etc. See case of Baxter v Ford Motor (pg 160 text) - shatterproof glass was advertised, but not in warranties. Pebble hit the window and shattered the window, blinding the driver. The advertisement was determined to constitute an express warranty.