Business Law Negligence and Strict Liability

Business Law, Sixth Edition
© 2019 BVT Publishing. All rights reserved.
S-1
Chapter 9:
Torts: Negligence and
Strict Liability

S-2
Learning Objectives
• Understand the elements of negligence.
• Discern the degrees of negligence.
• Recognize negligence by professionals.
• Differentiate actual cause and proximate
cause.
• Explain the defenses to negligence.
• Understand the elements of strict liability.
• Discuss recent trends in product liability.
• Examine the defenses to strict liability.

S-3
9.0 In the News
Horrific Penn State Fraternity House Party Death
(8:47) http://bvtlab.com/Mj488
Eight members of a Penn State fraternity were
charged with involuntary manslaughter in the death
of a student after a night of heavy drinking.
• Discuss the possibilities of a civil suit.
• Is this a case of negligence on the part of the
students, the fraternal organization, the university, or
all of the above?
• Explain the elements necessary in order for
negligence to have occurred.

S-4
9.1 Negligence
Five basic elements of prima facie case
• Duty
• Breach of duty
• Breach of duty actually caused damage
• Breach of duty was proximate cause of
damage
• Damage or injury

S-5
9.1a Duty
• A person must meet certain standards
of conduct to prevent others against
unreasonable risks.
• Standards may vary, depending on
relationship of the parties
• Right-duty relationship

S-6
9.1b Due Care
Failure to exercise due care is
negligence.
• No tort liability for unavoidable
accidents
• Tort liability imposed for unreasonable
conduct
• Affirmative duty: speak or act to
prevent injury

S-7
9.1c Reasonable-Person Test (Slide 1 of 2)
Uniform standard of behavior
Test: what a reasonable person would
have done in the same or similar
circumstances
• Consideration of physical
characteristics
• Consideration of knowledge

S-8
9.1c Reasonable-Person Test (Slide 2 of 2)
Factors
• Community customs
• Emergencies
• Conduct of others
Role of Foreseeability
• Applies only to foreseeable actions

S-9
9.1c Critical Thinking
Case: Palsgraf
Landmark case in which Justice Cardozo
writes that a defendant is liable only if the
danger is foreseeable.
Palsgraf: Negligent Duty of Care (3:49)
http://bvtlab.com/2Zeaa
• Why did Palsgraf lose the case? What legal
concept did the court focus on in the opinion?
• How should a court make the determination of
foreseeability?

S-10
9.1d Degrees of Negligence
• Define the extent of risk involved.
• The greater the risk, the higher the duty
owed to others.
• Individuals who are paid to be careful
owe increased duty of care.

S-11
9.1e Negligence by Professional
Persons: Malpractice (Slide 1 of 2)
• Substantial increase in malpractice
suits
• Failure to exercise the degree of care
required of profession
• Not subject to reasonable-person
standard

S-12
9.1e Negligence by Professional
Persons: Malpractice (Slide 2 of 2)
• Standard stated in terms of
knowledge, skill, and judgment of
members in profession
• Submitted to jury as a question of
fact for decision

S-13
9.1e Critical Thinking
Oregon Supreme Court Hears Medical
Negligence Case (2:04)
http://bvtlab.com/4qd76
• What are the differences between a medical
malpractice case and other cases of
negligence?
• Discuss the monetary awards for malpractice
cases. Do they seem fair? Should they be
“lotteries” for the plaintiff?

S-14
9.1f Special Doctrines That
Show Negligence (Slide 1 of 2)
Res ipsa loquitur
• Negligence is presumed where the
defendant had control over the cause of
the injury, and it is logical that the
defendant is the only person or entity
that could be responsible.

S-15
9.1f Special Doctrines That
Show Negligence (Slide 2 of 2)
Negligence per se
• Negligence is established where an actor
violates a statute or local ordinance that
gives rise to the injury.
- Plaintiff must be the person intended to be
protected by statute.
- Plaintiff suffers harm the statute intended to
prevent.
- The breach of the statute caused the injury.

S-16
9.1g Actual Cause
• Plaintiff must show cause-and-effect
relationship.
• Defendants actions must have
caused plaintiff’s injury.
• Juries apply the “but for” test.
• Multiple actors: joint and several
liability is applied

S-17
9.1h Proximate Cause
• Requires that the injury be the
probable consequence of the wrong
• Injury was foreseeable from the
wrong.
– Foreseeability can be difficult.
• Superseding or intervening cause

S-18
• Injury or property damage must flow
from defendant’s negligence
• Compensatory damage awards
common
• Punitive damage awards only if
negligent behavior is egregious
9.1i Damages

S-19
9.1j Defenses to Negligence
Plaintiff’s contribution
• Contributory negligence: no recovery
if plaintiff contributed to injury
• Comparative fault: Plaintiff’s
contribution doesn’t bar recovery.
- Modified comparative fault
- Pure comparative fault
Assumption of the risk
• Voluntary assumption of a known risk of
harm

S-20
9.1j Critical Thinking (Slide 1 of 2)
Case: Martinez
Case poses question of negligence and duty:
whether the danger posed by a fly ball to
spectators at a baseball game was obvious.
Court followed case precedent and
longstanding “baseball rule”, finding defendant
owners complied with their limited duty by
providing adequately screened seats in
stadium.

S-21
• Was there obvious danger present in this
case? How so?
• What is the “baseball rule” discussed by the
court? Do you agree that the “baseball
rule” balances rights of stadium owners
with those injured by a fly ball?
9.1j Critical Thinking (Slide 2 of 2)

S-22
9.2a Theory of Strict Liability (Slide 1 of 2)
Historical perspective
• Dangerous animals
• Abnormally dangerous activities
• Product liability
- Role of privity
- Difficulty in showing negligence with
complicated products and manufacturing
techniques

S-23
9.2a Theory of Strict Liability (Slide 2 of 2)
Early dimensions of product liability law
• Role of Restatement (Second) Torts
• Elements under Section 402(A)
- Defective product
- Unreasonably dangerous because of the defect
- No modification in product
- Damage suffered using the product
• All parties within product’s distribution
chain are strictly liable

S-24
9.2a Critical Thinking
McDonald’s Hot Coffee case (3:46)
http://bvtlab.com/Gq8aE
This 1994 product liability lawsuit became a
flashpoint in the debate in the United States
over tort reform.
• Do you feel McDonald’s was negligent?
• What makes this a strict liability case?
• Discuss the punitive award for the case.
Does it seem fair?

S-25
9.2b Recent Trends in
Products Liability
Restatement (Third) Torts: product liability
• Manufacturing defects
• Design defects
• Defects in warnings

S-26
9.2b Critical Thinking
Case: Bunch
The courts found that the lack of a label on the
pool stating the possible consequences of
diving into the pool was a “substantial factor in
causing the injury.”
• Why were the labels inadequate?
• What do you believe would be adequate notice in
this case?
• Is the court articulating a different notice standard
for adults and children? If so, why?

S-27
9.2c Defenses
Comparative fault
• Apportionment of damage based on
fault of plaintiff.
State of the art
• Product manufactured according to best
and latest technology available
• Courts normally reject this defense.

Business Law Negligence and Strict Liability

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