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torts

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M K

on 24 April 2014

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Transcript of torts

Torts
5 Original Intentional Torts
Battery
Intent:

Elements=
1. purpose
2. substantial certainty of consequence
3. can be transferred to any 5 original torts (Talmage v. Smith)
4. intent does not equal motive
Elements

1. Intent to cause a harmful/ offensive touching
2. harmful/ offensive touching
Case Law:

-insanity is not a defense
(McGuire v. Almy)
-Good faith mistake is not a defense
(Ranson v. Kitner)
-touching element can be an extension of the body
(Fisher v. Carrousel Motor Hotel)
-least touching of another in anger is considered a battery
(Cole v Turner)
-substantially certain harmful touching will occur
(Garrat v. Dailey)
Assault
Elements:

1. Intent to create apprehension of imminent contact
2. Reasonable apprehension of imminent contact
(Western Union Telegraph v. Hill)
-future threats do not constitute assault
-words alone do not constitute assault
*except ex. "your money or your life"
False Imprisonment
Elements:

1. Intent to restrain without justification
2. actual restraint
(Big Town Nursing Homes)
Case Law

-direct/ indirect restraint
(Whitaker v Sanford)
amish woman trapped on yacht
-words alone are insufficient unless under duress
(Hardy v LaBelles)
-no threat of future action
-restraint must be unlawful
-person imprisoned must know that they are being imprisoned
-if reasonable means of escape, no false imprisonment
-apparent authority can take place of physical restraint
*Doctrine of Apparent Authority
(Enright v Groves)
Trespass v. Trespass on Case
-direct/ forcible injuries
-tangible injuries/ not direct
Trespass to Chattels
Elements:

1. intentional disposses
2. impairment of condition
3. quality of value
4. deprivation of use
5. damage

(Compuserve v Cyber Promotions)
Trespass to Land
Elements:

1. Intentional/ unauthorized entry onto land of another
2.Actual invasion of the land
3. Actual harm is NOT required
(Dougherty v Stepp)
Case Law:

-land consists of space above land too
(Herrin v. Sutherland)
-failure to leave after permission expires is trespass
(Rogers v Board of Road)
snow fence
-does not need to personally come onto land
Conversion of Chattels

1. Interfere w/ plaintiff's possesory interest
2. Defendant's intent to assert control over chattel
3. Assertion of control
4. actual damages
Intentional Infliction of Emotional Distress
Elements:

1. Intent to cause severe emotional distress
2. extreme/ outrageous conduct
3. causal connection between conduct and distress
4. severe emotional distress
Case Law:

-"presence" is required
(Taylor v. Vallelunga)
dad gets beaten and daughter sees it
-words alone are unlikely to be sufficient
(State Rubbish Collectors v. Siliznoff)
*** creation of Intentional infliction of emotional distress
-mob case
-reasonable person standard of severe emotional distress
(Slocum v Food Fair Store)
U Stink!!!
Other Intentional Torts
Privileges/ Defenses to Intentional Torts
1.
Consent:
-conduct can indicate consent
(O'Brien v. Cunard)
-consent under false pretenses is void
(De May v Roberts)
-doctors must obtain express consent
*unless danger to life/ limb
(Mohr v Williams)
ear surgery
-custom can be determinative
*consent to violent game does not give consent to battery outside rules
(Hackbart v. Cincinnati Bengals)
-cannot be gained by deceit
-Deceit can be by omission
(Mohr v Williams)
*not a doctor
2.
Self Defense

-can use reasonable force to defend self v. threatened battery
-not in retaliation
-must be reasonable belief force is necessary to protect self against battery
-provocation does not justify self defense
-amount of force necessary fo protection
-retreat
- injury to 3rd party
3. Defense of Others
4.
Defense of Property

-no privilege to protect unoccupied house w/ devices capable of life threatening
(Katko v Briney)
-must use reasonable force in protecting property
5.
Recovery of Property
-Merchant's Privilege: privilege to detain person if reasonable suspicion and detention is reasonable
*extends to immediate vicintiy
(Bonkowski v Arlan's Department Store)
6.
Necessity
: the equity approach
-
Vincent v Lake Erie
7.
Authority of Law
-if authorized by law to do what he does, it is not a tort
-ex. cop
8.
discipline:
-parent/ child
-military
9.
Justification:
-under certain circumstances certain people have a right to commit acts that would otherwise be tortious
-
(Sindle v NYC Transit Authority)

****NO INTENT NEEDED****
- defendant's conduct imposes an unreasonable risk to another which results in injury
-omission to do something a reasonable man would do
To Whom is Duty Owed?
to the forseeable plaintiff

Forseeability Rule: sufficient likelihood of damage/ injury for a reasonable person to act to prevent such harm
-consequence must be forseeable for conduct to be unreasonable
-does not equal probable

-when precautions can be taken to lessen the risk and the expense not too extreme, it is necessary to take precautions
(Chicago Q.R. v. Krayenbuhl)
* railroad turntable and little child
-risk benefit analysis
-burden <injury x probability= liability (US v Carrol Towing)
*no bargee on the barge and it sank with the flour
care a person of ordinary prudence would take under the circumstances

- Objective standard
*intelligence level is irrelevant
(Vaughan v Menlove )

*what the average person would do

*custom can influence, but not determinative of what is reasonable
(
glass shower) (
Trimarco v Klein)

*emergency is a consideration
(Cordas v Peerless Transportation
Modified standard
No Modified Standard
-physical disability
(Roberts v State of Louisiana)
-child in age appropriate activity
(Robinson v Lindsay)
-intelligence
-lack knowledge
(delair v McAdoo)
-child in adult activity
(Robinson v Lindsay)
-mentall illness
(Breunig v American Family)
Reasonable Person Standard
Standard of Care
§ 291: if a reasonable man would recognize risk of harm, risk is unreasonale
§292: determine actor's conduct:
1. social value
2. chance social interest will advance
§293: magnitude of risk
1. social value of thing in danger
2. extent to invade
3. extent harm would result

-care of an ordinary member of the profession under circumstances

1. Objective Standard
2. Custom defines the standard of care
-must be an expert to testify as to their custom (
Heath v Swift Wings)
*someone who engages in an occupation must exercise the requisite degree o learning skill and ability
ex. specialist -reasonably prudent specialist
3. malpractice: negligence of a professional
-must be expert testimony that the practice was not recognized as valid
(Boyce v Brown)
4. Locality: "similar community under similar circumstances" test
(Morrison v McNamara)
5. Informal Consent: dr. must disclose what a reasonable patient would want to know before deciding on course of treatment
(Scott v Bradford)
-Elements of Informed Consent:
1. fully disclose material risks before consent to the proposed treatment
2. if patient was informed of all risks, would not have consented to the treatment
3. adverse consequences not made known occurred
6. Defense to Malpractice
-best judgment in good faith (Hodges v Carter
-must prove "but for"


3 Effects that statutory standard can be used in negligence trial

1. Negligence Per Se: negligence as matter of law, breach of duty is not a jury question, it arises from statute
2. Rebuttable Presumption: presumption of negligence if you violate a particular law, but the defendant gets chance to offer evidence that they were not negligent
3. Evidence of Negligence: fact that a defendant violated the law is just evidence that defendant was negligent

Look at:
1. Legislative Intent
2. member of class intended to protect
3. injury of the kind intended to protect
Breach
Elements:

1. Must be shown what in fact happened
2. from these facts that defendant acted unreasonable
Proving Negligence:
Direct = to the proposition to be proven
Circumstantial=
testimony + inference= proposition
-plaintiff must show actual or constructive notice of the unsafe condition and had time to correct it
-Jury Question:
Does the dangerous condition exist long enough for reasonably prudent person to discover it?
Cases:

-banana cases at train station, supermarket
-milk case
(Ortega v K Mart)
-pizza case
(Jasko v Woolworth)
"When business' operating methods are such that the dangerous conditions are continuous or easily forseeable, notice need not be proven
Res Ipsa Loquitur: The thing Speaks for Itself

Elements:
1. accident is such that as the ordinary course of things does not happen if those who have control use proper care
(Byrne v Boadle)

2. On facts, defendant was probably negligent because had exclusive control over instrumentality (
Mc Dougald v Perry)

3. Contributory negligence from third parties must be eliminated
(Larson v St. Francis)
Effects of Res Ipsa Loquitur:

1. create an inference of negligence
2. presumption of negligence (burden of production and persuasion shifts to defendant)
3. presumption of negligence (burden of production that defendant not negligent)
Causation
Actual Cause/ Cause in Fact
Test:

1. "But For": but for the defendant's negligent act/ omission, plaintiff's injury would not have occurred
-is act/ omission to act cause in fact of injury?
Yes
a.) substantial factor:
-when 2 or more actively operating forces, acting independently and not in concert with one another, combine to bring about harm
Case Law:

-2 negligent acts cause injury, though neither alone would have casued injury
(Hill v Edwards)
-2 acts at least one is negligent cause injury though either alone would casued injury
(Anderson v Minneapolis)
-2 negligent acts, one caused injury, situation prohibits plaintiff from determining which burden of persuasion switches to defendant
-2 or more are negligent and uncertain who caused injury, burden of proof moves to defendant.
-defendant must each prove they are not responsible
-if they cannot prove that it was not them, than they both can be held liable
(Summers v Tice)
Elements:
1. "But for" relationship between negligence and injury
2. level of proof= possible for prima facia case
3. level of proof to prevail= more likely than not
4. "substantial factor" articulation of cause in fact
5. concurrent causes (neither alone would cause injury
6. Burden shifts to defendant if unable to identify
No

-it is but for proven
Possible
Probable
More Likely than not
insufficient to satisfy burden of production
sufficient to satisfy burden of production
satisfies burden of persuasion
2. Possibility v Probabiliy:
-party w/ burden of persuasion must prove probability
-possibilities are not enough to break causal connections
(reynolds v texas)
-possibilities will not sustain verdicts, probabilities are necessary
(Kramer Service v Wilkins)
*Post hoc ergo propter hoc: negligence cannot be used to establish liability for negligence
*causal connection must be direct
*need probabilites
-totality of possibilities may be sufficient to rebut probable cause
3. Loss of Chance
(Herskovitz v Group Health Cooperative)
4. Joint/ Several Liability:
recover all damages from one defendant and defendant can get contribution from others
5. Market share approach: defendant is better equipped to bear the burden of liability than plaintiff
(Sindell v Abbott Labs)
Proximate Cause: where liability is cut off
-use forseeability to determine what is proximate
-is the relationship between the negligent act and injury so attenuated or tenuous that liability should not attach though the negligent act is a cause in fact of injury?
-usually a jury question
3 Tests to Limit Liability :
1. Immediate v Remote
-wrongful act must be close to injury that if act did not occur, injury would not either
(Atlantic Coastline v Daniels)
2. direct v indirect
3. forseeability v unforseeable
-"Egg shell theory": defendant is responsible for whatever happens as a result
*extends to mental illness and physical preconditions
(Bartolone v Jeckovich)
schizoprehnic body builder
-forseeablility will be considered for limiting liability
-the way the event occurs need not be forseeable as long as event itself is usually anticipated
-duty to forsee risk (wagonmound I and II)
-no liability to unforseen plaintiff, must be in danger zone
Zone of danger test:
Palsgraf v Long Island

1. forsight rule
-Cardozo: duty, plaintiff was outside zone of forseeable risk so no duty
-Andrews: dissents and says causation question is if defendant should be held liable is a jury question
3 circumstances for problems to arise:
1. extent of injury (Bartolone)
2. type of injury (Wagonmound)
3. person injured (Palsgraf)
4. linear distance
Intervenng Causes: causes between the cause and the injury
-independent/ dependent
-independent intervening causes may be superseding
-dependent are not superseding
-interfere w/ causation chain
-do not cut off all liability to defendant
Superseding Causes: trumps the original cause and cuts off all liability to defendant

-a criminal act is superceding if it is forseeable

-forseeable intervening acts = not superseding
-unforseeable intervening acts = superseding
-independent intervening= superseding
-dependent intervening = superseding
Case Law:
- conduct unforseeable, not liable
(Yun v Ford Motors)
-genereal injuries forseeable = liable
(Derdiarian v Felix Construction)
*intentional act of epileptic driver does not cut off causal relationship between defendant's negligence so not superseding
-an intervening act may not be superseding when risk of intervening act occurs is same risk would render actor negligent
-intervening intentional criminal acts relieve primary defendant of liability (
Watson v Kentucky)
Rescuer Doctrine:
-rescuer can maintain an action against a tortfeasor who puts another in danger if rescuer can show:
1. defendant's original fault caused peril/ appearance of peril for an individual
2. peril appeared imminent
3. reasonable (objective person standard ) would conclude peril
4. rescuer acted reasonably in attempting to rescue
5. defendant's fault was proximate cause of rescuer's injury
-professionals compensated to rescue may not make claim in some jurisdictions if rescue is within professional activity
Firefighter Exception: professional rescuers cannot use rescue doctrine unless tortfeasor intentionally exposed rescuer to risk
-applies in product liability to manufacturers
(Mc Coy v American Suzuki Motors)
Damages
1. Nominal
2. Compensatory: make someone whole again
-Special: out pf pocket expenses, medical expenses, lost earnings
-general: disability (past/ future) disfigurement
3. Punitive: objective is to punish defendant, must show defendant had malice
Defenses to Negligence:
1. Contributory Negligence: complete defense
-if plaintiff does not use ordinary care and thereby contributes to injury, defendant is not liable
(Butterfield v Forrester)
pole across road
***Last clear chance***
(Davis v Mann)
2. Express assumption of Risk: complete defense
-clearly and specifically states the intent to release defendant from liability
(Seigneur v National fitness)
3. Implied assumption of Risk: defendant must prove plaintiff had it
Defendant has to show:
1. Plaintiff had actual knowledge of risk
2. actual appreciation of magnitude of risk
3. voluntarily assumes risk
(Rush v Commercial realty)
plaintiff fell through floor in bathroom
4. Comparative Fault: replace contributory negligence in most jurisdictions (
McIntyre v Balentine)
1. Pure:
plaintiff's damages are reduced in proportion to percentage of the negligence attributed to him
2. Modified:
a. plaintiff not over 50% negligent
-damages are reduced in proportion to their negligence as long as it is not more the defendants
b. plaintiff not over 49% negligent
-plaintiffs damages are reduced in proportion to negligence as long as plaintiff's negligence is less than defendant
3. No last clear chance
4. Implied assumption of risk merged into comparative fault in many jurisdictions
(Blackburn v Dorta)
Expanding Tort Liability by Finding a New Duty
(Are you liable if you fail to prevent harm?)
-common law torts increase by judicial recognition of new duty
*divorce from contract and privity
-no recovery in tort for pure economic loss
* need injury to a proprietary interest (
State of Louisiana v M/V testbank)
PCP
-failure to aid
*common law nonrecognition is weakening
(J.S. & M.S. v R.T.H.)
child abuse
***contracts were the source of duty before, but new duty applies to liability without contract privity (
Mac Phearson v Buick Motors)
-duty to 3rd party purchaser
-if knowledge that thing will be used bu others and not immediate purchaser
-plaintiff is forseeable
Joint tortfeasors
1
. Joint/ Several Liability:

3 Instances to use:
1. acting in concert (joint plan to do dangerous activity) (
Bierczynski v Rogers)
2. common duty ( retail/ manufacturer)
3. independent actions create indivisible harm
-allows a plaintiff to recover all damages from one defendant and defendant can get contribution from the other defendants

Uniform Comparative fault:
When one defendant cannot pay, every party including plaintiff bears the burden

-in places with neither, plaintiff has to sue each defendant to get that share
2. Vicarious Liability
-liability imposed upon one person because of the act/ omission of another
-comparative negligence does not eliminate joint/ several liability (
Coney v JLG)
-pure comparative negligence eliminates joint/ several liability
(Bartlett v New Mexico)
-court apportions damages base on fault
(US v Carrol Towing)

1. respondeat Superior: master/ servant context
-employeer is liable for act by employee if within scope of his employment
2. Coming and Going Rule: an employee is outsidee scope of his employmen when engaged in his ordinary commute to and from work
(Bussard v Minimed)
pesticides and headache and accident
3. Slight Deviation Rule: is employee on a frolic, not part of employment or detour
(O'Shea v Welch)
-jury question
3. satisfaction and release
-plaintiff has burden and risk of settling
*plaintiff cannot recover from one or more defendants for an injury in which they have already recovered from another defendant
4. Contribution and Indemnity
-a right exercised by defendant to sue other tortfeasors who are fully/ partly responsible for plaintiff's injuries for contribution to damages
EXCEPT: intentional tortfeasors is not entitled to contribution
-defendant is entitile to sue other responsible parties for contribution
-satisfy plaintiff and let defendant figure out apportionment
-when concurrent negligence contributes to a tort, and they are not intentional wrongdoers, contribution is enforced (
Knell v Feltman)
Duty to act
Rstmt 2d section 314: duty to act for protection of oters= fact that actor realizes action on his part is necessary for another's aid, does not impose a duty

1. Generaly no legal duty is imposed on any person to affirmatively act for the benefit of others (
Hegel v Langsam)
2. assumption of duty to act by acting:
a. your failure of care increases risk of harm
b. harm suffered because reliance of your undertaking
3. Special Relationships create a duty Rstmt 2d 314 a
a. common carreier w/ passenger
b. innkeeper with guests
c. business / possessor of land open to public
d. employer with employees
e. school with students
(Duarte v CA)
f. custodian with those in custody
g. peril
4. Duty to control a 3rd party only if:
a. special relationship between you and the actor
b. special relationship between you and the person being harmed
(Tarasoff v Regents of University of CA)
psychiatrist and patient that killed girl
5. Nonfeasance: no duty
6. Misfeasance: duty of care required
Strict Liability: plaintiff does not have to prove negligence

Elements:
1. Absolute Duty to make safe
2. breach
3. breach was actual/ proximate cause of plaintiff's injury
4. injury/ damage to plaintiff

Rule: contributory negligence is not a defense because claims not based on negligence (Sandy v Bushy)
1. animals:
-strict liability for
a. wild animals
b. domesticated animals (no strict liability unless)
i. domesticated animal has dangerous propensity
ii. One bite rule: one bite no strict, but after one bite there is strict liability
2. Abnormally Dangerous activity Rstmt 519
-strict liabitilty even if actor used utmost care
Rstmt 520: factors to consider of activity is ultrahazardous
1. risk was great
2. harm could be great
3. inability to eliminate risk through reasonable care
4. extent to which activity not common
5. location is inappropriate
6. extent to which danger of activity outweighs value to community

-person involved in abnormally dangerous activity is strictly liable for any damage caused by that activity even though they were not negligent
(Rylands v fletcher)
-risk of harm is eliminated with use of reasonable care
(Miller v Civil Constructors)
-abnormally dangerous activity is about activity not substance (Indiana Harbor v
American Cyanamid)
-limit liability on dangerous activity
1. injuries that are not forseebale, not within the scope of what makes activity ultrahazardous
(Foster v preston Mill)
2. acts of God= person doing abnormally dangerous actiivty cannot be liable for negligence when damage is by act (
Golden v Amory)
3. assumption of risk: if person has full knowledge of animals bad tendencies and unnecessarily puts self in way of such an animal
(Sandy v Bushy)
Strict Liability
Products Liability
Purpose: to encourage manufacturers to make safe products, recompense injured consumers, and put liability on these who are better able to bear the burden of liability and cost
Causes of Action:
1.
Negligence

Basic Elements of negligence must be shown
-manufacturer has duty to exercise reasonable care if know a product will be dangerous to public if negligently made(
Mac Phearson v Buick)
-no privity needed b.c plaintiff is forseeable purchaser so the are owed a duty
2.
Express Warranty:

-ordinary person would be unable to discover a defect by usual and customary examination and has relied on manufacturer's representation, manufacture liable when goods casue damage due to noncompliance with the representation
(Baxter v Ford)
windshield wiper
3.
Implied Warranty:

-implied warranty of merchantability, product sold is reasonably fit for general purposes
-buyer is relying on seller's skill to sell him suitable goods
-a warranty is implied to protect ordinary man against the loss of important rights thru reliance of statements made by seller regarding its fitness
(
Henningson v. Bloomfield)
contract with fine print
4.
Strict Liability:
if something happens, your liable regardless of your fault

-he who puts defective product into stream of commerce should bear the risk, not the innocent buyer

Elements:
1. strict duty owed by commercial supplier
2. breach of that duty
3. actual/ proximate cuase
4. damage

Rise and Modification of Strict Liability:
manufacturer who put defectice prodcut into commerce should bear the risk
2. injured person against powerless to protect themselves (Rstmt 2s 402 a
Kinds of defects:
1.
manufacturer
:
-can be strictly liable when product deviates from design

elements:
1. product was defective when it left the manufacturing plant
2. no change in product
3. defect was proximate cause of the injury
2.
design:
-all products are the same but the all bear a feature whose design itself is defective and unreasonably dangerous
-use negligence utility test to see wheteher defendant failed to use reasonbale care to protect against forseeable and unreasonabe injury

Risk Utility:
1. usefulness
2. safety aspects
3. availability of a substitute
4. manufacturer's ability to eliminate the unsafe character
5. user's ability to avoid danger
6. user's anticipated awareness of danger
7. feasibilityof spreading loss (
O'Brien v Muskin Corp)
3.
warning:
the maker has neglected to give a waning of danger in the product and this lack of warning makes an oterwise safe product unsafe

1. Obvious danger: warning not needed
2. State of the art: risk was unknown and cannot know because of scientific knowledge (
Anderson v Owens)

3. Sophisticated User: user has knowledge, user should reasonably know
4. Learned Intermediary: best person to warn another of risk (ex. doctor)
Proof:
-most manufacturer defect cases can be proven with circumstantial evidence
1. a defect may be proven by circumstantial evidence when a preponderance of evidence shows accident due to defect and not another cause
(friedman v General Motors)

Defenses:
-comparative negligence, misuse of product can be partial defense to strict liability
(daly v general motors)
-manufacturere is liable for injuries caused by abnormal use of their products that are forseeable (
Ford Motors v Matthews)

Nuisance
-a type of harm, not a separate tort
-intentional interferences b.c defendant has been made aware that his conduct is interferring
Private:
-roots in property concerns
-nontresspassory invasion of another's interest in the private use and enjoyment of land

1. caveat emptor: buyer beware
-seller of property is not liable to the purchaser for private nuisnace b/c caveat emptor applies and risk shifts to purchaser
(Philadelphia Electric v Hercules)
2. Don't need negligence
-a lawful activity, a person can still be liable for nuisance though he tries to do all to prevent harm
(morgan v High penn)
3. lawful business in properly zoned area is not nuisance b/c of location
4. Operational incidents that fall outside of standard of operating a business is a nuisance
(Winget v Winn Dixie)
Public:

-unreasonable interference with right common to the public
-roots in criminal law
-unreasonable interference with a right common to the public

1. must have different kind of damages (
Philadelphia v Hercules)
2. brought by governmental units on behalf of the public
-can be brought by a private individual on behalf of the public if the individual has standing to sue

Standing to Sue:
1. individual suffered harm different from that suffered by other members of the public exercising the right common to the general public (special injury)
2. cannot be nuisance solely by reason of location of activity if both are lawful
3. nuisance remedies cna be in law
4. "coming to the nuisance" no longer a defense to nuisance claim but relevant in shaping equitable rewards (
Spur Industries v Del webb development)
5. "'Buying the nuisance" Rstmt 2d section 826 b
-remedies tat allow nuisance to remain
(Boomer v Atlantic Cement)
Defamation:
a communication that tends to damage a person's reputation in the popular sense

Cause of action: libel, slander, slander per se
-if statement is defamatory on its face is a law question for the judge
-if not defamatory on its face, it is a jury question

Defame on its face:
1.prove statement was made
2. communicated to a third party

Defamation elements:
1. defamatory words
2. publication
3. inducement (context)
4. colloquim (identity)
5. innuendo (meaning)
6. special damage (pecuniary)

Presumptions: statements false, reputation is damaged,
-defendant has burden to plead and prove the truth as defense
-damage for loss of reputation presumed if special damage is shown
conditional privilege defense: defendant's burden
malice destroys privilege and plaintiff's burden

Libel: printed defamation
1. if language used is open to two meanings, it is for jury to determine (
Belli v Orlando)
2. Substantial truth is an affirmative defense (
Killian v Doubleday)
3. When publication libels a large group, no cause of action (
Neiman Marcus v Lait)
4. colloquim; if you can prove that a reasonable person would be able to identify the person you have defamed, you have a cause of action
-more people who recognize you, the bigger the damages
(Bindrim v Mitchell)

Slander: must prove special damages
Slander per se: 4 kinds, don't need to prove special damages
1. major crime
2. disease
3. business trade
4. serious sexual misconduct

conditional privilege:
-former emploeer has privileg protecting communication with new employeer (Sindorf v Jacron)

Malice: publice official has to prove that libelous statement regarding performance made with malice in order to recover damages
Misrepresentation
Elements:
1. material misrepresentation
a. false statement about existing fact
b. cover up a defect
-no misrepresentation when no false statement is made, nondisclosure is not a false statement(swinton v whitinsvile savings bank)
c. omission
-(duty to disclose a known/ undiscoverable defect when they rely on information (Grifffith v Byers)
d. opinion that implies fact
2. scienter (intent)
-if honest belief in truth of statement, defendant not guilty of misrepresentation (Derry v Peek)
a. knowledge / belief matter is false
b. no confidence in accuracy of stated/ implied representation
c. no basis for his stated iplied representation
3. intends to cause reliance
4. justified reliance
-can't rely on oral representation when you have ample opportunity to discover falsity of statement (Williams v rank Buick)
-parties on equal footing, reliance not justified
5. pecuniary damages (plaintiff must have lost money)

-fraud can only be based on representation as to existing facts cannot consist of promises or conjectures (Mcelrath v Electric Investment
Negligent Misrepresentation:
does not require intention (scienter) or pecuniary damages
Elements:
1. relationship between parties from which a duty arises to provide correct information
2. knowledge that the information is desired for a serious purpose
3. reliance by plaintiff
4. injury caused by reliance on information
-can be liable for negligently making false statements that are relied upon by those to whim they have a duty (International Products v Erie
-publisher not liable for not investigating accuracy of text (Winter v G.P. Putnam)
-if you endorse a product for own economic gain, and encourage public to do so, can be liable to purchaser who relyed on endoresement (Hanberry v Hearst)
3rd Party Relied:
-accountants can be held liable for fraudulent misrepresentation (Ultramres Corp v Touche)
-accountants can be liabe to 3rd parties who rely on their financial statement that were negligently prepared (credit alliance v Arthur Anderson)
Elements for 3rd party reliance:
1. accountant has to know that it is going to be used for particular purpose
2. know a particular person was going to rely on those statements
3. must be some conduct that links 3rd party to accountant
Negligence
Reasonable Professional Standard
Statutory Standard
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