Key Legal Terms: Torts, Business Structures, and Dispute Resolution
Torts
- Tortfeasor: Person who commits a tort.
- Misappropriation: Using something uniquely associated with another individual without their permission; an invasion of privacy.
- Shoplifter’s Privilege: Legal right to detain a suspected shoplifter if there is reasonable suspicion, reasonable force is used, confinement is for a reasonable period, and the suspect is not humiliated.
- Malicious Prosecution: Intentionally providing false information that leads to someone’s arrest.
- Attractive Nuisance: Landowner liable for injuries caused by an attractive nuisance (e.g., a pool).
- Conversion: Exercising control over someone else’s property without their consent, even temporarily.
- Defamation: Making a false statement, knowing it’s false, that damages someone’s reputation and is communicated to a third party, resulting in injury.
- Slander vs. Libel: Slander is verbal defamation; libel is printed or broadcast defamation (e.g., TV).
- Actual Malice: A public figure must prove that the person making the defamatory statement knew it was false or had reckless disregard for the truth.
- Injurious Falsehood: Defamation of a business or its products.
- Fraud: Intentionally making a false statement about a material fact.
- Tortious Interference: Requires showing a contract existed, the defendant knew of the contract, the defendant induced a breach of the contract, and the plaintiff was injured.
Negligence
The most common tort, requiring:
- Duty of care
- Breach of duty
- Causation in fact (injuries would not have occurred otherwise)
- Proximate causation (foreseeable?)
- Actual injury
Defenses to Negligence
- Contributory Negligence: Plaintiff receives nothing if they contributed to the negligence.
- Comparative Negligence: Damages are reduced by the percentage of the plaintiff’s fault.
- Assumption of Risk: Plaintiff knowingly accepted the risk.
- Good Samaritan Law: Protects those who provide assistance in an emergency.
Strict Liability
No need to prove the defendant was negligent to win. Applies to:
- Ultra-hazardous activities
- Dram shop acts (bar liable if intoxicated person harms another)
- Respondeat superior (employer liable for employee’s actions)
- Strict product liability
Damages
- Compensatory Damages: To make the plaintiff whole, covering medical expenses, economic loss, and pain and suffering.
- Punitive Damages: To punish and deter the defendant.
Other Terms
- State-of-the-Art: The best technology available.
- Statute of Repose: Limits the time to file a claim regardless of when the injury occurred (e.g., a lawn mower with a 10-year shelf life causing injury in the 13th year).
- Contingency Fee: Lawyer gets a percentage of damages collected only if they win the case.
Business Structures
- Sole Proprietorship: Most common, no government approval needed, taxes on retained earnings, cannot transfer ownership.
- General Partnership: Two or more people or entities share in profits and losses. No government approval, partners are liable for each other, single taxation.
- Corporation: An artificial, intangible entity created pursuant to state law (e.g., Delaware). Requires filing with the state, has existed since ancient Greece, and can be costly.
- Fiduciary Duty: Act in the best interest of the corporation, not yourself.
- Alter Ego Theory: If you don’t treat the corporation as separate from yourself, you lose corporate protection.
- Limited Partnership: One general partner and one limited partner. Must go through the state. The limited partner invests money but cannot manage and has no personal liability.
- S Corp: Hybrid between partnership and C corp, no double taxation, only the shareholder pays taxes, no more than 100 shareholders who are American and people, one class of stock.
- Limited Liability Company (LLC): No personal liability, can choose tax structure, has members, cannot go public.
- Limited Liability Partnership (LLP): For lawyers, doctors, etc. No liability for a partner’s misconduct.
Agency
- Principal: Owes a duty of compensation, safe working conditions, reimbursement, and cooperation to the agent.
- Agent: Owes a duty to perform, be obedient, provide accounting, keep certain things confidential, and be loyal to the principal.
- Third Party: Consumer or vendor.
Dispute Resolution
- Mediation: A third party cannot propose resolutions, no judicial review, and participation can be unwilling.
- Arbitration: A third party makes the final decision.
Types of Arbitration
- Mandatory: Panel, discovery, application of rules of evidence, record required, de novo review (can still go to court after).
- Voluntary: No ability to review the case in court.
- Arbitration Clause: Prohibits class-action cases.
- Mediation-Arbitration: The arbitrator starts as a mediator and then imposes a decision on some unresolved issues.