Intership Report

Laws of Business OR affecting Business

Introduction to Laws:

A law is a standard or rule established by a society to govern the behavior of its members. Laws have a direct and substantial impact on how business firm conduct various activities.

Business Law Definition 

Business Law (also referred to as Commercial Law) governs the transactions between businesses. This includes business formation; litigation; contracts; mergers and acquisitions; commercial leasing; and consumer protection. Business law deals primarily with the definition of rights and responsibilities, as opposed to the enforcement of laws. Business law and commercial law encompass several overlapping issues. The Uniform Commercial Code (UCC) is the primary governing authority for commercial transactions. 

Other specified legal areas have developed that are types of business or commercial law. They include Banking, Bankruptcy, Consumer Credit, Contracts, Debtor and Creditor, Landlord-Tenant, Mortgages, Negotiable Instruments, Real Estate Transactions, Sales and Secured Transactions.

Laws Affecting Business:

Numerous and varied laws regulate the activities of all business and everyone involved in the business, from owner to manager to employee. In this section we discuss a major business law category which involves:

1. The Law of Torts
2. The Law of Contract
3. The Law of Sales
4. The Law of Agency
5. The Law of Property
6. The Law of Bankruptcy
7. The Law of Negotiable Instrument
8. The Law of Employment
9. The Law of Environmental
10. The Law of Insurance & Liability

This section has information on the legal issues involved in contracts and agreements. To begin, select an item from the list below.

1) The Law of Torts:

A body of rights, obligations, and remedies that is applied by courts in civil proceedings to provide relief for persons who have suffered harm from the wrongful acts of others. The person who sustains injury or suffers pecuniary damage as the result of tortuous conduct is known as the plaintiff, and the person who is responsible for inflicting the injury and incurs liability for the damage is known as the defendant or tortfeasor.

Three elements must be established in every tort action. First, the plaintiff must establish that the defendant was under a legal duty to act in a particular fashion. Second, the plaintiff must demonstrate that the defendant breached this duty by failing to conform his or her behavior accordingly. Third, the plaintiff must prove that he suffered injury or loss as a direct result of the defendant's breach.

The law of torts is derived from a combination of common-law principles and legislative enactments. Unlike actions for breach of contract, tort actions are not dependent upon an agreement between the parties to a lawsuit. Unlike criminal prosecutions, which are brought by the government, tort actions are brought by private citizens. Remedies for tortuous acts include money damages and injunctions (court orders compelling or forbidding particular conduct). Tortfeasors are subject to neither fine nor incarceration in civil court.

The word tort comes from the Latin term torquere, which means "twisted or wrong." The English Common Law recognized no separate legal action in tort. Instead, the British legal system afforded litigants two central avenues of redress: Trespass for direct injuries, and actions "on the case" for indirect injuries. Gradually, the common law recognized other civil actions, including Defamation, libel, and slander. Most of the American colonies adopted the English common law in the eighteenth century. During the nineteenth century, the first U.S. legal treatises were published in which a portion of the common law was synthesized under the heading of torts.

Over the last century, tort law has touched on nearly every aspect of life in the United States. In economic affairs, tort law provides remedies for businesses that are harmed by the unfair and deceptive trade practices of a competitor. In the workplace, tort law protects employees from the intentional or negligent infliction of emotional distress. Tort law also helps regulate the environment, providing remedies against both individuals and businesses that pollute the air, land, and water to such an extent that it amounts to a Nuisance.

Sometimes tort law governs life's most intimate relations, as when individuals are held liable for knowingly transmitting communicable diseases to their sexual partners. When a loved one is killed by a tortious act, surviving family members may bring a Wrongful Death action to recover pecuniary loss. Tort law also governs a wide array of behavior in less intimate settings, including the operation of motor vehicles on public roadways.

The law of torts serves four objectives. First, it seeks to compensate victims for injuries suffered by the culpable action or inaction of others. Second, it seeks to shift the cost of such injuries to the person or persons who are legally responsible for inflicting them. Third, it seeks to discourage injurious, careless, and risky behavior in the future. Fourth, it seeks to vindicate legal rights and interests that have been compromised, diminished, or emasculated. In theory these objectives are served when tort liability is imposed on tortfeasors for intentional wrongdoing, Negligence, and ultra hazardous activities.

Torts, sometimes called delicts, are civil wrongs. To have acted tortuously, one must have breached a duty to another person, or infringed some pre-existing legal right. A simple example might be accidentally hitting someone with a cricket ball.^[36] Under the law of negligence, the most common form of tort, the injured party could potentially claim compensation for his injuries from the party responsible. The liability for negligence ... is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay ... The rule that you are to love your neighbor becomes in law, you must not injure your neighbor; and the lawyer's question, Who is my neighbor? Receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor. Another example of tort might be a neighbor making excessively loud noises with machinery on his property.^[39] Under a nuisance claim the noise could be stopped. Torts can also involve intentional acts, such as assault, battery or trespass. A better known tort is defamation, which occurs, for example, when a newspaper makes unsupportable allegations that damage a politician's reputation. More infamous are economic torts, which form the basis of  labor law in some countries by making trade unions liable for strikes, when statute does not provide immunity.

Consent is a defense to virtually every intentional tort. The law will not compensate persons who knowingly allow someone to injure them. However, consent must be given freely and voluntarily to be effective. Consent induced by coercion, duress, Undue Influence, or chicanery is not legally effective. Nor is consent legally effective when given by an incompetent person. Consent to intentional torts involving grievous bodily harm is also deemed ineffective in a number of jurisdictions.

Negligence

Most injuries that result from tortuous behavior are the product of negligence, not intentional wrongdoing. Negligence is the term used by tort law to characterize behavior that creates unreasonable risks of harm to persons and property. A person acts negligently when his behavior departs from the conduct ordinarily expected of a reasonably prudent person under the circumstances. In general, the law requires jurors to use their common sense and life experience in determining the proper degree of care and vigilance with which people must lead their lives to avoid imperiling the safety of others.

Not every accident producing injury gives rise to liability for negligence. Some accidents cannot be avoided even with the exercise of reasonable care. An accident that results from a defendant's sudden and unexpected physical ailment, such as a seizure or a blackout, generally relieves the defendant of liability for harm caused during his period of unconsciousness. However, defendants who have reason to know of such medical problems are expected to take reasonable precautions against the risks the problems create. In some jurisdictions unavoidable accidents are called acts of god.

Assumption of Risk is another defense to negligence actions. This defense prevents plaintiffs from recovering for injuries sustained as a result of a relationship or transaction they entered with full knowledge and acceptance of the risks commonly associated with such undertakings. Assumed risks include most of those encountered by spectators attending sporting events. However, the law will not assume that individuals accept the risk of intentionally inflicted harm or damage, such as injuries resulting from Assault and Battery.

Strict liability:

In some cases tort law imposes liability on defendants who are neither negligent nor guilty of intentional wrongdoing. Known as Strict Liability, or liability without fault, this branch of torts seeks to regulate those activities that are useful and necessary but that create abnormally dangerous risks to society. These activities include blasting, transporting hazardous materials, storing dangerous substances, and keeping certain wild animals in captivity.

A distinction is sometimes drawn between moral fault and legal fault. Persons who negligently or intentionally cause injury to others are often considered morally blameworthy for having failed to live up to a minimal threshold of human conduct. On the other hand, legal fault is more of an artificial standard of conduct that is created by government for the protection of society.

Persons who engage in ultra hazardous activities may be morally blameless because no amount of care or diligence can make their activities safe for society. However, such persons will nonetheless be held legally responsible for harm that results from their activities as a means of shifting the costs of injury from potential victims to tortfeasors. As a matter of social policy, then, individuals and entities that engage in abnormally dangerous activities for profit must be willing to ensure the safety of others as a price of doing business.

Consumers who have been injured by defectively manufactured products also rely on strict liability. Under the doctrine of strict Product Liability, a manufacturer must guarantee that its goods are suitable for their intended use when they are placed on the market for public consumption. The law of torts will hold manufacturers strictly liable for any injuries that result from placing unreasonably dangerous products into the stream of commerce, without regard to the amount of care exercised in preparing the product for sale and distribution and without regard to whether the consumer purchased the product from, or entered into a contractual relationship with, the manufacturer.

Causation

Causation is an element common to all three branches of torts: strict liability, negligence, and intentional wrongs. Causation has two prongs. First, a tort must be the cause in fact of a particular injury, which means that a specific act must actually have resulted in injury to another. In its simplest form, cause in fact is established by evidence that shows that a tortfeasor's act or omission was a necessary antecedent to the plaintiff's injury. Courts analyze this issue by determining whether the plaintiff's injury would have occurred "but for" the defendant's conduct. If an injury would have occurred independent of the defendant's conduct, cause in fact has not been established, and no tort has been committed. When multiple factors have led to a particular injury, the plaintiff must demonstrate that the tortfeasor's action played a substantial role in causing the injury.

Second, plaintiffs must establish that a particular tort was the proximate cause of an injury before liability will be imposed. The term proximate cause is somewhat misleading because it has little to do with proximity or causation. Proximate cause limits the scope of liability to those injuries that bear some reasonable relationship to the risk created by the defendant. Proximate cause is evaluated in terms of foresee-ability. If the defendant should have foreseen the tortuous injury, he or she will be held liable for the resulting loss. If a given risk could not have been reasonably anticipated, proximate cause has not been established, and liability will not be imposed.

When duty, breach, and proximate cause have been established in a tort action, the plaintiff may recover damages for the pecuniary losses sustained. The measure of damages is determined by the nature of the tort committed and the type of injury suffered. Damages for tortuous acts generally fall into one of four categories: damages for injury to person, damages for injury to Personal Property, damages for injury to real property, and Punitive Damages.

Damages:

Personal injury tort victims must normally recover all their damages—past, present, and future—during a single lawsuit. Damages may be recovered for physical, psychological, and emotional injury. Specifically, these injuries may include permanent disability, pain and suffering, disfigurement, humiliation, embarrassment, distress, impairment of earning capacity, lost wages or profits, medical costs, and out-of-pocket expenses. Courts typically rely on Expert Testimony to translate such losses into dollar figures.

Plaintiffs suffering damage to personal property must elect between two methods of recovery. First, plaintiffs may elect to recover the difference between the value of the property before the tort and the value of the property after it. Second, plaintiffs may elect to recover the reasonable costs of repair for damaged personal property. However, if the property is destroyed, irreparable, or economically infeasible to repair, damages are measured by the replacement value of the property. Persons who are temporarily deprived of personality may sue to recover the rental value of the property for the period of deprivation.

Damages for injury to real property may be measured by the difference in the realty's value before and after the tort. Alternatively, plaintiffs may elect to recover the reasonable costs of restoring the property to its original condition. In either case plaintiffs may also recover the rental value of their property if its use and enjoyment has been interrupted by tortuous behavior. Mental, emotional, and physical harm that is sustained in the process of a tortuous injury to real property is compensable as well.

Punitive damages, called exemplary damages in some jurisdictions, are recoverable against tortfeasors whose injurious conduct is sufficiently egregious. Although punitive damages are typically awarded for injuries suffered from intentional torts, they can also be awarded against tortfeasors who act with reckless indifference to the safety of others. Because one purpose of punitive damages is to punish the defendant, plaintiffs may introduce evidence regarding a tortfeasor's wealth to allow the jury to better assess the amount of damages necessary for punishment. Such evidence is normally deemed irrelevant or prejudicial in almost every other type of damage claim.

In addition to damages for past tortuous conduct, plaintiffs may seek injunctive relief to prevent future harm. Manufacturing plants that billow smoke that pollutes the air, companies that discharge chemicals that poison the water, and factories that store chemicals that migrate through the soil create risks of injury that are likely to recur over time. In tort law, operations that produce recurring injuries like these are called nuisances. If the harmfulness of such operations outweighs their usefulness, plaintiffs may successfully obtain a court order enjoining or restraining them.