Importance of Tort Liability to Business

Introduction

Tort liability is vital in every business, regardless of whether it is a corporation, company, proprietary, or other entities (Cross & Miller, 2015). A person can suffer loss or injury while in the line of product manufacture or utilization (Lumen, N.d.). For instance, a fast-food business must follow safety and hygienic regulations and have an insurance policy to compensate the injured persons. Every businessperson must be mindful of tort liability and its impact on the business. Tort laws help to protect the consumers and recompensate those who incur losses (Lumen, N.d.). This work discusses the importance of tort liability to businesses.

Importance of Tort Liability to Business

A tort is a wrong that results in harm or loss to the injured person and leads to legal liability for the business that committed the tortious actions (Cross & Miller, 2015). Intentional torts occur when the entity or individual purposely involves themselves in activities that can lead to damage or injury to other people. For example, the intention to assault another person, defamation, or engaging in fraudulent activities (Cross & Miller, 2015). In some cases, carelessness is a significant cause of intentional torts. The intentional torts can either result in physical harm to an individual or involve interference with the person’s reputation, property, or economic interests. For every intentioned tort, the plaintiff must prove that the defendant’s actions cause the intended injury (Cross & Miller, 2015). The entity’s acts must have a direct consequence on the resulting harm on the injured person.

Strict liability happens when an entity engages in inherently dangerous actions for which the business can be liable regardless of how it carries out those acts (Cross & Miller, 2015; Lumen, N.d.). Product liability can result from a manufacturing defect, failure to give a warning, or a design error (Lumen, N.d.). For strict liability, the injured person needs to prove that the tort happened, and the business was responsible for the act. For example, some products put individuals at risk of harm or injury regardless of how the entity takes care to avoid the damage. Strict liability torts occur when the harm gets imposed on the wrongdoer without providing proof of direct fault or negligence (Cross & Miller, 2015; Lumen, N.d.). The business is liable even if the product did not intend to harm the customer. In this instance, the Federal Tort Claims Act rethe company compensates the plaintiff for the personal damages and injuries caused by the entity (Lewis, 2019).

Negligence torts occur when to business’ carelessness harms or injures another individual or when the entity fails to avail a duty owed to other people (Lumen, N.d.). Negligence occurs due to acts such as accidents, medical malpractices, and slips and falls. The business must exercise reasonable care in their actions, interactions, and dealings with others. Breaching the duty leads to a cause of harm due to negligence (Lumen, N.d.). The plaintiff must provide proof of the presence of the four elements. First, the business (defendant) owed a duty of care to the complainant (Cross & Miller, 2015). Second, the injured person demonstrates how the entity breached this duty (Cross & Miller, 2015). Third, there should be a causation to prove that the entity’s actions brought about the harm or injury. Finally, the injured person must prove the elements are legally recognizable injuries (Cross & Miller, 2015). At this point, the injured person receives the damages or compensation in the form of money since there is nothing else in tort law that can restore the plaintiff to the previous state (Lewis, 2019). The jury is left to evaluate the injury and determine the amount of money awarded to the injured person.

The tort law is essential to businesses because it presents a means of defending against economic damage resulting from unlawful deeds by other individuals or entities (Malescu Law, 2019). Tort liability aims at awarding monetary compensation to restore the injured parties to their prior conditions. Tort liability helps to reduce misconduct and negligence by companies or individuals (Malescu Law, 2019). Tort laws also minimize improper and intentional interference with the interests of other entities. This intrusion serves as an injury to a company concerning the potential or actual loss of customers, market share, partners, opportunities, and business relations (Malescu Law, 2019). Tort liability also protects against projected or future injuries. Therefore, tort laws require all firms or persons to exercise reasonable care in their dealings to avoid tortious acts like interference with contract, defamation, among others (Malescu Law, 2019). The damages or reimbursements awarded to the injured parties help to cover for economic losses. Besides, the remedy to tortious actions can also involve an injunction to other the business or individuals to cease their misconducts (Malescu Law, 2019).

Conclusion

Tort liability proves to be significant in business because it calls for all entities to exercise reasonable care to avoid involvement in tortious actions. Tort laws protect consumers from incurring losses and demands the defendants to pay for damages to the plaintiff provided that the torts are justifiable. Tort laws cover any acts by an individual or business that result from intentional interference, strict liability, and negligence. Tort law presents an approach through which parties can defend themselves from tortious actions by other persons or businesses. Tort liability encourages companies and individuals to only engage in legally abiding activities to avoid paying for any resulting damages.

References

Cross, F. B., & Miller, R. L. (2015). The Legal Environment of Business. Cengage Learning.

Lewis, K. M. (2019). The Federal Tort Claims Act (FTCA): A Legal Overview. Retrieved on January 30, 2020, from https://fas.org/sgp/crs/misc/R45732.pdf.

Lumen (N.d.) Legal environment: Tort Law, Liability, and Damages. Retrieved on January 30, 2020, from https://courses.lumenlearning.com/wmopen-introbusiness/chapter/tort-law-liability-and-damages/.

Malescu Law (2019). Importance of tort law in business. Retrieved on January 30, 2020, from https://malesculaw.com/importance-of-tort-law-in-business/.