A Typical Construction Site
A civil wrong, other than
breach of contract.
Money damages to
compensate for economic
losses, or losses stemming
Money damages awarded to
punish the defendant for
gross and wanton negligence
and to deter future
Whenever a company or individual acts unreasonably and causes injury, that person or company may be
liable for a tort. In some cases it doesn’t matter how careful or reasonable the company or individual
is—they may be liable for any injury resulting from their actions. Torts are an integral part of our civil law,
and in this chapter, you’ll learn about what kinds of torts exist and how to defend yourself or your
company from potential tort liability. Speciﬁcally, you should be able to answer the following questions:
What are torts?
What are intentional torts, and how does one defend against an accusation of one?
What is negligence and how does it aﬀect virtually all human activity?
What is strict liability and how does it aﬀect businesses engaged in making and selling
What are the arguments for and against tort reform?
Look at the picture in Figure 7.1. You’ve probably seen a similar picture of a construction site near
where you live, with multiple orange traﬃc cones (with reﬂective stripes so they can be seen at
night) and a large sign warning vehicles not to attempt to drive on the road. Now imagine the
picture without the traﬃc cones, warning signs, or caution tape. If you were driving, would you
still attempt to drive on this road?
Most of us would probably answer no, since the road is obviously under construction and
attempting to drive on it may result in severe damage to property (our vehicles) and personal
injury. Similarly, pedestrians, skateboarders, and bicyclists will likely steer clear of this road even if it
wasn’t clearly marked or roped oﬀ. So if the dangers associated with this construction are obvious,
why would the construction workers go through the time and expense of setting up the traﬃc cones, sign, and
The answer has to do with
law. A tort can be broadly deﬁned as a civil wrong, other than breach of
contract. In other words, a tort is any legally recognizable injury arising from the conduct (or nonconduct, because
in some cases failing to act may be a tort) of persons or corporations. The other area of civil law that corporations
have to be concerned about is contract law. There are several key diﬀerences between torts and contracts.
First is the realm of possible plaintiﬀs. In contract law, only persons that you have a contract with, or you are a
third-party-beneﬁciary to (such as when you are named the beneﬁciary to a life insurance policy and the company
refuses to pay the claim), can possibly sue you for breach of contract. In tort law, just about anyone can sue you, as
long as they can establish that you owe them some sort of legally recognized duty. The second key diﬀerence is