Chapter 11 Business and the law of tort
Learning objectives
After studying this chapter you should understand the following main points:
■the nature of liability in tort and the types of harmful activity for which the
law of tort provides a remedy;
■circumstances in which liability is imposed without fault, e.g. strict liability
torts and vicarious liability;
■details of liability in negligence for defective goods and services;
■in outline, other torts relevant to business;
■the general and specific defences to an action in tort and the remedies
available where liability is imposed.330
In the last chapter we examined the scope of a business-
person’s liability in contract for the goods and services
he or she provides. In this chapter we will consider how
the activities of business organisations may give rise to
liability in tort.
Tortious liability
A tort is a civil wrong. Unlike the obligations voluntar-
ily accepted by the parties to a contract, a tort consists of
the breach of a duty imposed by the law. The law of tort
seeks to provide a legal remedy for the victims of certain
forms of harmful conduct. Tort duties are owed to a
wide range of persons and are not dependent on the
existence of a contractual relationship. Although this
area of law is often referred to as the law of tort, in
reality a number of distinct areas of tortious liability
have been developed to protect people from the many
forms of wrongful conduct which may occur in modern
society. So it is probably more accurate to refer to a law
of torts. Examples of the kinds of harmful conduct
which the law provides protection against include:
■interference with a person’s ownership or possession
of land or personal property, e.g. the torts of trespass
to land and trespass to goods;
■injury to business or personal reputations, e.g. tort of
defamation;
■interference with a person’s use and enjoyment of
land, e.g. tort of nuisance;
■damage to land, e.g. tort of negligence, the rule in
Rylandsv Fletcher;
■personal injury and death, e.g. torts of negligence and
trespass to the person;
■damage to commercial interests, e.g. torts of de-
ceit, passing-off, inducement of breach of contract,
conspiracy.
Each tort is governed by its own special rules covering
such matters as the basis of liability, defences and rem-
edies. General principles relating to these issues are set
out below.Basis of tortious liability
Liability in tort is essentially ‘fault-based’. This means
that a claimant must prove that the defendant acted
intentionally or negligently and was, therefore, blame-
worthy. The defendant’s reasons or motive for commit-
ting a wrongful act are generally not relevant to liability
in tort. However, the presence of malice is relevant to
some torts: malice is an essential ingredient of some