Business Law Essay

MB610 Business Law

Tort Law

Matthew Rensch

November 6, 2014

In every society, throughout history, there have been two main classifications of rules that govern behavior. These rules were adopted so that society could function in a safe and consistent manner. The two classifications are criminal laws and Civil laws. Criminal laws are defined by Cornell University Law School's Legal Information Institute as "...Prosecution by the government of a person for an act that has been classified as a crime." While Civil laws, also known as Tort laws are defined as "A civil wrong which can be redressed by awarding damages."

Criminal laws are passed and enforced in order to protect all members of society equally. Punishment is the main emphasis. Offenders are prosecuted by the local, state, or federal government and are presumed innocent until proven guilty. The burden of proof rests with the prosecution to prove the defendant's guilt either beyond a reasonable doubt, or by a preponderance of the evidence, depending on the violation. Punishments for criminal offences can range from fines and imprisonment to death. The severity of the punishment is dependent on the crime committed.

Tort laws are created to protect the rights and outline the duties among the members of society. Tort laws are designed to resolve disputes between individuals or organizations where monetary compensation may be awarded for the alleged wrong doing. The burden of proof rests with the plaintiff, the party who makes the accusation, to convince a judge or jury that they were wronged in some way and that they deserve compensation.

Tort laws, and the litigation that comes from the enforcement of them, are a major consideration when a business makes a decision about the products they produce or services they offer. There are a number of court cases, some frivolous, some not, that can be used as examples of ways businesses have been impacted by tort laws and the lawsuits that have been filed against them.

One such lawsuit was Liebeck v. McDonald's Restaurants. In 1992 Stella Liebeck purchased a cup of coffee from an Albuquerque are McDonald's Restaurant. While attempting to add cream and sugar to the coffee, she held the cup between her knees and removed the lid. The cup slipped causing the hot coffee to spill onto her lap. She sued McDonald's for $20,000, the amount needed to cover medical expenses and lost wages. McDonald's countered with $800. Ms. Liebeck rejected McDonald's offer and the case went to court. A jury awarded Ms. Liebeck $200,000 in compensation and $2.7 million in punitive damages. This case, and the original award, gave rise to the term "jackpot justice". However, not all is what it seems in this case.

Coffee is supposed to be hot. Placing a hot cup of coffee between your knees when you are driving may not be the best thing to do. Taking the lid off of a hot cup of coffee, which is placed between your knees, in a moving vehicle is just inviting trouble. It stands to reason that Ms. Liebeck shares most, if not all, of the blame in what happened. That is what the judge and jury decided when the original award was reviewed. Ms. Liebeck was found to be partially responsible, so the compensatory award was reduced to $160,000 and the punitive award was reduced to $480,000.

Critics of this lawsuit claim that Ms. Liebeck paid for hot coffee and that she got what she paid for. They also feel that Ms. Liebeck was careless when she placed the cup of coffee between her knees in a moving vehicle. Ms. Liebeck herself admitted that she was partially to blame for her injuries. However, she felt that McDonald's was more to blame because they knew they were serving coffee that was dangerously hot and that they continued to sell it even though they had already settled similar complaints in the past.

Applying the tort of product liability, the 2 main issues are straight forward. Ms. Liebeck was asking the court to determine if McDonald's had been negligent when it served hot coffee to its customers and did this "defective Product", the hot coffee, cause the injuries that Ms. Liebeck sustained. According to Twomey & Jennings "when defective goods result in damages or injury to the buyer or other parties, the UCC and tort law provides remedies." (Twomey & Jennings, 2014, p. 472). Ms. Liebeck was making the argument that the coffee's temperature was too hot, thus making it a defective product, and that McDonald's either did know, or should have known the extreme temperature could accidentally