Business law fundamentals and applications

Business Law

Standford Engineering and Cornell Code market competitive software products. Standford launched an advertising campaign claiming that Cornell did not test its software, but rather sold to customers, allowing them to find bugs. Cornell knows this is false, but loses sales.

On what legal grounds could Cornell sue Stanford.

Legal Issues -- an intentional tort means that a body has done something knowingly to cause indutry to the personal or business interests of another. The advertisement is malicious intent, misrepresenation and defamation.

Defamation requires proof that a false or defamatory statement was made about others, implying fact. Breacking this in writing, video or other permanent forms is libel. One of the overall issues about this is the analysis of the wording of the advertisement -- does it appear that it is a statement of fact or one of opinion. Opinion statements are usually not actionable for suit since they are protected in the First Amendment.

However, in this case we will assume that Standford published this claim as a known fact in its advertisement, and that these statements were communicated to a wide audience (the public). A business must count on the reputation it engenders to its customers, and be able to show quantitatively that as a result of the causation (a) there was damage to sales (B). It is likely that Cornell will need to prove customer's read the ad and opted not to purchase the product because the client was wary of "untested products." Cornell must then prove special damages to establish that Stanford was libelous through actual economic losses. This may be mitigated in this case due to the slander per se ruling, which states if a state is made "that another committed improprieties while engaging in a profession or trade," no other damange proof may be required. Not testing a product that could conceivably damage a customer's computer system or business operation would be fraud, therefore Cornell has grounds for suit (Clarkson, et.al., p.123).

Dan is a driver for EZ Delivery. He leaves the vehicle's motor running in neutral and forgets to set the parking brake. The truck rolls, crashes into a gas pump, ignites a fire and spreads to a construction site. A burned wall collapses onto a crane which falls and injures Flo, a bystander.

Issue -- on what legal grounds could Flo recover damages from Dan.

Legal Issues -- Clearly, Dan was the actus reus, or specific instrument of an action in which other events flowed. It is not just Flo that can recover damages, but the gas station, the construction company and/or tenant, and the owner of the crane. While Dan did not plan the actions, he was liable for deliberate conduct regarding the events; he was reckless in that he knew (we assume he has passed a valid driver's test) that one should not leave a vehicle running and without an emergency brake.