1. CPCU 530 Tort Law Cases
Scott v Shepard, 96 Eng. Rep. 525 (1773) case on remoteness and the principle
ofnovusactusinterveniens as it related to the division between trespass and case.On October
28, 1770, Shepherd (defendant) threw a “lighted squib” (a parcel containing gun powder that was lit
on fire) into a marketplace. The squib landed near a stand where Yates was selling gingerbread. Willis,
afraid of the damage it would cause to Yates’ goods, picked up the squib and threw it across the room.
It landed near a stand owned by Ryal who was also selling goods. Ryal picked up the squib and threw
it again across the market. In so doing, the squib struck Scott (plaintiff) in the face and exploded. It
put out one of Scott’s eyes. Scott brought suit against Shepherd for trespass and assault.
28 U. S. C. §2671-2680 CRS Report for Congress, Federal Tort Claims , 12-11-2007.
Retrieved 3-13-2013 at
http://www.hhs.gov/hhsmanuals/logisticsmanual/Appendix%20R_CRS%20Report%20to%20Congress
,%20Federal%20Tort%20Claims%20Act,%20Order%20Code%2095-717.pdf,
http://www.law.cornell.edu/uscode/text/28/2671
Sullivan v New York Times, 376 U. S. 254 (1964) Respondent, an elected
official in Montgomery, Alabama, brought suit in a state court alleging that he had been libeled by an
advertisement in corporate petitioner's newspaper, the text of which appeared over the names of the
four individual petitioners and many others. The advertisement included statements, some of which
were false, about police action allegedly directed against students who participated in a civil rights
demonstration and against a leader of the civil rights movement; respondent claimed the statements
referred to him because his duties included supervision of the police department. The trial judge
instructed the jury that such statements were "libelous per se," legal injury being implied
without proof of actual damages, and that for the purpose of compensatory damages malice
was presumed, so that such damages could be awarded against petitioners if the statements were
found to have been published by them and to have related to respondent. As to punitive damages,
the judge instructed that mere negligence was not evidence of actual malice and would not
justify an award of punitive damages; he refused to instruct that actual intent to harm or
recklessness had to be found before punitive damages could be awarded, or that a verdict for
respondent should differentiate between compensatory and punitive damages. The jury found for
respondent and the State Supreme Court affirmed. Held: A State cannot under the First and
Fourteenth Amendments award damages to a public official for defamatory falsehood
relating to his official conduct unless he proves "actual malice" - that the statement was
made with knowledge of its falsity or with reckless disregard of whether it was true or
false. http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=us&vol=376&invol=254
Rylands v Fletcher, 1 Eng. Rule Case 235 (1868): landmark19c English case,
established the rule that a defendant is strictly liable when he damages another by an activity
unusally dangerous and inappropriate in relation to the surroundings in which it is carried out.
A reservoir constructed on Fletcher’s land broke through an abandoned mine shaft and flood the mind
of Rylands.
Henningsen v Bloomfield Motors Inc., 32 N. J. 358 (1960)Plaintiffs
Henningsen sued Defendant Bloomfield Motors, Inc., for breach of an implied warranty of
merchantability imposed by the Uniform Sales Act after Helen Henningsen was injured when the
steering mechanism of the car Plaintiffs purchased from Defendant malfunctioned. Defendant asserted
that the warranty had been disclaimed by the fine print on the back of the purchase contract. This is
also about font size with the disclaimer being 6 font vs 12 fonts on the front of the purchase
Donna M Kesot, CPCU ©2013 Chapter 7& 8

2. CPCU 530 Tort Law Cases
agreement. A disclaimer or limitation of liability shall not be given effect if “unfairly
procured,” that is, the consumer was not made understandingly aware of it or it was not
clear and explicit.
Rule: The general rule states that, in the absence of fraud, one cannot seek relief from the terms of a
contract that he fails to read before signing it. However, due to the gross inequality in bargaining
positions occupied by an automobile dealer and a consumer, a disclaimer of liability will not be
enforced if it is not brought to the purchaser’s attention or it is not clear and explicit. Here, Defendant
did not make Plaintiffs aware of the language on the back of the purchase contract, and Defendant
never addressed the language with Plaintiffs.
UCC, § 2-314: Implied Warranty: Merchantability; Usage of Trade.
(1) Unless excluded or modified (§ 2-316), a warranty that the goods shall be merchantable is implied
in a contract for their sale if the seller is a merchant with respect to goods of that kind. Under this
section the serving for value of food or drink to be consumed either on the premises or elsewhere is a
sale.
(2) Goods to be merchantable must be at least such as
(a) pass without objection in the trade under the contract description; and
(b) in the case of fungible goods, are of fair average quality within the description; and
(c) are fit for the ordinary purposes for which such goods are used; and
(d) run, within the variations permitted by the agreement, of even kind, quality and quantity
within each unit and among all units involved; and
(e) are adequately contained, packaged, and labeled as the agreement may require; and
(f) conform to the promise or affirmations of fact made on the container or label if any.
(3) Unless excluded or modified (§ 2-316) other implied warranties may arise from course of dealing
or usage of trade.
Donna M Kesot, CPCU ©2013 Chapter 7& 8