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Business Law - Tort Liability and Ethics Question

1. Is proof of a "bad motive" essential to imposing tort liability? Why or why not?

2. Tom Peters in his new book "Re-imagine" relates the case study of GE Power Systems. GE Power Systems used to be a provider of "manufactured boxes" for electricity - transformers, generators, turbines, etc. - commodities all. They changed their paradigm and determined that what they should be selling is systems and services. In other words, GE Power Systems re-engineered their model to "get a piece of the action whenever a switch was turned on or off from the Arctic to the Antarctic".

Peters goes on to say, "For what it's worth, such an idea was near the core of the Enron strategy as well ("clunky pipelines to "market makers") although GE Power Systems executed its strategy with a smidgen or two more integrity."

Do you agree with Peters' assessment of the Enron scandal? Why or Why not?

Solution Preview

1. Is proof of a "bad motive" essential to imposing tort liability? Why or why not?
The proof of bad motive is not essential to imposing tort liability. The reason is that the tort law applies even in case of negligence. If an act is committed in negligence and does not adhere to a minimum standard of care the tort law applies and it will compensate the person who has been harmed.
In addition, the tort law also recognizes strict liability in certain circumstances. In these cases bad motive is not the issue but on the bases of strict liability the tort law will compensate the party that has been harmed. A large number of tort cases relate to negligence. The issues range from duty to rescue, duty of care, proximate cause, standard of care, negligence in employment, negligence in entrustment and negligent ...

Solution Summary

Tort liability and ethics in business law is analyzed for GE Power Systems manufactured boxes for electricity. The Enron scandal and Peters' assessment is discussed.

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