Clarifying Tort Liability

Course: Retirement Planning
Lesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners

Student Question:

Hi-

I have a few questions regarding tort liability.

  1. Negligence is Tort Liability? 
  2. Why isn’t it contractual? 
  3. Are all torts criminal in nature?

Instructor Response:

Good questions here. See below for my response to each.

  1. Yes
  2. Tort law and Contract law are two different areas of civil law. Contract law deals with the responsibility of the parties to the contract to perform as specified by the contract while tort law deals with negligence.
  3. No. For example, unwanted touching of another person is a criminal tort while failure to use due diligence when preparing a client’s financial plan may be a civil tort.