An intentional tort is one in which the defendant intended to cause harm to the plaintiff by an act or failure to act. Many intentional torts are also crimes. Thus, we will address them as part of our economic analysis of criminal law. An unintentional tort refers to the situation in which someone has been harmed by someone else's act or failure to act which inadvertently caused the harm. The economic essence of tort law 1.
Tort law fills a gap in property law and contract law created by high transactions costs.
Note that in certain instances, transactions costs prevent parties from reaching agreements on how to avoid future conflicts over property rights or establishing a contract that allocates liability for future losses. Harms that occur outside of private agreements are externalities. Tort law induces injurers to internalize such harms by making them liable for any losses that are incurred, i.e., the injurer must compensate the victim when the proper level of care has not been exercised. This induces injurers to invest in the optimal level of precaution or safety. As the scope of perfect compensation has expanded so have the difficulties associated with assigning specific values to damages.