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Business Torts

Key Takeaways:

  • Businesses can be held responsible for damage caused by unfair business practices.
  • There can be a narrow distinction between tortious business conduct and regular business competition.
  • The plaintiff in a business tort claim has to show actual economic damages.

Some business owners think all is fair in the world of business. However, the business community has certain standards, and stepping over the line can be considered unfair business practices. If another business does something to harm your reputation or cause you to lose customers, you may be able to file a civil tort claim to recover damages.

Civil business laws are different in every state. If you want to know about your business litigation options, talk to a business tort attorney for legal advice.

What Is a Business Tort?

A tort is a legal term for a wrongful action. A tort or civil wrong can provide a way for someone who suffered financial losses to recover compensation. In a civil lawsuit, a business that was wronged can recover financial compensation from the business that was responsible for the damage.

Business torts, or economic torts, can include financial losses, like:

  • Loss of business
  • Loss of market value
  • Damage to reputation
  • Theft of trade secrets

Business torts can involve negligent damage, like failure to keep certain information confidential. Business torts can also involve intentional wrongs, like making false statements about a competitor.

What Are Types of Business Torts?

There are many types of business torts, and they can involve sole proprietorships, small businesses, or international corporations. Common business torts can include:

  • Intellectual property infringement
  • Trade libel or defamation
  • Misappropriation of intangible assets
  • Fraudulent misrepresentation
  • Intellectual property theft
  • Anticompetitive practices
  • Tortious interference with business relationships
  • Unfair trade restrictions
  • Unfair competition
  • Breach of contract
  • Breach of fiduciary duty

How Do You Prove a Business Tort?

To prove another company is liable for unlawful business interference, you must prove that the other business actually harmed your company. For example, if a company claims they were harmed by tortious interference, they may have to prove the following elements:

  • You and the other business had an existing contract
  • The defendant intentionally acted to disrupt or cause a breach of the contract
  • Your business suffered financial damages

For example, a competing vendor knows of an existing contract between your business and a buyer. The competing vendor offers unreasonably low prices for the same products for the purpose of getting the buyer to breach its contract with you. If the buyer breaks the contract to buy the cheaper goods, you may have a claim for tortious interference.

What Damages Are Available in a Business Tort Claim?

There are different financial remedies available in business tort cases. Possible damages and compensation available in a business tort lawsuit may include:

  • Compensatory damages
  • Restitution
  • Lost profits
  • Requiring the party to fulfill the contract
  • An injunction stopping the defendant

What Are Defenses to Business Tort Claims?

Business tort claims can be tricky because there is a fine line between a wrongful action and something done in the interest of business. There are defenses to tortious interference and other business tort claims involving business disputes.

For example, lowering costs to attract other businesses away from competitors may not be interference. Instead, it can just be a business using its competitive advantage. In some situations, interference can excuse tortious conduct as long as there was a legitimate business interest.

It can also be a defense if the plaintiff did not suffer any actual harm. A plaintiff generally has to show there was actual monetary damages, not just a vague idea that they would have made more money without the defendant’s actions.

Business Torts Attorneys

If you are losing money because of another business’s actions, a civil tort claim can put an end to unfair business practices. On the flip side, if another business is suing you, consult a business tort attorney for help with your case.

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