What are business torts?
Business torts are wrongful acts committed against a business. These are done intentionally or through negligence or recklessness and create current or future financial losses. They often involve a competitor or even an employee. While they are not a criminal offense, they are civil offenses. When they happen, a business has no recourse but to file a civil suit in a court of law.
Filing a business tort
The plaintiff files the charges while the defendant defends themselves against accusations. Typically, the plaintiff needs to prove the following with a business tort:
- The defendant had a responsibility to take a fair course of action
- They did not uphold that responsibility
- The defendant’s caused measurable losses by the plaintiff
- The actions by the defendant were negligent, intentional or reckless.
Common types of business torts
Examples of this legal business matter include:
- Unlawful and deliberate meddling in the business affairs of others
- A restraint of trade where businesses or individuals do not enter into agreements with certain companies
- The theft of trade secrets or proprietary business information for purposes gaining an unfair advantage
- Fraudulent misrepresentation that intends to induce clients to enter into an agreement
- Commercial disparagement where the defendant spreads false information that causes harm to the defendant’s reputation
- The defendant intentionally publishes incorrect information about the plaintiff
Judges (as well as mediators or arbitrators) often need to determine the validity of the plaintiff’s claim and then, if appropriate, award damages. Economic losses are hard to determine, and keep in mind that the plaintiff needs to provide clear proof of this, but the courts will accept reasonable amounts they believe are calculated in good faith. At this time, the court may also issue an injunction that directs the defendant to cease the unlawful or offending action.
Business law attorneys can provide knowledgeable legal guidance in filing a business tort for the plaintiff or representing the defendant’s actions. Ideally, these disputes need not go to court, but sometimes filing a business tort with the court is the only recourse for the plaintiff.