In the United States, business torts are a regular feature of commercial disputes and are litigated everyday across the country. In the context of business disputes, business torts claims sometimes lie at heart of the dispute and sometimes are simply a supplemental issue to a contract dispute.
In general, business torts refer to wrongdoing in a business setting or relationship that causes harm to the business. The harm to the business can be anything from loss of profits, loss of competitive advantages, loss of market share, loss of reputation, losses of current or projected business profits, loss of business clients, loss of intellectual property, and others. Business torts claims can be brought under the state law of each U.S. state but also under federal law. However, business torts are generally governed by state law. Some of the business torts most commonly asserted in commercial disputes include fraud (known also as intentional misrepresentation), tortious interference with contract or prospective business relations, business disparagement, and others.
Below we discuss the business torts most often encountered in Florida courts and the elements necessary to establish a certain business tort claim under Florida law:
- Fraud (or intentional misrepresentation). In order to establish a case for deceitful or fraudulent misrepresentations in Florida, the plaintiff must show that the defendant (1) made a misrepresentation, (2) defendant knew or should have known that the statement was false, (3) had an intent to induce reliance on the misrepresentation, (4) plaintiff’s reasonably relied on the false statement and (5) plaintiff was actually damages and suffered a harm as a result of his or her reliance on the misrepresentation or omission. Fraud can come in many forms, from cred card theft to forgery, and from misleading advertisements to unlawful possession and use of another person’s identity. Fraud can also include Tax fraud, Medicare/ Medicaid fraud, Corporate fraud, Federal fraud and others types of fraud. Common examples of fraud in a business setting are when a business seller misrepresents the company’s financial state to induce a potential buyer into purchasing the business or when a seller of real property fails to disclose a construction defect to a potential buyer.
- Tortious interference with contract or business relations. Under Florida law, in order to establish a cause of action for tortious interference with contract or business relations, the injured party must show that (1) a valid contract or business relation existed between plaintiff and a third party, (2) defendant knew of the contract or business relation, (3) defendant took actions intended to induce a breach of or disruption of the contract or business relation, (4) there was no legal justification for defendant’s actions and (5) plaintiff suffered damages.
- Intellectual property infringement. In the United States, the intellectual property of a company usually refers to patents, trademarks, trade secrets and copyrights. In order to establish a trademark infringement claim in court, plaintiff must prove that (1) it owns a valid trademark, (2) that it has priority or in other words that its ownership rights in the trademark are senior to that of the defendant and (3) the defendant’s trademark is likely to cause confusion in the minds of consumers about the source of the goods or services. In the case of patents, in order to prove a direct patent infringement, the plaintiff must show that defendant made, used, sold, offered for sale or imported the claimed invention. Regarding copyright infringement, copyright holder must establish a valid copyright and that original material was used illegally. Protection of trade secrets in the State of Florida is governed under the Florida Uniform Trade Secrets Act (FUTSA) and is codified at Florida Statutes §§ 688.001.
Whether brought under the common law or state or federal statutes, a business torts claim can jeopardize a business’ financial and reputational interests. Contact us, your business attorney in Florida, to assist you with your business torts case.
Malescu Law P.A. – Business Lawyers