In this article we discuss different types of business torts in the United States. But before we dive deeper into the subject it is important to understand the concept of business torts as it is used in the United States.
Business torts are wrongful actions performed against a business that causes harm to that business. Business torts can cause loss of profits, loss of reputation, loss of business competitive advantage, loss of market share, loss of clients and other types of losses. Business torts are also called economic torts because they are usually associated with losses of current or projected business profits.
Economic torts can be either intentional or can be caused by negligence or reckless behavior by individuals or other businesses. The vast majority of business torts in the United States are intentional rather than committed out of negligence or recklessness.
There are three basic types of torts in the United States – intentional torts, negligence and strict liability
Negligent torts filed by businesses or against businesses rest on allegations of negligence which in simple terms means failure to exercise care.
Intentional torts on the other hand are intentional acts committed by one party that causes harm to another.
Finally, strict liability torts are not based on fault but instead a party may be held responsible for an injury even if that person or company was not negligent. Strict liability usually applies to activities that are inherently dangerous such as blasting dynamite or keeping wild animals, but it also applies to defective products sold by manufacturers or vendors.
Among these torts, we can mention conspiracy, trade libel, intentional misrepresentation or fraud, negligence, trespass, conversion, intentional interference with contract and business relations, unfair competition, misappropriation and other civil offenses.
Conspiracy often occurs when two or more parties agree to act together with the purpose of committing an unlawful act that economically harms another party. Typically, conspiracy occurs in combination with a separate tort, such as fraud. For instance, two or more companies engage in a price-fixing scheme in order to drive a competitor out of the business. Another example is when a group of majority shareholders conclude to force out a minority group holder. In such instances, each conspirator is liable for the torts of the other co-conspirators.
Trade libel, often known as defamation, refers to false and damaging statements about the business. Businesses rely on their reputation, honesty and integrity towards their clients and other business partners. If these are harmed by a false statement, businesses can sue for recovery of financial losses. Commercial disparagement, for example, refers to derogatory statements made about a business that are intended to discourage others from dealing with the business. A defamation claim is only actionable if the statements in question are false. True statements, although they can damage a business, are protected speech under the Constitution of the United States.
Misrepresentation deals with false statements or claims. Misrepresentation can be done either negligently or intentionally. To prove intentional misrepresentation or fraud, the plaintiff must usually show that the defendant knew their statement was misleading. If a business entity is induced to enter into a transaction or a contract based on misrepresentation, the transaction and the contract could be voidable, and the business entity may also recover damages.
Businesses that suffer financial losses due to another’s misconduct may be able to bring a business tort claim and recover damages. The losses need not have occurred in the past. In many business torts cases, damages are sought for harm that may occur in the future, such as lost business opportunities. Losses can also extend beyond tangible assets and include harm to intangible assets such as reputation and relationships.
Because lawsuits involving business torts can be complex and involve multiple parties and multiple issues, it is important to seek legal assistance. Contact us, your international business attorney in Florida, to assist you with your business tort case and help you better understand the types of business torts.
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