Business Torts

The legal term “tort” refers to a civil violation in which one person causes damage, injury, or harm to another person. Such violations may occur either due to intentional actions, a breach of duty, or a violation of certain strict liability statutes.

The individual who commits the civil violation is referred to as the “tortfeasor” or “defendant,” and they incur what is known as tort liability. This means that the tortfeasor or defendant may be on the hook to reimburse the victim for any harm that they may have caused.

Additionally, under most tort laws, the injuries suffered by the plaintiff (i.e. the party that suffered the damages or harm) do not have to be physical in order for the tortfeasor to be found liable. Other types of harm that a tortfeasor may be liable for could include emotional distress, loss of earning capacity, loss of income, or even statutory damages.

Tort law is a broad category of laws that cover civil lawsuits and claims. The purpose of tort laws is to compensate victims for any losses resulting from the tortfeasor’s violations, as well as to deter or discourage the tortfeasor from repeating the civil violation in the future.

Torts can typically be classified into one of three broad categories:

1. Strict Liability Torts: These are torts that involve hazardous materials that are dangerous in and of themselves;
2. Unintentional Torts: These are torts that include the legal theories such as negligence; and
3. Intentional Torts: This category of torts include intentional harms upon the plaintiff, such as civil battery.

As torts are classified under civil law as opposed to criminal law, there are many torts that may involve conduct that is not necessarily illegal in nature. However, the conduct still may cause harm or economic injury to another person. For example, in the case of torts in a business setting, there may not be a criminal act associated with the damages.

A business tort is a legal violation that involves wrongdoing that has occurred in a business setting or business relationship. This type of tort typically covers legal conflicts that involve unacceptable and intentional interference with another party’s business. Occasionally, business torts overlap with contract law, but it may also involve tort law.

For instance, if a party suffers economic harm as a result of a breach of contract, they may sue the responsible party under contract law. However, in the case of a third party intentionally interfering with two parties’ business relations, such as intentional interference with existing agreements or negotiations, the business that was harmed may sue the third party under tort law.

Tort law may also be involved in cases of copyright infringement or damaging a business’ property in some way.

What Are Some Examples of Business Torts?

As mentioned above, the primary legal theory by which businesses sue is for breach of contract, which falls under the umbrella of contract law. However, there are numerous ways in which a business may sue another party under the umbrella of tort law.

Examples of common torts in business include, but are not limited to:

• Wrongful Interference: Wrongful interference is a tort violation that occurs when a party intentionally and wrongfully interferes with the legitimate business interests of another party.
  • For example, when a third party tortiously interferes with the contract negotiations of another or interferes a prospective business opportunity then they may be civilly liable for that interference;
• Unfair Competition: Unfair competition is a tort that occurs when a defendant markets a product that is confusingly similar to the plaintiff’s in order to confuse consumers as to the source of the product.
  • Unfair competition claims may also involve civil claims being filed by the consumers based on false advertising;
• Disparagement: Disparagement is a tort that occurs when a party makes false statements regarding the quality of goods or products, which causes a loss of business to the plaintiff.
  • There are many different types of civil claims involving disparagement, such as slander of title, or making false negative reviews of a product;
  • Disparagement claims are often brought under the legal theory of defamation;
• Breach of Fiduciary Duty: A breach of fiduciary duty tort occurs when a party acts according to their own self interest, rather than that of the party that they owe a fiduciary duty to;
• Computer Torts: Many jurisdictions have begun to recognize civil claims related to damaging computers or servers as a business tort.
  • For example, intentional damage to a business’ hardware or software may be considered a business tort if the act negatively affects the business’ ability to operate.
  • Additionally, negligent use of a computer that results in harm to a business’ hardware, software, or network may also be considered a tort in some jurisdictions.

What Are the Remedies for Business Torts?

As mentioned above, the most common legal remedy for business torts is the defendant having to pay monetary damages. This means that if the tortfeasor is found liable for committing a business tort, they will be liable to compensate the plaintiff for any financial losses that the plaintiff’s business suffered as a result of the tortfeasor’s tortious actions.

Courts will typically calculate a business’ financial loss based on:

• The harm that the tortious action caused to the business’ reputation;
• The loss of profits of the business that was harmed;
• Any monetary losses that are calculable with reasonable certainty that a plaintiff may prove due to the tortfeasor’s tortious action or inaction; and
• In rare cases, punitive damages that are intended to punish the tortfeasor for their egregious actions.

It is important to note that calculating loss of profits as a result of a defendant’s tortious action or inaction is not always easy to prove. As such, expert witnesses that specialize in calculating businesses losses are often utilized in civil lawsuits involving business torts in order to prove up the damages suffered by the plaintiff as a result of the defendant’s tortious conduct. This often makes civil lawsuits involving business torts costly.

Are There Any Factors That Can Affect a Damages Award?

In short, yes. There are numerous factors that can affect a damages award. For example, if a business is being harmed by another business violating their trademark or copyright, but they take no actions to maintain their copyright or trademark, then a court may not award them with the full amount of damages that they suffered.

As such, it is important for a business to immediately take actions against any party that may be interfering with their business. If a business knows that their business is being negatively affected due to another party’s tortious conduct, but takes no affirmative actions to stop the conduct, then that will affect their damages award.

As mentioned above, another common factor that can affect a damages award is the failure to prove losses with reasonable certainty. Further, if the plaintiff waits too long before filing their civil lawsuit, they may be precluded from filing their civil lawsuit. It is important that the plaintiff’s file their suit within the appropriate statute of limitations. Typically, any damages suffered as a result of a business tort outside a two year period may not be recovered by a business.

Do I Need a Lawyer?

As can be seen, proving losses associated with business torts is often a complicated matter. As such, if your business has been harmed as a result of the tortious conduct of another party, then it may be in your business’ best interests to consult with an experienced tort lawyer. An experienced tort lawyer will be able to help your business determine whether or not it has a valid civil claim against the third party.

Additionally, an attorney will also be able to help your business calculate and prove the damages suffered by the business. Finally, an attorney will also be able to represent your business in court, as needed.