Companies face various challenges in the competitive landscape of the business world. This includes fair market competition and wrongful actions that can hurt a business’s operations and reputation. These wrongful actions, called business torts, include a range of legal claims that businesses can bring against each other.
To protect their company and promote fairness, business owners must understand these torts.
Interference with Business Relationships
One common type of business tort is interference with business relationships. If a company intentionally disrupts another company’s contracts or business relationships, it gains an unfair advantage. If a competitor spreads false information about your company and causes your clients or suppliers to end their contracts with you, you may have a case for interfering with business relationships.
Fraud in Business Dealings
Fraud is another type of business tort that can harm a company’s reputation and financial stability. It occurs when one party deliberately deceives another for personal gain. Customers or investors could accuse a business of fraud if it misrepresents its products or services. Such actions harm the deceived parties and undermine trust and credibility within the business community.
Unfair competition occurs when a company uses deceptive practices to gain an unfair advantage. This can include false advertising, trademark infringement or misappropriation of trade secrets. For instance, a company might copy another company’s branding to confuse customers and gain an unfair market advantage. Customers and competitors could accuse it of engaging in unfair competition.
Defamation and Trade Libel
Defamation and trade libel are business torts that involve damage to a company’s reputation through false statements or malicious rumors. If a competitor spreads false information about your company, you could sue them for defamation. Defamation and trade libel can harm a company’s reputation, finances and business relationships.
In 2020, the tort cost for general and commercial liabilities in the United States was an estimated $229 billion. In addition to the sizeable financial impact, business torts can impact the success and reputation of any company. Business owners should know the risks and protect their businesses from wrongful actions.