A business tort is the legal term for a wrongful action against your company, whether the action in question resulted from reckless, negligence or intention. Although most business torts are only civil offenses, you may be able to seek legal damages if financial loss occurred.
Explore the types of business torts and learn about next steps when these acts impact your company.
Committing fraud with the intention of enticing a business to enter a contract is a bad faith action. This tort can result in civil claims as well as cancellation of the fraudulent contract.
Restraint of trade
The law prohibits individuals and businesses from entering contracts or taking actions that prevent another business from regular operations. For example, if your suppliers collude to limit access to raw materials you need for production, this collusion constitutes restraint of trade.
This term refers to intentional interference with your company’s contracts and agreements. For example, if a competitor harms a business relationship with your supplier, the court may consider this act tortious interference.
This type of business tort occurs when another person or business purposely publishes incorrect information that damages the reputation of your business. To seek civil damages, you must be able to prove loss of revenue resulting from trade libel. A similar tort, commercial disparagement, refers to defamation meant to cause harm to the business, but not necessarily in print.
Trade secret theft
Stealing proprietary business information to gain an unfair advantage over a business falls into the category of trade secret theft. However, you must prove that your company took steps to shield the secrecy of the data in question.
When you file a civil court claim in response to a business tort, the judge may order an injunction to stop the defendant from continuing the damaging action. Financial damages may be available when you provide proof of a monetary loss associated with the relevant tort.