Business disputes can arise in a number of different ways. Most often, people think of contract disputes, but there is a whole class of disputes that do not involve a breach of contract. These are business torts. Generally speaking, a business tort can be any matter that is not based on a contractual relationship and that the law recognizes as a civil wrong to which a remedy applies. Fraud and defamation are just two examples of business torts. Our Chicago business tort lawyers provide strategic advice and deft representation in business tort matters, representing both plaintiffs and defendants in the resolution of all manner of business tort litigation.
Below are some of the most common business torts.
In the context of a business tort, fraud or fraudulent misrepresentation usually involves an intentional misrepresentation of fact or the failure to disclose a material fact that causes harm.
State laws define unfair or deceptive trade practices. For instance, the Illinois Deceptive Trade Practices Act outlines a dozen different deceptive trade practices, such as passing off goods as those of another, causing a likelihood of confusion as to the source of goods, representing used goods as new, disparaging the goods of another by false or misleading representations of fact, bait and switch advertising, and more.
Many of the deceptive trade practices outlined above would amount to unfair competition when they harm a competing business. Under the Deceptive Trade Practices Act, it is not necessary to prove competition between the parties in order to prevail in a lawsuit alleging a violation of the statute.
Business defamation, also known as commercial disparagement, occurs when a person or competing business makes a false and defamatory statement that hurts a business’s reputation.
This tort includes many different actions that interfere in a contractual relationship, such as convincing a party to breach its contract or not do business with another party or preventing them from fulfilling their duties under a contract.
Theft of trade secrets or other actions that infringe on a copyright, trademark or other intellectual property.
A business harmed by one of these torts can sue the offending party. The remedies for a business tort generally fall into one of two categories: injunctive relief and money damages.
An injunction is a court order demanding that a party not engage in some practice or stop the conduct it is already engaging in. An injunction could also require a party to take positive action to correct a wrong, such as publishing a correction of a false advertisement or being required to meet the terms of a proffered sale. Injunctive relief can sometimes be obtained on an emergency basis or after an expedited hearing, as opposed to money damages which only come at the conclusion of a trial if the parties don’t settle out of court.
Money damages are usually considered the most appropriate remedy in law to right a civil wrong. Parties harmed by a business tort can recover for the actual amount of damage done to their business. This damage could include lost profits, the cost of a lost business opportunity, damage to an existing business relationship, and reputational damage in general. The Illinois Deceptive Trade Practices Act also allows a plaintiff to recover its attorney’s fees and costs of litigation from the other party if the defendant’s wrongful conduct was willful. In addition to fighting over the question of whether one party committed a business tort and is liable to the other, much of business tort litigation is focused on determining the amount of damages and whether attorney’s fees or punitive damages are appropriate.
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