While most tort cases refer to physical harm done to an individual or property, business torts involve financial damage done to a company. Business torts are sometimes known as economic torts.
Types of Business Torts
Business torts can arise from many different types of actions, some of which do not need to be deliberate. These include:
- Breach of contract. Your business is entitled to take legal action whenever someone fails to fulfill the terms of a contract.
- Breach of fiduciary duty. Failing to uphold the fiduciary duties required by contracts, securities, investments, and shareholder or partnership arrangements is a common type of business tort.
- Defamation. Spreading false spoken or published statements can damage a company’s reputation and negatively affect its earnings.
- Fraud. This includes making false statements or omitting information during a business transaction.
- Misuse of intellectual property. Former employees or competitors may misuse various types of intellectual property—such as trademarks, copyrights, or patents—to harm a business’s competitive market position.
- Theft of trade secrets. Sharing trade secrets with competitors can have far-reaching consequences for a business.
- Tortious interference. This type of tort involves a business that has interfered with your contractual or business relationships with other individuals or companies.
Compensation Involved in Business Torts
Business torts can involve compensation for three types of damages:
- Compensatory damages. These damages are intended to put your company back to the same financial state it was in before the wrongdoing occurred.
- Punitive damages. These damages are not awarded in every case, but the judge can order them to punish a defendant who has acted recklessness, negligently, or maliciously against your company.
- Injunctive relief. This is not a monetary award, but rather an order that the defendant must stop the behavior that formed the basis of the tort.
Handling Complex Litigation
Business torts are considered complex litigation because they involve multiple parties and numerous legal issues, with a comprehensive analysis of losses necessary to proceed. The assistance of an experienced business law attorney is essential. Contact Stone LLP today to learn how we can help you protect the interests of your business throughout the litigation process.