What is a business tort?

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Business litigation is a broad, highly complex area of the law. Every size and type of business could be subjected to litigation at one point or another which is why it is always a good idea to have a lawyer review your contracts, handbooks, guides, and any other legal agreements. This simple action could ward off potential errors as well as litigation matters.

What is a business tort?

A business tort is also known as an economic tory and is considered to be a wrongful act committed against a business. This act could be an act of negligence or recklessness, but is usually intentional. In general the reason to commit the act is to cause the business financial loss either now or in the future. A business tort is not considered to be a criminal act even though some are treated in a similar manner.

When a business has incurred financial loss because of a negligent or malicious act by another person or business, they may be able to pursue a civil case for compensation. Typically all parties involved will need to have a business lawyer guiding them through the process and ensuring their client’s rights are being protected.

A Closer Look at Business Torts

A business tort can cause damage to business relationships, public reputation, growth, and their current position within the marketplace. Financial losses can include current and those that are prospective. For instance if a business lost a client due to a business tort, the damages will be based on that loss. However if the loss of one client also impacted the companies ability to get new clients, they might also seek prospective future losses.

Elements Needed for a Business Tort Claim

A lawyer will look for three elements to bring forth civil action for a business tort against a business. These are:

  1. The lawyer must prove the defendant had a duty to act lawfully or within the law under normal circumstances.
  2. The defendant failed to do so; therefore, breached this duty.
  3. The plaintiff incurred a loss, injury, damage, or harm because of the defendants actions.

In general a business tort can be filed when a plaintiff believes, or can prove, that some kind of damage occurred or a law was broken, and an alleged party was the cause.

Examples of Business Torts

There are many examples of business torts. Because a tort is considered any act that prevents a business from operating, the idea of a business tort is considerably fluid. Some examples are included below. If you’re unsure whether or not your business has been affected by a tort, you may want to call a lawyer.

Tortious Interference  – When a party deliberately interfere with a contract between another party and the plaintiff.

Restraint of Trade – Although not a specific type of tort, it refers to a an act, that is typically negligent on behalf of the defendant rather than malicious. The plaintiff might not immediately suffer financial loss, but may be unable to conduct normal business operations.

Theft of Trade Secrets – When a party deliberately steals or sells proprietary information from a business, it is a business tort.

Fraudulent Misrepresentation – When two parties enter a contract or agreement (i.e. handshake), both have an obligation to carry out their obligations in good faith. If either misrepresented their intentions, and financial losses result, it could be considered a business tort.

Tort Law Remedies

Tort laws have been established to assess damages, provide monetary compensation to the injured party, prevent further losses, and assert legal rights. If you believe you have been the victim of a business tort, call a business dispute lawyer New York, NY trusts that you can rely on today.



Thank you to our friends and contributors at Okun, Oddo & Babat, P.C. for their insight into business disputes and torts.