Types of Business Torts

Running a business is not all fun and games. A part of business operations is dealing with issues such as bad reviews, libel, slander, fraud, and breach of contract. These are called business torts and they can be caused by a person or another business. They can even be committed by an employee.

Any of these issues can lead to poor reputation, financial damages, and more. You need to understand how these issues can harm your business and how you can defend yourself.

Breach of Contract

This is one of the most common business torts. This is when someone fails to fulfill their part of a contract. This failure can take various forms, such as failing to deliver goods or services as promised, not completing work on time, delivering defective goods, or not paying for goods or services rendered. There are minor and material breaches.

Theft of Trade Secrets

Theft of trade secrets, also known as trade secret misappropriation, occurs when someone steals confidential information from your business. This information could be about your special processes, techniques, or ideas. Theft of trade secrets is a serious issue that can harm the competitiveness of your business.

Tortious Interference

This occurs when someone causes trouble between two parties who had a deal. This may include using threats or blackmail, diverting business opportunities to themselves, or preventing a contractor from fulfilling their contractual obligations, such as by refusing to deliver goods. This meddling can lead to financial harm and result in a legal case.

Fraudulent Misrepresentation

This happens when someone lies to trick you into doing something, such as making a bad deal or buying something you don’t need. If fraudulent misrepresentation causes you financial harm, you may have a lawsuit on your hands.

Defamation

This involves spreading false statements about a competitor to harm their business. This can include false reviews, statements, accusations, or reports.

Protecting Your Business 

You can protect your business from business torts by doing the following:

• Draft strong contracts. Have well-drafted contracts with customers, suppliers, and partners. Include specific clauses addressing potential issues like non-disclosure, non-compete, and non-solicitation.
• Implement internal policies. Educate employees about company policies, ethical practices, and legal standards to prevent issues like fraud, defamation, or misrepresentation. Create a comprehensive code of conduct outlining acceptable behavior.
• Intellectual property protection. Register your trademarks, copyrights, and patents to safeguard your business’s intellectual property. Use non-disclosure agreements to protect sensitive information when dealing with employees, contractors, or business partners.
• Secure business relationships. Conduct background checks and due diligence on potential partners, clients, and suppliers. This reduces the risk of being involved in fraudulent or harmful business dealings.

Contact a Business Litigation Lawyer Today

Business torts can cause a lot of harm to your business. If you are facing a potential, pending, or active business matter, seek legal help right away.

A business litigation lawyer from Cahall Law Firm can give you the advice you need. We’re familiar with breaches of contract, deceptive business practices, and more. Schedule a consultation today by filling out the online form or calling (941) 281-2019.

Source:

legal.thomsonreuters.com/blog/how-does-a-breach-of-contract-occur/