Business Torts: What Are They and How Do You File (or Defend Against) a Tort Claim?

Most commercial litigation involves one of two main types of claims: Parties either file claims based on the terms of their commercial contracts, or they file claims for business torts. While both types of claims present numerous complexities and can take a variety of different forms, business tort claims seem to be far less well understood.

What is a Business Tort?

A business tort is a type of civil “wrong” that does not involve a breach of contract. As a result, businesses can file tort claims not only against contractual counterparties but also against third parties with which they do not have a contractual relationship.

Along with business torts, there are other types of torts as well. Personal injury claims are tort claims, as are claims for trespass, products liability, and invasion of privacy. Business torts are similar in that they can arise in a wide range of non-contractual circumstances, but they involve different types of “wrongs” that are specific to the commercial realm.

Examples of Business Tort Claims

With this general concept in mind, we can take a look at some examples of specific business torts under Florida law. Examples of tort claims that businesses can file in Florida include:

Deceptive Trade Practices

Deceptive trade practices involve using false and misleading statements to lure customers into purchasing goods or services. Not only do deceptive trade practices harm consumers, but they harm competitors who market their products and services through legitimate means as well. As commercial customers, businesses can also file deceptive trade practice claims if they purchase goods or services based on another company’s false or misleading representations.

Defamation

While deceptive trade practices typically involve making false statements about a company’s own products or services, the business tort of defamation involves making false statements about another company or its leadership. Defamation claims can either involve slander (oral misrepresentations) or libel (written misrepresentations), and they can arise out of any false statements that cause material harm to a company’s reputation or goodwill.

Fraud

In the commercial context, fraud can take numerous different forms. Some of the most common types of commercial fraud litigation involve claims based on fraudulent inducement, fraudulent misrepresentations and fraudulent omissions. While these types of fraud claims frequently arise within the context of a contractual relationship, fraud claims can exist without an underlying contract as well.

Theft of Trade Secrets

Theft of trade secrets is a business tort that can substantially impair a company’s competitive advantage. This theft can occur through commercial espionage, cyber intrusions, or obtaining information from a current or former employee in violation of the employee’s confidentiality obligations. In theft-of-trade-secret cases, prompt legal action can be critical for mitigating the harm resulting from the theft.

Tortious Interference

Tortious interference involves wrongfully interfering with an existing or prospective contractual relationship. These claims can also arise in a variety of circumstances, though one of the more-common examples involves a company executive or board member usurping or diverting a corporate opportunity for personal gain. Like other types of business torts, companies and their counsel can use various types of evidence to prove tortious interference, with communications obtained through discovery often serving as key proof of liability.

Unfair Competition

Unfair competition involves using deceptive trade practices and other forms of prohibited conduct to gain an unjustified commercial advantage. In many cases, unfair competition claims involve either trademark infringement or false claims about a company’s products or services. However, unfair competition claims can involve misrepresentations about a competitor as well, and, in these cases, the competitor may have grounds to pursue multiple business tort claims in state or federal court.

Unlawful Restraints of Trade

Agreeing to pricing restrictions, dividing markets and other similar types of practices can give rise to claims for engaging in unlawful restraints of trade. While these types of claims can be challenging to prove, here too, there are several options available. In many cases, unlawful restraints of trade violate state and federal antitrust laws, and these violations can expose companies to both commercial litigation and governmental enforcement action.

Filing a Business Tort Claim in Florida

Filing a business tort claim is similar to filing a claim for breach of contract. A party seeking redress must file a lawsuit in court, and, in its lawsuit, the party must clearly state a claim for relief based on the specific elements of the relevant business tort (or torts) under the governing law. From there, the case will proceed similarly to any other type of commercial litigation, with the defendant filing an answer, the parties going through discovery and pre-trial motions practice, and then going to trial if they don’t settle.

But, many business tort claims do settle—in fact, the majority of all commercial litigation cases settle out of court well before trial. In many cases, the defendant’s insurer will assume responsibility for its defense, and the parties will work out a settlement that is fully insured.

Defending Against a Business Tort Claim in Florida

Defending against a business tort claim is also somewhat similar to defending against a breach-of-contract claim, although there are some important differences. For example, whereas commercial contract claims typically focus on the language of the parties’ agreement and their intent at the time of contracting, business tort claims are much more heavily fact-based. Can the plaintiff substantiate its tort claim, or can it not? After answering this question, the defendant and its counsel will need to structure a defense strategy accordingly.

Speak with a Commercial Litigation Attorney in Florida

At Edelboim Lieberman, we represent companies of all sizes in business tort litigation throughout Florida and nationwide. If you have questions about pursuing a tort claim or if your company is facing a lawsuit in state or federal court, we encourage you to contact us promptly for more information. To speak with an experienced commercial litigation attorney in confidence, please call 305-768-9909 or request an appointment online today.