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Understanding Business (Economic) Torts

On Behalf of | May 3, 2023 | Business Law

If you work in corporate America, you have probably heard the term “tort” and discussion of business or economic torts, in particular. A tort is, essentially, a negligent or otherwise wrongful act or some other kind of infringement on a person’s or business’s rights that causes harm.

You can potentially hold someone civilly liable for an economic tort. In some cases, the conduct in question can also be a crime, and the guilty party and/or their business may face criminal consequences via separate legal action filed by the government.

Seeking Damages and Remedies

An economic tort generally results in financial harm or loss – sometimes well into the future. Determining the extent of your losses so that you can seek the appropriate amount of damages from the person or entity responsible for the tort is an important aspect of your case. These losses (particularly future losses) can’t be known with certainty. However, an attorney can help you engage in good faith calculations with “reasonable certainty”  on their accuracy.

There may be non-economic remedies as well, such as an injunction. That’s essentially a cease-and-desist order that has the weight of the court behind it. In some cases, punitive damages may also be recoverable if a defendant acted maliciously.

Economic Torts May or May not be Intentional

Economic torts are sometimes intentional. The defendant knew they were acting wrongfully but acted under the assumption that they wouldn’t be caught. Maybe they used a close approximation of your company’s logo as their own, but were hoping they could get away with it.

Sometimes, torts are unintentional. Maybe the perpetrator didn’t think the resemblance was close enough that their usage was an infringement of your intellectual property (IP) rights.

Numerous Types of Economic Torts

Economic torts don’t \all involve IP. They can include trade libel and commercial disparagement (which are types of defamation), fraudulent misrepresentation (for example, within the context of a contract) and breach of fiduciary duty. However, some economic torts do involve IP, such as theft of trade secrets and trademark infringement.

Whichever side of an economic tort case you find yourself on, the best first step is to seek experienced legal guidance as soon as possible to protect your rights and effectively present your case.