Business torts can result from the wrongful conduct of a party during a business transaction or partnership. Also called ‘economic torts,’ business torts often deal with intentionally wrongful acts against a business entity, though there are some scenarios that involve negligence. When a company incurs significant damages and financial impact from the misdeed of a party it’s dealing with, civil litigation and, occasionally, criminal charges can result.
How torts protect fair business practices
Though torts are typically not considered criminal offenses, there are some, like ‘restraint of trade’ cases, that may result in criminal charges. The penalty in a business tort case is typically monetary compensation for damages, though a court can make injunctions for some forms of misconduct. Here are the most common types of tort cases:
- Tortious interference: This involves the interference by one party in the contract or business relationship of another.
- Restraint of trade: This refers to any illegal act that hinders a company from conducting its business as it normally would.
- Intellectual property: The dissemination or illegal access of intellectual property could involve proprietary information as well as trademark and copyright violations.
- Breach of contract: Maybe one of the most common violations. Those parties that violate business agreements could be eligible for a business tort classification.
- Fraud: Fraudulent misrepresentation can come in many forms, though the falsification of business information during transactions presents a heightened risk to contract violation and damage to a business.
Protecting your business interests from the beginning
The best way to protect your company is through a proactive practice of investigating potential risk areas for your company and those parties whose interaction is guided by contracts and other business agreements. It is crucial that in any business interaction, you have a qualified lawyer to assess the contracts and documents constituting your agreements.