Torts are the intentional, negligent, or improper interference with the business interests of another. These cases can involve fraud, breach of fiduciary duty, partnership disputes, misappropriation of trade secrets, unfair business practices & competition, as well as breach of contracts.
Fisher Stark, P.A., offers experienced business law counsel in Asheville, NC. We've helped many clients with tort issues because of the damages inflicted. Defining business torts as violations fixed in law means they are usually more complex than a contract breach.
Kinds of business torts
Business torts occur with the intentional, negligent or improper interference with the business interests of another. This can include fraud, breach of fiduciary duty, restraint of trade, commercial disparagement, theft of trade secrets, unfair business practices and breach of contracts.
When the obligations agreed to in a contract are broken, it can mean litigation to right wrongs. When someone damages a business whther intentional or not, an experienced business tort lawyer can help navigate the court process. At Fisher Stark, our business attorneys are experienced with the ins and outs of business torts and contract litigation.
Our years of experience allow us to offer our clients expertise in the following areas:
- Litigating violations of the Unfair and Deceptive Trade Practices Act
- Negotiating and litigating claims of fraud, negligence, conversion, and trademark infringement
- Restoring victims of defamation, civil theft, and trade secret theft
- Prosecuting and defending a wide variety of contractual disputes
- Pursuing racketeering claims
- Protecting business interests from carelessness, negligent, recklessness, or intentional misconduct
If your business interests have been put at risk, or if you’re simply unclear about the laws governing your business procedures, you should consider contacting a business attorney in Asheville to protect your rights and interests. Fisher Stark, P.A. has extensive experience representing businesses in business tort litigation and contract disputes.
Anyone who runs a business knows that most transactions occur as a result of a contract, even if it’s just a handshake. And, in essence, contract law determines the transfer of rights from one party to another. Each party is held accountable to agreed-upon terms.
With any contract, its critically important that both parties are acting in good faith, with honesty and fairness. But if one party uses false or misleading statements to induce another party into a contract that then causes some kind of harm, that’s fraud, even if the error was unintentional.
The wronged party can sue for fraudulent misrepresentation and a good business lawyer can help with that claim.
This business tort deals with multiple issues. Fraud includes misrepresentation of facts, taking money or property belonging to another, then converting it and fraudulently using it for one’s own interests (or the interests of a third party that does not have a right to the items). Fraudulent conversion means one party assuming right of ownership over assets that belong to someone else.
Successful fraud or conversion claims need proof. Proof of fraud includes showing how a defendant intended to defraud, and making it happen, Fraudulent actions can include illegally asserting ownership or taking another’s goods with wrongful intent.
Types of Fraud
As a business tort, fraud is one of the broadest categories. In general, the law defines it as any intentional misrepresentation of facts for the purpose of making a profit or personal gain from the victim’s damages. In a business situation, fraud takes a variety of forms, including:
- Embezzlement (aka larceny). Using money illegally by the person or entity in charge of controlling the funds.
- Internal theft. Stealing or misusing company assets such as money or property.
- Theft of trade secrets. Stealing intellectual property which has increased with the growth of data and technology.
- Healthcare fraud. A variety of activities which illegally take money or property from the healthcare industry.
Businesses today suffer from all kinds of fraud. But even if you expect recent losses are because of fraudulent activities, evidence is needed before you can make a claim. Evidence of fraud includes emails, documents, records, or conversations with an suspected offender.
Fraudulent conversion happens when one party converts goods or assets for its own use, while excluding the actual owner. So, any unlawful taking or using property may be fraudulent conversion. This type of fraud deals with tangible goods, not intellectual property. Examples include money, objects, tools, materials, or receipts. And, conversion also describes stolen goods or unauthorized use (like a mechanic taking a customer’s vehicle without permission).
Misusing assets is also a form of conversion (such as using a company printer to print non-work related items).
Filing a fraudulent conversion claim requires proof of damages. It can cause financial losses, business harm, or even personal damages. So, if someone stole something from you but brought it back without you suffering any harms, there's no right to pursue compensation. You must have evidence of your losses. Conversion cases include trespassing, stealing, unauthorized possession, destroying (or altering) an item, embezzlement, appropriation, wrongful assumption, and more.
Breach of fiduciary duty
A Fiduciary Relationship exists when one party has placed confidence and trust in another party with that party’s full knowledge. One party owing a duty to another party is called the fiduciary. A lawyer, for example, is a fiduciary of their clients.
A fiduciary relationship is created either under the law. This is done through statutes, legal proceedings / contracts, or through the factual circumstances of the relationship.
A breach of fiduciary duty happens in a number of ways. Taking actions contrary to the interests of the client or done out of the fiduciary’s own self interest are breaches. So too is a failure to disclose pertinent information (a conflict of interest for example) a breach.
A successful breach of fiduciary duty claim requires several things. First, proving there was a duty to the plaintiff based on the facts of the case is key. Also key to a successful claim is proving that duty was breached in some way. Finally, proving damages as a result of the breach is also required for success.
A successful Breach of Fiduciary Duty case typically recovers for actual damages caused. But, proving a breach is committed out of malice or fraud means the plaintiff may also recover punitive damages too.
Theft of trade secrets
Confidential information giving a business a competitive advantage is defined pretty broadly. It can be anything from commercial secrets to manufacturing or industrial secrets. Theft happens when someone uses such information without authorization.
The definition of “trade secrets” differs from one jurisdiction to another. There are a few common elements among these multiple definitions though. In the United States, trade secrets are things a company protects. A trade secret is valuable because it is not disclosed to the public.
Trade secrets include general things like advertising strategies, sales methods, and industrial processes. Protected information is also industry specific like a food or drink recipe.
Trade secrets can include information that is eligible for patent protection, and information that isn’t. Even if something meets the eligibility for a patent, a company can choose to keep the secret instead of applying for a patent.
Not patenting trade secrets has advantages and disadvantages. First, patents have a time limit whereas trade secrets do not. Also, protecting trade secrets doesn't require specific institution approval. And, protecting a patent means registering it with the United States Patent and Trademark Office (USPTO).
The disadvantages to not protecting a trade secret with a patent are numerous. Reverse engineering secrets happens frequently. Dissecting, inspecting and analyzing discovered secrets are legal to use for commercial gain.
Protecting a patent is far easier than protecting a trade secret. If someone discovers the secret by legitimate means, they can legally obtain a patent for that secret, obtaining its exclusive rights.
There are good ways to protect trade secrets, such as nondisclosure agreements.
When competition among businesses crosses the line into improper interference, it’s time to seek counsel from an experienced business lawyer. Intentionally interfering with business contracts or relationships to cause economic harm is called tortious interference.
Common forms of interference include intentionally interfering with the sale of a business by inducing a breach, blackmailing or threatening someone. The most common form of intentional interference is with business contracts, whereby forcing or inducing someone to break a binding agreement with a third party.
For a court to determine that a tort has occurred, it examines the motivation of the party that caused the breach to determine if they acted improperly.
In a tortious interference case, there can be two Plaintiffs, the person forced into violating a contract’s terms, and the other parties bound by the terms of a contract and lost benefit of the contract due to interference.
The basic elements of a tortious interference case include a valid contract (or economic expectancy) between a Plaintiff and a third party, knowledge of that contract (or expectancy) by the defendant, intent by the defendant to interfere with the contract (or expectancy), actual interference occurring, interference that is improper, and the plaintiff suffering damages because of the interference.
A business’ good reputation can take years to build, and mere minutes to damage. This can happen because of negative comments made by a customer or another business. Under certain circumstances, comments justify a trade libel suit.
Trade libel falls under the larger category of defamation cases. These types of torts occur when false statements damage a party’s reputation. There are two types of defamation, libel (print) and slander (spoken).
Whether a defamation case is libel or slander, there are certain things the plaintiff must prove in order to be successful in a Trade Libel case:
- There is a published statement (the internet and emails count when conveyed to a third party);
- That the statement was not true;
- That the statement caused an injury to the plaintiff; and
- The statement was not in a privileged category.
This is a general definition of defamation. Also, each state has its own variations on what constitutes a defamation claim. So, experience with state laws is critical. A good business lawyer is key when considering the merits of a defamation case.
Unfair business practices
Unfair competition is a deceptive or wrongful business practice that causes economic harm to either consumers or businesses. There are Federal and State laws designed to protect the economic, intellectual and creative investments made by businesses distinguishing themselves and their products.
Consumers who are injured by deceptive trade practices usually seek remedies provided by the Consumer Protection Agency. Businesses may have to hire an experienced lawyer to seek damages.
Examples of unfair competition include:
- Trademark Infringement;
- Unauthorized substitution of one brand of goods for another (i.e. “bait and switch”);
- Misappropriation of trade secrets (stealing a recipe for example and using it for financial gain);
- False representation of goods or services;
- False advertising (such as exaggerated claims).
Courts take a number of things into consideration when decided damages in an unfair business practices claim. Important considerations include:
- Number of violations;
- The nature and seriousness of the misconduct;
- Length of the misconduct;
- Willfulness of the defendant’s misconduct; and
- The defendants assets, liabilities and net worth.
If your business has been hurt by unfair business practices, seeking legal counsel from an experienced attorney like those at Fisher Stark, P.A. can be key to a successful business tort claim.
Business torts can mitigate damages
Courts have many ways to prevent the practice of wrongful acts committed against businesses that has resulted in a financial loss. It can be a complicated process to file a business tort claim, but essential in certain circumstances to protect business interests or recover damages.
Whether a victim of unfair competition, improper interference, restraint of trade, theft of trade secrets, defamation or other damaging and illegal practices, the legal system may be able to help.
Remedies restoring money or property to victims of unfair business competition can happen at the State or Federal level. Some states even allow for both monetary damages and injunctive relief.
Hiring an experienced business lawyer can make the difference in a successful claim.
Questions you should ask an attorney
During an initial consultation, Fisher Stark, P.A., wants to let you know you are good hands. But no matter who you talk to, feel free to ask:
- What percentage of your cases go to trial?
- How long have you been handling business tort cases?
- Are you a member of organizations that specialize in representing people? (AAJ, TLA, etc)
- Are you a "board certified" civil trial lawyer? (NBTA)
- How many lawyers work your cases?
- Who will handle my case?
- What improves the chances of a successful case?
- What is my role in my lawsuit?
- Can you provide references from past clients?
- How much time can you devote to my case?
- How long does a typical business case (say, breach of contract) take to resolve?
- Will my business tort case go to trial?
- What is your success rate for cases that go to trial?
- Do you know what my case is worth?
- During my business tort case, what can I expect?
- How often will you communicate with me about my case?
- How many business tort cases are you currently handling?
- What other staff members will be working on my case?
- When I call with a question, how long will it take to get a response?
Asheville business lawyer
At Fisher Stark, P.A., we have more than 50 years’ experience on our side. We know the extent of of damages business torts can cause and will fight for fair remedies to unfair practices. When a wrongful act damages your business, resulting in some kind of financial loss, experienced counsel matters.
Our firm represents businesses of all sizes. We have helped sole proprietorships to Fortune 25 corporations. It doesn't matter if it’s a simple contract dispute or a complex business tort.
For a business tort consultation, use our Contact Us page or call 828-505-4300. Our experienced lawyers can guide you through a complex process of filing a business tort claim. And, we fight for your company’s rights to full compensation from unfair practices, so you can focus on business.