This past year was a challenging time for most businesses. Regardless of your company’s scale, the past year’s economic climate and closures have presented a unique financial scenario for most businesses. Given this environment, many companies resort to potentially unethical practices to compete in this difficult environment.
Understanding how torts work
A business tort, which may also be called an economic tort, is a category of wrongful actions that a person or business entity can take against a business meant to cause harm. These actions can result in profit losses, tarnished institutional reputation, and decreased market shares or advantages. These actions can be both intentional or caused by negligent behavior. If you are a business owner, you must understand the common examples of these practices:
Tortious interference: This action is considered the intentional and unlawful interference with a company’s contractual agreements and business relationships by a third party. These kinds of activities are typically enacted to cause a breach of contract.
Unfair competition: This is the competition of two companies on unequal terms. This condition may result from the unfair application of conditions to one company and not another.
Fraudulent misrepresentation: This is considered any act meant to deceive a person or business to gain unfair, and possibly unlawful, gain.
Restraint of trade: Such actions constitute an economic injury from interfering with a company’s ability to freely conduct business. Such meddling can include interferences in interstate commerce or business agreements that hinder another business.
Protecting the integrity of your business
A business tort can destroy a person’s financial opportunities and reputation. Ensure that you’re protected from the unethical and unlawful actions of a party acting against your interests.