Arthur R. Lehman, L.L.C.

The fine line between a sales pitch and an economic tort

The whole business world in New York City, no matter the profession or the industry, revolves around negotiations. After all, negotiations lead to business or other deals, and these deals are how goods and services are exchanged and how the New York economy grows.

There are a couple of expectations that the law places on all parties to a business deal. The first is that, when it comes to facts, the parties will tell the truth and will not set up schemes to mislead people from the truth. In other words, a party in a business deal is free to play his or her cards close to the chest and not give out a lot of information, but the facts he or she does provide have to be truthful and honest.

On the other hand, everyone expects a fair amount of what some call "puffing" during a negotiation. Although there is no precise definition of puffing since the meaning varies slightly across several industries and professions, the general idea is that parties to a negotiation should expect that the other side will put his or her position in the most positive light possible, even if that means giving subjective opinions that are shaky at best. One can also think of "puffing" as an aggressive sales pitch.

Puffing is not only legal behavior, it is in many cases considered entirely ethical and appropriate. However, the line between puffing and fraud and misrepresentation is often very fine, such that it is not always easy to distinguish puffing from illegal and tortious behavior.

Generally speaking, a business is allowed to sell products and services or make deals using inflated but subjective opinions, like this is "the best product on the market." On the other hand, one must not misstate facts, such as by saying "this product will add 5 years to your life" when in reality, it will do not such thing.

Even intelligent, capable New York business owners can fall victim to misrepresentations and frauds in their business dealings. When this happens, it may be helpful to seek the advice of a New York City attorney with experience in handling business torts.

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