Although many New York business disputes arise from allegedly breached contracts, not all do. There are a number of civil wrongs that can also give rise to a business dispute. These civil wrongs are called torts. This blog post will focus on one of these torts: trade disparagement. As always, readers are encouraged to meet with a business law attorney if they have questions about how the law applies to their specific situation.
Trade disparagement is also known as commercial disparagement or business disparagement. Trade disparagement happens when someone makes derogatory statements about another's business or title to property with the purpose of discouraging the public from dealing with the person allegedly disparaged. A trade disparagement lawsuit gives a plaintiff an opportunity to possibly recover damages from another party for the damages suffered from the unfair disparagement. Competing businesses, as well as consumers, can be defendants in a trade disparagement action.
In order to recover on a claim of trade disparagement, a plaintiff must prove a number of things. First, they must prove that the defendant made public a false statement. The plaintiff must also prove that the statement was made with the intent or reasonable belief that it would cause financial loss for the business and that the statement did indeed cause financial loss. Finally, the plaintiff must prove that the defendant made the statement knowing that it was false or with reckless disregard for whether it was false.
One of the goals of trade disparagement law is to discourage unfair competition among businesses. Although it can sometimes be hard to prove a trade disparagement claim, a successful lawsuit can send a message that this kind of unfair competition has consequences.