Arthur R. Lehman, L.L.C.

What if I have been victimized by trade disparagement?

A New York business will often have a great amount invested in its reputation. In the competitive world of New York business, it is not unusual for competitors to try and gain an unfair and illegal advantage by making false and derogatory statements about another business in the same industry. This can be called commercial disparagement or business disparagement. The idea is to prevent others from working with the business or using its products or services. There is a wide array of ways in which this can occur and it is important for a business that is considering a business tort to understand them.

The allegations can range from a business being incompetent at its work, to unethical in its dealings, to showing outright dishonesty. The main idea of this business tort is to protect one business from disparagement from another, but the tort can also be brought against customers. To show that there was disparagement, the plaintiff must show four elements: that the false statement that was made has been published; that the statement that was made will lead to economic loss; that there was economic loss; and that the statement was made knowing that it was false or said with reckless disregard as to its accuracy.

With published, it does not mean that it had to be printed or posted on the web. Simply communicating it to a third party is enough. The statement must be shown as false. If it is true, then there is no basis to sue. It can be complicated to show that the disparagement resulted in financial damage. The reputation of a business can be difficult to define. The plaintiff needs to show that customers abandoned the business and new customers chose not to use the business because of the disparagement.

Businesses that believe they have been negatively affected by disparagement should know that they have the right to seek compensation from the offending party or parties. A legal filing is key to getting satisfaction due to these acts and a lawyer who is experienced in trade disparagement can help.

Source: smallbusiness.findlaw.com, "Commercial Disparagement," accessed on Nov. 22, 2017

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