When a party has a legal obligation to act in the best interest of another party - or parties - this obligation is known as a fiduciary duty. The relationship that creates a fiduciary duty is often referred to as a fiduciary relationship. For example, a business partnership creates a fiduciary relationship among the partners, and each partner, therefore, owes a fiduciary duty - an obligation to act in the best interests of the other partners and the partnership itself - to the other partners. If a partner fails to uphold this obligation, they may have breached their fiduciary duty, which can sometimes lead to disruptive business litigation.
Over the past several weeks, this blog has provided some basic information about possible legal remedies for when another party is harmfully dishonest in a business transaction. We've talked about fraud and trade disparagement; now we're going to talk about another New York business tort: fraudulent misrepresentation.
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.
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.
Manhattan business people expect their business partners, vendors, contractors and customers to be honest about the important aspects of their business transactions. Our business culture is based on trust, and a baseline level of honesty engenders trust and fruitful business relationships. If business people feel they cannot trust the people they do business with, the whole economy suffers. This is why our legal system encourages honesty among business partners.
Vigorous competition is a part of doing business in New York. But, when other parties "cross the line" and engage in unfair and improper conduct, the courts may be able to step in and award damages for the loss of business suffered by victims. One way that this could be done is by a victim filing a lawsuit alleging tortious interference with contract.
Many successful Manhattan business relationships are built on trust. When parties feel that they can trust each other, they may have the confidence necessary to form mutually beneficial commercial relationships. On the other hand, if parties do not feel that they can trust each other, the overall business climate can be negatively affected. This is why the victims of these breaches of trust can often have recourse to our legal system to seek damages for their losses.
Fans of Alfred Hitchcock are drawn to his complex plots and fascinating characters. Now one of his best known movies, "Rebecca," has ended up in court in New York City, as the producers of a musical based on the movie are suing the show's form publicist for a number of business torts, including tortious interference with contract and defamation.
Short selling is a common technique used by investors to reap a profit when they anticipate that the price of a given stock is going to drop. The short seller enters into contracts to sell large number of shares in the targeted corporation. And, when the price of the shares drop, the short seller fulfills its obligation to sell with shares that have been purchased at a price far below the sale price. This thus provides the short seller with a windfall profit. Richard Pearson, a well-known short-seller in New York City, was recently sued for libel by the target of a short sale that Pearson was pushing.
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.