Business Torts FAQs
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Business Tort Lawsuits are a cause of action when a person or company brings in civil litigation against another person or company generally arising out of some type of business relationship action outside of a contract.
The general object of a business tort lawsuit is for the plaintiff to recover money that the plaintiff is entitled to as a result of the actions of the defendant.
A Tort is the legal name given to various wrongful acts that result in an injury to another person or entity. What is a tort? A business tort is something that occurs outside of a written contract where if something is governed by a contract, the cause of action is a breach of contract. But the breach is not governed by a contract, these are commonly referred to as torts. There are many types of torts and torts include a wide body of civil cases.
A Business Tort is simply the name given to a wide number of civil causes of action in a business setting outside breach of contract. For example, if a majority owner of an LLC takes an action that only benefits him or her and isn’t damaging to the minority owners of an LLC the minority owners of the LLC may sue that person for a breach of fiduciary duty.
A breach of fiduciary duty is one type of business tort and here are many types of business torts including fraud, fraudulent misrepresentation, negligent misrepresentation, negligent inducement, constructive fraud and others.
- Breach of fiduciary duty
- Fraudulent misrepresentation
- Negligent misrepresentation
- Fraudulent inducement
- Negligent inducement
- Constructive fraud
Fraud is a civil cause of action that can be brought in the State of Florida. Fraud has several elements that must be proven in order to be successful in asserting that as a claim and a lawsuit.
The first element in a fraud claim is that the person that constructs the fraud makes a statement about a certain fact. And that person–the second element–is that the person knows that his or her statement is false.
And the purpose for which he or she is making that false statement is to get someone else–in this case it will be the plaintiff–to rely upon that statement, usually for financial gain or benefit.
And because of the reliance upon that statement the plaintiff was injured–normally in a financial sense. Fraud is a common cause of action in business litigation.
What is a Breach of Fiduciary Duty? In many business scenarios the parties owe each other a duty to act in a certain way. For example if there are members of an LLC and one of the members takes actions that damage the other member or the LLC itself often times it may be both then the other member or members could sue the member who has done these wrongful things for a Breach of Fiduciary Duty in an attempt to recover money to put the non-breaching party back in a position which it may have been.
So for example, a business tort could be a Fraudulent Misrepresentation. A fraudulent misrepresentation is when one party is negotiating with another party to enter into a contract but Party No. 1 says things that are not true to Party No. 2 in an effort to get Party No. 2 to enter into a contract with them.
Party No. 2 later discovers that these things are untrue. And Party No. 1 can’t perform according to the contract. And you would sue that person for a Fraudulent Misrepresentation or a Negligent Misrepresentation related to the statements that he or she had made before the contract was entered into.
Negligent Misrepresentation typically goes hand-in-hand with Fraudulent Misrepresentation and shares the same basic elements.
Negligent misrepresentation is a civil cause of action that is very common in business litigation. The elements for Negligent Misrepresentation are:
- A false or grossly negligent statement concerning a very important fact that the defendant knew or should’ve known that the representation was false, and,
- That the defendant made this misrepresentation to induce the plaintiff to take some type of action on it and as a result of that the plaintiff was then injured–normally financially.
The most common remedy or Punishment for a Tort is compensation. Generally in civil litigation when someone has been injured by one of the many torts, then that person sues the wrongdoer and seeks monetary compensation from the wrongdoer as a remedy for the tort that a person suffered.
A Business Tort Lawsuit is a civil lawsuit arising out of a business transaction or relationship. Because it is a business tort, that means it is not a breach of contract lawsuit. A very common type of business tort lawsuit is a breach of fiduciary duty.
L. Reed Bloodworth, Florida attorney explains that Business Torts refer to the terms used to describe the actual causes of actions for a lot of business litigation. In other words: things that happen in business between parties that could cause a business litigation lawsuit.
What is a business tort lawsuit? Business Torts are obligations and the best way to describe a business tort is when someone breaks a legal obligation — a contract or a promise — to another or to others.
A tort is a civil action that occurs and can be committed intentionally or unintentionally and can cause physical or emotional or financial or other harm to another party.
Tort is actually a Latin word that infers twisting. Cases involve a plaintiff seeking financial damages to right what was a legal wrong from a defendant’s actions whether intentional or accidental. In the case of personal injury torts, an act of negligence occurred whether intentional or accidental. Accidents may still show a defendant to be liable.
It’s the role of a plaintiff’s attorney–an attorney who works for the party filing a claim against another–to demonstrate that another reasonable person in the same situation would have acted in another way for a different outcome. Or that the defendant acted in an irresponsible, dangerous, intentional or risky manner that caused the negligence. When a tort occurs it is considered a civil wrong when four key aspects are present:
- Breach of duty
- Breach is the cause for the damages
- A legal duty of one to another
Torts include personal injury actions including car accidents, slip & fall accidents, wrongful death incidents, malpractice actions that bring death, permanent or unintentional results or injury. Defective parts and products can also be the cause for a personal injury tort.
When a tort has occurred it is up to the plaintiff to pursue legal action against the defendant. Proving a case is challenging but is plausible with an experienced personal injury attorney.
An intentional tort is any number of a series of causes of action in a civil suit. Intentional tort means that the defendant has done something in a deliberate manner to cause harm to the plaintiff.
In other words it’s an action that the defendant took on purpose. A good example of an intentional tort in business litigation is conversion.
In a conversion situation the defendant purposefully and with knowledge takes possession of something that belongs to a plaintiff. Usually in a business setting that is money or some type of funds. And he or she does that with the intention to deprive the plaintiff of that money with the intention of not giving it back.
A Tortious Interference with a Contractual Relationship is a civil cause of action that is commonly brought in business litigation.
In order to bring a cause of action for tortious interference with a contractual relationship a plaintiff must assert and prove multiple elements. Those elements include:
- That a valid contract existed between the plaintiff and a third party
- That the defendant knew about the contract that the plaintiff had with a third party
- That the defendant then took actions intended to induce the third party to breach the contract with the plaintiff and in doing so the defendant had no legal reason to take that action, and finally;
- That the plaintiff was damaged as a result of the actions of the defendant.
A common example of a Tortious Interference with a contractual relationship claim is when a plaintiff has a non-compete agreement with an employee or officer of the company.
Another company solicits that employee or officer to leave the company that he or she is currently with to come join its company–knowing that the employer officer had a non-compete agreement with its current employer.
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