Business Torts

A tort is a wrongful act you can sue and seek remedy for against another party. A business tort is a sub-category of wrongs you or a business can seek against others for economic damages. If your business is harmed by someone or another business, you would need to determine what the appropriate tort is to sue for. If the other party is found liable for the tort, you can ask the court for damages or other remedies. We recommend speaking with an experienced business lawyer to analyze the specifics of your case.

Our business lawyers frequently help both plaintiffs and defendants in legal actions for business torts. We will work with you no matter which end of a lawsuit you’re on so you can make practical decisions throughout your business dispute.

Common Business Torts

Some business owners mistakenly believe incurring damages or losses is just how the business world works. While in some cases that may be true, not all damages or losses a business incurs are only a lesson to be learned – sometimes it is just unlawful to engage in certain misconduct resulting in economic losses.

Described below are some common business torts meant to award damages and provide relief for economic harm a business endures.

Inducing Breach of Contract

Inducing breach of contract occurs when a third party knowingly and intentionally causes another party to breach a valid and enforceable contract with your business.

In Ontario, the test for inducing breach of contract requires proving:

1. A third party needs to have knowledge of a contract between at least two other parties.

2. The third party intended to cause a breach of that contract.

3. The third party’s conduct did in fact cause one of the contracting parties to breach the contract.

One of the contracting parties suffered economic losses as a result of the breach.

Fraud, Misrepresentation, and Deceit

Civil fraud also goes by the tort of deceit or fraudulent misrepresentation. To establish another party committed civil fraud and owes you damages, you must prove:

1. The other party made a false representation to you or your business.
2. The other party had some knowledge of the representation’s falsehood (or recklessly didn’t bother to confirm that truth of their representation).

3. The other party’s false representation caused you or your business to act.

4. You or your business’ actions relying on the misrepresentation resulted in a loss.

 

While it may be tempting to sue for civil fraud for any deception by another party, it is always best to discuss your options with a commercial litigation lawyer. Making weak allegations of fraud can open you to liability for counter lawsuits and potentially all the other side’s legal costs if you fail to prove your case.

Conspiracy

Parties can be liable for conspiracy when they work together to engage in behavior with the predominant purpose of hurting you or your business.

There is a “simple motive” conspiracy, which requires proving:

1. Two or more other parties engaged in a course of conduct with the predominant purpose of causing you or your business injury.

2. You or your business suffered some damage as a result.

 

There is also “unlawful conduct” conspiracy, which requires proving:

1. Two or more parties acted together, by agreement, or with a common design or intention.

2. The co-conspirators engaged in conduct that was unlawful, which can include the breach of a statute, the violation of a contract, or the carrying out of a tort, such as misrepresentation or fraud.

3. The conduct was directed towards you or your business.

4. Given the circumstances, the other parties should have known that injury was likely to result.

5. Injury or harm did result.

 

Intimidation

Businesses can sue others for intimidating them into taking courses of action that cause the damages. The tort of intimidation requires establishing that:

1. One or more parties threatened to commit an unlawful act.

2. They intended to cause you or your business injury.

3. You submit to the threats against you or your business.

4. You or your business suffered damages because you submitted to the threat.

Abuse of Process

Some of the most unlawful anti-competitive behavior hides behind a mask of legitimacy. Some businesses may use frivolous and meritless lawsuits to choke you or your business out of the market.

In Ontario, there are ways to use the Rules of Civil Procedure to fight baseless legal claims early on and seek your legal costs. However, you can also sue someone for bringing a frivolous claim against you or your business.

The tort of abuse of process requires you to demonstrate that:

1. You or your business are a party to a legal process initiated by another party.

2. The other legal process was initiated for the predominant purpose of furthering some indirect, collateral and improper objective.

4. The other party took or made a definitive act or threat to further the improper purpose.
5. You or your business incurred special damages as a result.

In short – if another party is abusing the legal system for the predominant objective of hurting you or your business, they may be liable for damages incurred as a result.

What Can You Do to Protect Your Business?

If your business is suffering economic losses or other damages because of someone’s unlawful acts, our commercial litigation lawyers are here to help. We can determine what business torts are best suited to get you the results and remedies you need to protect your business.

Depending on the business tort, a court may order the following non-exhaustive remedies:

• Damages for economic and quantifiable losses
• Damages compensating for non-economic injuries, such as mental distress, pain and suffering, and harm to reputation
• Damages punishing a party to deter similar conduct from others
• Equitable remedies, such as injunctions to prevent a party from doing something or specific performance to order a party to do something
• More legal costs for the successful party

Before using them, you can send a demand letter to the other side stating your legal position and propose an offer to settle the dispute, including a demand for damages your business suffered. You could even informally attempt negotiations to resolve your commercial dispute.

If negotiations fail, you can sue and move through the legal process while continuing to negotiate. Commonly, cases move through the litigation process with pleadings, mediation, examinations for discovery, a pre-trial conference, and then a trial.

Regardless of how you want to approach your specific business dispute or what stage you’re at, our business litigation lawyers can help provide you with the guidance you need to get the results you want. We will work with you to explore every legal option available to you and provide you with practical advocacy.

Contact Us

If you need to clarify your rights respecting a business dispute or representation in commercial litigation, our team of business lawyers would be happy to help you navigate your matter. Contact us at 1-800-771-7882, or email [email protected], and we would be happy to assist.