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What is a tort and how can it affect my business?

On Behalf of | Jan 11, 2024 | Business and Commercial Litigation

A tort is a legal wrong that causes harm to another party and gives rise to liability. You may be familiar with the term in the context of personal injury law, but there are also business torts.


There are several categories of torts that can affect your business, including unfair competition, fraudulent misrepresentation, and defamation. Unfair competition involves using false advertising, libel or misuse of trade secrets to affect your market position.

Fraudulent misrepresentation, meaning the spread of false information, can cause your business financial harm and defamation includes untrue statements that can hurt your business’s reputation.

Your business can be harmed if another person or company takes your business property, such as patented information without permission, or if they disparage your products. Product disparagement can cause you to lose customers.


It’s important to address these issues and there are a few options to do so. You can choose an out of court process such as mediation or arbitration, which are forms of alternative dispute resolution, to negotiate and settle the dispute. You may receive damages to compensate you for your business losses.

You may also choose to file a lawsuit against the tortious party which will involve a trial. The court will decide the outcome and issue a judgement, which can also include damages. The court may order an injunction, which means that the offending party must stop their behavior.

If you do not agree with the judge’s order, you may have an opportunity to appeal the issue to a higher court which will either affirm the lower court’s ruling, reverse it or modify it.