Commercial Disparagement is the publication of derogatory information about a person’s title to his or her property, to his or her business in general, or anything else made for the purpose of discouraging people from dealing with the individual. It may be referred to as slander of goods, trade libel, unfair competition or interference with prospective business advantage, but the broader title is commercial disparagement. Disparagement includes not merely false statements about the business, but also extends to false statements about the products or services of that business.
Elements of the Tort of Business/Commercial Disparagement
The following elements are generally required to pursue a claim for commercial disparagement:
- The statement is false.
- The defendant either intends the publication to cause financial loss or reasonably believes that the publication would result in financial loss for the business.
- Financial loss does in fact result.
- The publisher acts with malice. (The defendant knows either that the statement is false or acts in reckless disregard of its truth or falsity.)
A business sued for commercial disparagement has defenses. First, truth is an absolute defense to a disparagement claim. Second, the speaker may have either an absolute privilege or a conditional privilege against a commercial disparagement claim. For example, statements made in a judicial proceeding and statements made by a public officer in the performance of his or her duties are absolutely privileged. Conditional privilege occurs when the defendant has made his statement in order to protect his life, his good name, his family, his property or some similar legally protectable interest, or has made the statement to public officials concerning law enforcement or legislative officials.
What are the Damages for the Tort of Commercial Disparagement?
Damages awarded may include loss of reputation, loss of sales, and punitive damages if malice can be shown.