Business Fraud Cases
It is challenging to run and maintain a business smoothly and ensure your clients are happy. Among the many challenges well-established and new businesses might experience are the numerous types of fraud cases. Fraud results in major financial losses or even forces a company out of business. A business litigation lawyer can help in filing legal claims for business fraud and help you in recovering compensation for your damages.
Fraudulent Inducement or Misrepresentation
This is a type of business fraud in which an individual or company is defrauded or tricked into entering a transaction or contract. In order to prove that there has been a fraudulent inducement, the case must meet the following criteria:
- The defendant must have misrepresented facts in the contract or transaction.
- The defendant utilized that misrepresentation to encourage the plaintiff to sign the contract or complete the transaction.
- The defendant used the misrepresented facts to persuade the plaintiff in agreeing to the contract or transaction.
- The plaintiff must have depended on the misrepresented facts.
- The plaintiff might not have accepted the transaction or contract if they had been told the truth.
Another general rule in this case is that the plaintiff mustn’t depend on the misrepresented facts if they were aware of its falsity.
The unfair competition law includes torts that results in monetary and economic harm to a company or an individual because of wrongful or deceptive business practices. These are divided into two major categories:
- Unfair competition – this includes torts that intentionally cause confusion among the consumers regarding a product
- Unfair trade practice – this includes all other kinds of unfair competition
Unfair competition doesn’t include the economic injury that involves antitrust and monopolies legislation. What represents as an unfair act might differ as per the business context, the actions being evaluated and the facts of each case. Some examples of unfair competition are as follows:
- False representation of services or products
- Trade libel
- Restrictive covenant breach
- Trade secrets theft
- Utilization of confidential information to solicit customers by a former employee
- Unauthorized substitution of a brand for another
- Unfair selling tactics like bait and switch
- False advertising
The unfair competition law is administered by the state common law while for false advertising, copyrights and trademarks are under federal laws.
This is also known as the 1946 Trademark Act, and is a federal statute, which covers unfair competition, service marks and trademarks. A trademark can be a graphic symbol, logo, phrase, word or other feature which identifies a service or product’s source and differentiates it from its competitors. Some examples include Microsoft (software) and Betty Crocker (food products); while some service mark is also similar to a trademark but promoting a service instead, for instance FedEx (delivery services).
The Lanham Act establishes processes for federal registration trademarks, determines the requirements of when the trademark owners would be entitled to protection against infringement, and creates remedies and other guidelines for trademark owners.
Copyright and Trademark Infringement
A copyright and trademark are kinds of intellectual property protection, which determines ways of defending against the unauthorized usage. While these come under intellectual property, both copyright and trademark provide protection to different assets. The registration of trademark and copyright vary depending on different countries and states.
A business or individual found to be infringing a trademark or copyright will be subjected to a lawsuit and might also be penalized depending on the case.
The reputation of a business is the most valuable asset it owns. Business defamation can result in major financial losses and might even result in bankruptcy of a company. If an individual or business falsifies statements to defame another business then it could significantly cause damage to that company. If the plaintiff proves that an individual or business has made defamatory statements resulting in losses then the defendant would be liable for defamation.
However, there are various hurdles to prove the damages in these cases; the plaintiff must prove that the case meets the following criteria to be upheld in court:
- False statements resulting in causing harm to the business’ reputation. The plaintiff must have proof of a published statement which harmed the business.
- It should be provable as a false statement. The loss incurred due to the false and defamatory statements should be proven.
- Must identify the individual or company that has spread the false statements. It could get difficult to prove this as anyone could post false statements on the internet anonymously.
It can be challenging to prove that another business or individual has caused harm to your business through defamatory statements, which is why it is best to consult an experienced lawyer to assist you with this case.
Tortious Interference with Business Relationship
These claims might be negligent or intentional. For intentional tort, it is essential for the plaintiff to provide proof that the defendant intentionally caused them harm or was aware of the potential harm that could be caused because of their actions. For negligent tort, the plaintiff must prove that the defendant was obliged to perform certain duties as per a contract but it was breached and that breach resulted in substantial harm.
In order to claim for damage in this case, it is important for the plaintiff to prove that the following elements were involved in the breach of contract which resulted in loss experienced by the plaintiff:
- There must be an economic relation which potentially could have benefitted the plaintiff.
- The defendant must have clear knowledge about this relation.
- The defendant must have breached the contract or had wrongful conduct.
- The defendant must be aware of the economic relation and the harm that would be caused due to their actions or must have intentionally disrupted the economic relation.
- The economic relation between two parties was disrupted.
- Substantial harm was caused to the plaintiff.
- There must be a casual connection between the harm incurred and the wrongful act.
Once the criteria have been met, the plaintiff can claim for damages.