Torts are injuries to business interests resulting in damage, with four main categories: conspiracy, inducement to breach contract, tort, and intimidation. Economic Liability Act protects individuals carrying on a business, but pure economic loss is not considered wrongful damages. Good faith and fair dealing are protected by tort laws.
A tort is an injury to a person’s business or business interest that results in damage. The four main categories of tort are conspiracy, inducement to breach contract, tort, and intimidation. Courts are often careful to balance the claims of a tort lawsuit against the right to fair competition under trade and labor laws. Unions are often sued for tort damages, with the main claims based on intimidation or conspiracy. Plaintiffs may also seek tort damages based on breach of contract lawsuits related to employment or employment relationships.
The purpose of the Economic Liability Act is to protect the wealth of individuals carrying on a business. Injuries that are beyond the scope of a pure economic loss, which is only a financial loss and not a physical, mental or emotional injury, are often not considered wrongful damages. For example, damages that result from a loss in product value due to a defendant’s tortious interference in the production of plaintiff’s goods is a pure economic loss. The plaintiff would sue under a broader tort law if he or she also suffered bodily harm as a result of the defendant’s interference. Plaintiffs often file these tort claims as secondary claims, and the primary claims are often based in tort, contract, or other law.
An economic tort of conspiracy is when two or more people agree to cause harm to a business with a tort. Crimes, torts, or breaches of contract are common torts that are proven in these types of lawsuits. An inducement to breach of contract is when a defendant persuades a third party to terminate a contract with the plaintiff or uses unlawful means to prevent performance of the contract on its terms. Tort interference is when the defendant is accused of tort that results in an unfair competitive advantage over the defendant. Intimidation occurs when the plaintiff claims that the defendant made threats that caused damage to the plaintiff’s business.
Good faith and fair dealing are often expectations of entrepreneurs when conducting a business or trade, and these expectations are protected by tort laws. Contracts often involve both, and when there is a breach of good faith or fair dealing in the performance of contractual obligations, there is tort that ensues. The plaintiff would still have to prove damages for pure economic loss, but could also seek tort damages based on lack of good faith and fair treatment claims.
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