Business Relations

Question 1

Injurious Falsehood

Definition and Elements

Answer 1

The gist of this tort is interference with the prospect of sale or some other advantageous relationship with respect to P’s property. The property involved may be real or personal, tangible or intangible. But, as will ne seen, the interet protected goes well beyond property.

Elements:

1. False statement by D
2. Publication to others
   
   1. same as defamation: oral or written.
3. Statement Disparaging business, property, financial interests, etc., of P
   
   1. Disparaging: it is reasonably likely to discourage others from dealing with P.
      
      1. denying P’s ownership or quality of property, derogatory statements of P’s business in general, or statemetns interfereing with nonbusiness relations. Note: statements need not be defamatory, just false.
4. Intent
   
   1. Motive immaterial
   2. Scienter - required
   3. Negligent falsity
      
      1. Even though negligent falsity may not suffice, a statement may be actionable if negligent misrepresentation.
5. Causation and Damages
   
   1. Requirement of actual and proximate causation exists, however P must always prove proximately caused special damages.
   2. Slander of title: loss profits damages
   3. Trade libel: loss profits
6. Defenses
   
   1. Consent
   2. Truth
   3. Privilege
      
      1. the same privileges to defamation are recognized as privileges to disparagement.

Question 2

Interference with Economic Relations

Answer 2

Tort liability has also been imposed for intentional interference with P’s existing or prospective economic relationship with third persons. The two generally recognized facets of this theory of liability are:

1. interference with contract
2. interference with prospective advantage

Question 3

Interference with contract

Elements + Nature of Contract

Answer 3

1. Defendant’s Interference with Existing Contract
2. Intent
3. Causation
4. Special Damages

Nature of contract:

1. Illegal contracts: not eligible for protected
2. Unenforceable contracts: protected because it has to do with the interference of the relationship, not necessarily the contract.
3. Contracts terminable at will: protected for the same reason as unenforceable contracts.

Question 4

Interference with contract:

D’s interference

Answer 4

D must play some active role in causing the interference. Ex: it is not enought that D accepted an offer from the party with whom P had been dealing, even if D had knowledge of P’s relationship with that party.

1. Breach not required
   
   1. D must have only prevented or made performance more difficult.
2. Collective action
   
   1. Concerted action by a group (i.e., labor union) may give rise to liability.
3. Whether D may be a party
   
   1. No action for interference with contract lies against a party to that contract.
   2. Exceptions:
      
      1. Officer acting on own behalf/benefit
      2. Minority allows action for tortious breach of contract
      3. Majority allows suit for wrongful discharge.

Question 5

Interference with contract:

Intent

Answer 5

It must be shown that D acted with an awareness ofthe existing contract, and that she intended to cause the interferences that proximately resulted from her conduct. There is no liability imposed for mere negligent interference.

Question 6

Interference with contract:

Causation and Damages

Answer 6

Requirement of actual and proximate causation and damages.

1. Types of damanges recoverable:
   
   1. the modern view seems to allow recovery for all actual damages, consequential damages (unforeseen expenses), mental suffering, damage to reputation, and punitive damages in appropriate cases.

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Question 7

Interference with contract:

Defenses - privilege

Answer 7

The principal defense to this tort is one of privilege; i.e. D will not be liable if there was proper justification for the interference and only reasonable methods were employed. This requires prrof that onth the ends and the means were justfiable.

1. Ends
   
   1. Furtherance of nonpersonal interests
      
      1. acting for social good or protecting D’s or third person’s interest.
   2. Futherance of D’s own financial interest
      
      1. defense for protecting existing economic interests, but not merely for a prospective advantage.
2. Means
   
   1. D is not allowed to use unethical or wrongful means (ex: violence, lies, bribery, etc.).
   2. Threats of economic persuasion
      
      1. case by case basis, but the more unreasonable and coercive the threat, the more likely that it will defeat the privilege.
   3. Other torts
      
      1. For example, if D induces X to discontinue dealing with P because P works in organized crime, D may be liable for defamation and injurious falsehood, as well as wrongful interference with P’s contractual relations.
   4. Burden of proof: D has to justify actions, but P also has to show D’s conduct was wrongful by showing more than just the interference itself.