Economic Torts

Question 1

Define fraud.

Answer 1

Intentional misrepresentation in a business deal.

1. D made a misrepresentation of fact
2. misrepresentation was intentional or reckless
3. D intended to induce P’s reliance
4. P actually relies

Question 2

If D lies to P on purpose with the goal of screwing P, P falls for it, and P gets screwed, what tort has D committed?

Answer 2

Fraud.

Question 3

Define malicious prosecution.

Answer 3

1. D initiates criminal/civil proceedings against P
2. without probable cause
3. case terminates favorably for P
4. D brought it solely for an improper purpose

Question 4

Define prima facie tort (ONLY FOR NY).

Answer 4

Intentional infliction of economic harm without justification.

It’s a catch-all for economically spiteful behavior.

Question 5

If a radio station DJ has a personal grudge against Label X and refuses to play any song under that label even though the songs are typically top 40 on the charts, has DJ committed a tort?

Answer 5

Yes - in NY - a prima facie tort.

Question 6

If D intentionally inflicts economic harm on P without proper justification, what tort has D committed?

Answer 6

IN NY ONLY - a prima facie tort.

Question 7

Define inducing a breach of contract.

Answer 7

1. there’s a valid contract between P and X
2. D knows of this contract
3. D persuades X to abandon the contract with P
4. X breaches the contract with P
5. D is not in an advisory role with X
   (e. g. parent, attorney, accountant, clergyman, etc.)

Question 8

Define theft of trade secrets.

Answer 8

1. Valid trade secret

2. D took the secret by improper means

Question 9

What is a valid trade secret?

Answer 9

1. info provides a business advantage to the possessor
2. info is not generally known
3. owner takes reasonable measures to keep the info secret

Question 10

What are improper means for purpose of theft of trade secret tort?

Answer 10

1. Traitorous Insider: originally got the secret through legitimate means, but used it by breaching a duty of confidentiality. OR
2. Industrial Spy: stranger who learns the secret by unsavory means (bribery, breaking and entering, hacking, etc.)