The article has been written by Pravin Kumar Ray, a 3rd Year Law student at Sarsuna Law College, Kolkata

INTRODUCTION

The word ‘Tort’ is derived from the Latin term ‘torture‘ which means ‘to twist’ or a deviation from straight or right conduct and includes that conduct which is not straight or lawful. It is a growing branch of law and its main objective is to define individual rights and duties in the light of prevalent standards of reasonable conduct and public convenience. It provides pecuniary remedies for violations against the right of individuals.

DEFINITIONS BY RENOWNED JURISTS

“A tort is a civil wrong for which the remedy is a common law action for unliquidated damages and which is not exclusively the breach of a contract, or the breach of a trust, or the breach of other merely equitable obligation”. – Salmond.

“A tort is an infringement of a right in rem of a private individual, giving a right of compensation at the suit of the injured party”. – Fraser.

A tort arises when a person’s duty towards others is affected, an individual who commits a tort is called a tortfeasor, or a wrongdoer. And where there are multiple individuals involved, then they are called joint tortfeasors. Their wrongdoing is called a tortious act and they can be sued jointly or individually. The main aim of the Law of Torts is the compensation of victims.

Essential Elements of a tort

Three essential elements which constitute a tort are,

1. A Wrongful act or omission, and
2. Duty imposed by the law.
3. The act must give rise to legal or actual damage, and

It should be of such a nature that it should give rise to a legal remedy in the form of an action for damages.

Injuria sine damno means injury without damage. Such damage is actionable under the law of torts. It occurs when a person suffers legal damage instead of actual loss, i.e., his legal right is infringed by some other individual. In other words, this is an infringement of an absolute private right of a person without having suffered any actual loss.

In Ashby v. White, the plaintiff was a qualified voter at a Parliamentary election, but the defendant, a returning officer, wrongfully refused to take the plaintiff’s vote. No loss was suffered by such refusal because the candidate for whom he wanted to vote won the election. Plaintiff succeeded in his action. Lord Holt, C.J., observed as follows, “If the plaintiff has a right, he must of necessity have the means to vindicate and maintain it, and a remedy if he is injured in the exercise or enjoyment of it, and indeed it is a vain thing to imagine a right without a remedy, for want of right and wants of remedy are reciprocal”. “Every injury imports a damage, though it does not cost a party one penny and it is impossible to prove the contrary, for the damage is not merely pecuniary, an injury imports a damage, when a man is thereby hindered of his right. 

In Municipal Board of Agra v Asharfi Lal, the facts are, the Plaintiff (Asharfi Lal) was entitled to be entered as an elector upon the electoral roll. His name was wrongfully omitted from the electoral roll and he was deprived of his right to vote. It was held by the court that if any duly qualified citizen or person entitled to be on the electoral roll of a constituency is omitted from a such roll so as to be deprived of his right to vote, he has suffered a legal wrong, he has been deprived of a right recognized by law and he has against the person so depriving him, a remedy, that is, an action lies against a person depriving him of his right.

Damnum sine injuria which translates to damage without injury, here the party affected suffers damage which may also be physical but suffers no infringement of their legal rights. In other words, it means the occurrence of an actual and substantial loss to a party without any infringement of a legal right. Here no action lies in the hands of the plaintiff as there is no violation of a legal right.

Gloucester Grammar School Case held that the defendant, a schoolmaster, set up a rival school to that of the plaintiff. Because of the competition, the plaintiff had to reduce their fees. Held, the plaintiff had no remedy for the loss suffered by them. Hanker J. said, “Damnum may be absque injuria as if I have a mill and my neighbor builds another mill whereby the profits of my mill is diminished but if a miller disturbs the water from going to my mill, or does any nuisance of the like sort, I shall have such action as the law gives.”

Chesmore v. Richards, the plaintiff, a mill owner was using water for over 60 years from a stream that was chiefly supplied by the percolating underground water. The defendants dug a well on their land deep enough to stop the larger volume of water going to the plaintiff’s stream. Held, that the plaintiff has no right of action since it was a case of damnum sine injuria.

What Are Business Torts?

Business torts are wrongful acts done to a business that harms the business. Business torts are also called economic torts because they usually result in financial loss. They may cause profit loss, reputation damage, market share decline, and loss of competitive advantage. While tort law deals with a variety of misconduct including negligence, malpractice, and injuries, business torts involve both intentional and improper interference with the interests of another business. This interference is seen as an injury to the business in relation to the actual or potential loss of clients, competitive edge, market share, new business opportunities, existing and new business partners, and business relationships. Many business torts involve losses that may occur in the future, rather than losses that were experienced in the past. Because of this aspect, many business tort claims involve a complex determination of the plaintiff’s future or projected losses.

The following are the most common business torts that you should be aware of: –

INTERFERENCE WITH BUSINESS PRACTICES

One party may interfere with the business practices of another, which impacts the interests of the plaintiff. The defendant’s actions must be intentional, and they often involve interference with contracts or potential business opportunities. Injured parties can seek to recover damages when a business relationship has been disrupted or destroyed through the actions of a third party.

Although laws vary between states, many courts require a demonstration of “improper” interference. This occurs when the defendant has displayed some improper motive or actions that lie beyond the scope of the defendant’s rights. Cases in which one party is seeking to protect its own interests without resorting to false claims don’t constitute improper interference.

in the case of Greig v. Insole, the fundamental aspects of Tortious Interference were clearly laid down. It was held that five conditions were required to be fulfilled by a plaintiff in a suit for interference, in order to prove a case of unlawful interference:

1. first, there must be either direct interference with the performance of the contract or indirect interference with performance coupled with the use of unlawful means; 
2. secondly, the defendant must be shown to have knowledge of the relevant contract whether of the exact contract or in part;
3. thirdly, the intent to interfere with the relevant contract;
4. fourthly, damage to the Plaintiff which is more than nominal damage; and
5. fifthly, so far as is necessary, the plaintiff must successfully rebut any defense based on the justification that the defendant may put forward.

FALSE CLAIMS

Injurious falsehoods are another common business tort. Making false statements about another business, its products, or its services can lead to costly damages. Injurious falsehoods include libel, slander, and false negative reviews.

Communication of falsehoods comes from a third party, and the recipient of that message must understand that it relates to another party’s products, services, or brand. The injured party must demonstrate that the false claims resulted in damages. Some cases require plaintiffs to also specify which clients or customers were lost because of the claims made by the defendant.

In some jurisdictions, malice must be shown alongside the defendant’s intention of harming the plaintiff. Otherwise, plaintiffs may only need to provide evidence that the statement was known to be false when made by the defendant.

RESTRAINT OF TRADE

Restraint of trade is any activity that prevents another party from conducting business as they normally would without such a restraint. For instance, two businesses agreeing to fix prices in order to put another competitor out of business is an illegal restraint of trade.

Restraint of trade is not a tort in and of itself, but rather a legal doctrine that relates to a relatively broad and fluid range of torts. For example, tortious interference is a type of business tort in which one party interferes with a contract or business relationship. The party directly impacted by the interference may seek damages limited to the specific transaction by filing a tortious interference claim. 

However, the plaintiff may also file a restraint of trade claim if they are able to prove that the interference hindered their ability to conduct business in a broader sense. If the interference of a contract damaged the company’s reputation, for instance, then it may give rise to a restraint of trade claim.Some acts that give rise to a restraint of trade claim may seem entirely legal. For instance, two competing business owners discussing their pricing plans over a round of golf are exercising their freedom of speech. They may not come out and say it, but the subtext of the conversation may be construed as a conspiracy to fix prices if that is ultimately the result of this conversation. Thus, a third competitor who is driven out of business by the resulting price fixing may file a restraint of trade claim.

TRADE LIBEL

It takes a lot of work to run any organization, and a good reputation is especially important for the success of a small business. For this reason, negative comments from a customer or another company can be very detrimental to your business. Depending on the circumstances surrounding the comments, you may be able to file a trade libel claim against the person or business that made the comments about your business. Trade libel falls under the general umbrella of defamation and is defined as defamatory statements about the quality of a business’s services or products.

REMEDIES

Legal Remedies

Legal remedies are also known as damages. Damages are compensation given to a victim of tortious liability for their injuries and losses. They are given to help ease the effect of the breach on the victim. Damages can include general or special damages. 

• General damages are intangible and non-monetary losses the victim suffered. An example is business tort damages for reputational damage. 
• Special damages are damages that compensate for the specific financial loss the plaintiff suffered because of the injury. Special damages must be specifically proven. An example is lost profit.

Punitive Damages

Punitive damages are awarded to punish the defendant in a tort lawsuit. Courts award punitive damages when the actions of the defendant are so odious that the jury decides that general damages will not adequately compensate the plaintiff for their loss. 

Equitable Remedies

An injunction is the most common equitable remedy granted in tort claims. An injunction is an order of the court compelling a party to perform or not perform an action. The court awards injunctions when damages are not adequate compensation for the plaintiff’s loss.

BIBLIOGRAPHY

• https://www.chicagobusinesstriallawyers.com/
• https://www.gb.law/
• https://www.upcounsel.com/
• https://www.legalmatch.com/

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