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Home > Civil Legal Matters > Business Dealings

While much business litigation is based on contract law, wrongful conduct in business transactions may also give rise to a claim based on tort law.

Intentional Interference with Contractual Relations.
Georgia law recognizes this claim where the defendant: (1) acted improperly and without privilege; (2) acted purposely and maliciously with the intent to injure; (3) induced a third party or parties not to enter into or continue a business relationship with the plaintiff; and (4) caused the plaintiff some financial injury.

The defendant's actions must involve conduct that goes substantially beyond fair competition and expression of free speech. Examples include: soliciting away a substantial portion of plaintiff's employees for the purpose of destroying his business, persuading a bank official not to lend plaintiff any more money, and firing a plaintiff rather than paying a fee to his employment agency.

The mere failure to carry out the terms of a contract does not give rise to this tort claim.

Interference with Business or Employment Relations
The distinction between intentional interference with contractual relations and interference with business or employment relations is often blurred in Georgia law. However, there is a distinction.

Interference with contractual relations violates rights under some specific contract.

Interference with business or employment relations involves a more general effort to harm the plaintiff's business, to drive him out of business, or to wrongfully interfere with employment or employees.

Misappropriation of Trade Secrets and Ideas
The elements of a Georgia tort claim for wrongful appropriation or conversion of an unpatented or unpatentable idea or product are: (1) the idea must be novel; (2) the disclosure of the idea must be made in confidence; (3) the idea must be adopted and made use of by the defendant; and (4) the idea must be sufficiently concrete in its development to be usable. This tort claim may supplement intellectual property rights under patent and copyright laws.

Defamation of Title
This involves impugning the plaintiff's title in property. The elements are: (1) defendant uttered and published slanderous words; (2) the words were false; (3) they were malicious; (4) the plaintiff sustained damage thereby; and (5) the plaintiff possessed an estate in the property slandered.

Actual Fraud
This involves moral guilt and includes the following elements: (1) a false representation made by the defendant; (2) knowledge that the representation was false when it was made; (3) an intention to induce the plaintiff to act or refrain from acting in reliance on the representation; (4) a justifiable reliance on the representation; and (5) damage to the plaintiff proximately caused by the misrepresentation.

The plaintiff must state all circumstances surrounding the fraud with particularity, but because fraud is itself subtle, slight circumstances may be sufficient to prove fraud.

Fraud may be carried out through overt acts and words, or by suppression of a material fact that one is under an obligation to communicate due to a confidential relationship or due to particular circumstances of the situation.

Constructive Fraud
This type of fraud does not require moral guilt, but is based on any act contrary to duty, trust, confidence justly reposed that is contrary to good conscience and injures another. It is an equitable doctrine only, and does not give rise to a tort claim for damages.

Negligent misrepresentation
One who, in the course of his business, profession or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transaction, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

The Georgia Fair Business Practices Act also includes statutory remedies for an interesting varieties of unfair acts and practices in commerce.

In today's online world a lawyer's traditional role is still of vital importance. That is why I give a free consultation to any Georgia resident with a legal problem in Georgia. There is no obligation to hire me to pursue your legal problem, however, rest assured that anything discussed through my free online consultation will be held in the strictest of confidence. I have tried to make my web site reflect who I am as an attorney and the areas in which I practice. Feel free to browse its pages and to contact me.



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