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Tennessee businesses may face commercial disparagement

On Behalf of | Mar 7, 2019 | Business & Commercial Litigation

The business world in Tennessee can be cut-throat at times, but in general businesses act with integrity. Unfortunately, there will be those who will intentionally spread false information about a business, in order to prevent a third business from engaging in business deals or other commercial practices with that business, in order to cause that business to suffer financial losses. Depending on the circumstances, such unfair business practices could be considered commercial disparagement.

Commercial disparagement takes place when a person or business makes derogatory statements about another business, with the goal of keeping others from doing business with that business. It is different from defamation, which takes place when someone makes a false statement about another person, which is published and causes that person damages. Commercial disparagement is a business tort and protects the property rights of the business, not necessarily its reputation. Defamation lawsuits can be brought by anyone.

The elements of commercial disparagement are as follows. First, the false statement must be published — that is, conveyed to a third party. The person or entity publishing the statement must intend or reasonably believe that the statement would cause the business some sort of financial damages. These financial damages must, in fact, occur and finally, the person or entity making the statements must know they are untrue or act with reckless disregard to the veracity of the statement.

Commercial disparagement can cause a business serious financial damage. Businesses who are the victims of commercial disparagement can lose clients, partners, deals and ultimately, profits. Commercial disparagement is a business tort. Thus, Tennessee businesses who believe they have been subjected to commercial disparagement will want to seek professional guidance, so they can understand their legal options moving forward.