What Constitutes Tortious Conduct and What Liability May Arise?

Arizona Business Owners Should Understand What Constitutes Tortious Conduct in Their Business Practices and What Liability May Arise Therefrom

Owning and operating your own business can be very fulfilling but, as most business owners discover, there can be thorns in that bed of roses. It takes a lot of time and energy to establish and maintain a business. There are the typical challenges of balancing income and assets, managing employees and product delivery and the day-to-day administrative tasks.

Business ownership becomes more difficult when the company suffers harm to its intangible assets such as intellectual property interests or business relationships. Civil wrongs committed against an organization – rather than a person or property – are often referred to as “business torts.” Resolutions to disputes arising from business torts are generally handled with civil litigation, if arbitration or mediation does not resolve the matter.

Common business torts

Forewarned is forearmed and it is important for every business owner to have a cursory understanding of the various types of business torts. Knowing the risks and available remedies may help you avoid future disputes.

Fraud: Business fraud can take many forms and can run the gamut from recording inaccurate work hours to misrepresentation or embezzlement. Fraudulent misrepresentation occurs when one person or entity intentionally falsifies important information in order to induce another to do something or to refrain from doing something. Falsifying financial records or statements is also another form of fraud.

Breach of duty: Officers and directors of business entities are fiduciaries and must act in the best interests of those to whom they answer, such as shareholders or partners. Acting in a way that is adverse to a business’s interests may be a breach of fiduciary duty. Insider trading by a corporate officer is an example of breaching his or her fiduciary duty to the shareholders.

Unfair competition: Tortious interference may occur when a company harms another company. Examples of these business torts may include antitrust violations, interference with business relationships, interference with prospective business advantage or interference with contractual relationships..
Infringement on intellectual property rights is also an actionable business tort and may include copyright infringement, illegal use of trademarks, trade names or software.

A lawyer can help

From the time you first decide to start a new business venture to the fulfillment of your succession plan or corporate dissolution, an experienced business lawyer can help. Seek the counsel of an attorney knowledgeable about civil litigation matters if you or your business suffers damages at the hands of another.


The Law Offices of William D. Black are ready to help with all personal injury cases ranging from medical malpractice to premises liability. Contact us today for a free case evaluation.