Business Torts and E-Commerce

Chapter 6

Business Torts and E-Commerce

I. Disparagement

  • Slander of Title
  • Trade Libel
  • Defenses


Deals with monetary damages that a business person suffers from an injurious falsehood to his or her business product

If ONLY the reputation of a business person has been injured, the cause of action lies in DEFAMATION

When alleging disparagement, the plaintiff has the burden of proof to show the falsity of the statement

A. Slander of Title

Occurs when there is either an oral or written false and unprivileged statement about the title to real or personal property that causes actual monetary damages to the plaintiff

A slander of title tort is designed to protect the “marketability” of the property

B. Trade Libel

Trade libel is an intentional disparagement on the “quality” of another’s property (goods or services) that results in monetary damage

An important feature to note is that the plaintiff may not use a claim of mental distress as a type of damage

C. Defenses

The 3 basic defenses to disparagement are:


Absolute Privilege

Qualified Privilege

II. Appropriation of Likeness for Commercial Purposes

California has long recognized a common law right of privacy

The difference between the COMMON LAW RIGHT, and the STATUTORILY GRANTED RIGHT, is that under the statute the plaintiff must prove that the use of a person’s name or likeness was knowingly made

III. Interference With Economic Relations

  • Inducing a Breach of Contract
  • Interference with a Contractual Relationship
  • Interference with a Prospective Economic

Advantage of Another

A. Inducement to Breach Another Person’s Contract

This theory is designed to protect a person from intentional acts that are undertaken to produce an actual breach of a valid contract

A plaintiff must prove:

  • that there is an existing valid contract
  • that the defendant had knowledge of the contract

Knowledge alone is not enough, the defendant must also have intended to produce the breach of the contract

B. Interference with
Contractual Relations

This theory is designed to protect against intentional acts that do not necessarily result in a contract breach but merely makes the plaintiff’s performance of the contract more expansive or burdensome

This tort requires proof that:

Plaintiff had existing valid contract with 3rd party

Defendant had knowledge of the contract

Defendant’s intentional and unjustified acts were designed to interfere with or disrupt the contract

There was actual interference

Damages were suffered by plaintiff as a result of defendant’s actions

C. Interference with a Prospective Economic Advantage

This third theory is designed to protect against intentional acts, causing harm to an economic relationship that is likely to produce an economic benefit

Plaintiff must prove:

That there was an economic relationship with a 3rd party that offered the probability of a future economic benefit to the plaintiff

That the defendant had knowledge of this relationship

That there was an actual disruption of the relationship and damages were suffered by the plaintiff as a result of the defendant’s actions

IV. E-Commerce

  • Online Crimes and Torts

A. Online Crime

Crimes that can be committed using computers:




Financial theft

Identity theft


Theft of trade secrets

Intellectual property

Federal Acts include:

The Computer Fraud and Abuse Act of 1984, amended by

The National Information Infrastructure Protection Act of 1996

B. Online Torts

The online environment is NOT immune from torts

It is an ongoing challenge as hackers and online thieves become increasingly sophisticated

In 2005, California enacted the Anti-Phishing Act making it a crime:

“for any person, by means of a Web page, electronic mail message, or otherwise through use of the Internet, to solicit, request, or take any action to induce another person to provide indentifying information by representing itself to be a business without the authority or approval of the business.”

C. Examples of Online Crimes and Torts

Cyber Espionage – deploying viruses that clandestinely observe or destroy data in the computer systems of government agencies and large enterprises

Cyber Defamation – misuse of online review websites

Piracy of Intellectual Material Online –