An economic tort is injury to a person’s business or business interest that results in damages. The four main categories of economic tort are conspiracy, inducement to breach of contract, unlawful interference, and intimidation. Courts are often careful to balance the claims of an economic tort lawsuit and the right to fair competition under business and labor laws. Unions are often sued for tort damages, with the primary claims being based on intimidation or conspiracy. Plaintiffs may also claim tort damages based on breach of contract lawsuits in employment or business relations.
The aim of economic tort law is to protect the wealth of individuals who conduct a trade. Injuries that go beyond the scope of a pure economic loss, which is financial loss only and not a physical, mental, or emotional injury, are often not considered as tort damages. For example, damages that result from a loss of product value because of a defendant’s unlawful interference with the plaintiff’s production of goods is a pure economic loss. The plaintiff would sue under a broader tort law if he or she also suffered a physical injury as a result of the defendant’s interference. Plaintiffs often file these tort claims as secondary claims, and the primary claims are often based on tort, contract, or other laws.
A conspiracy economic tort is when two or more persons agree to cause damage to a business by an unlawful act. Crimes, torts, or breaches of contract are common unlawful acts that are proved in these types of tort lawsuits. An inducement to breach of contract is when a defendant convinces a third party to break a contract with the plaintiff or uses unlawful means to stop the contract from being performed according to its terms. Unlawful interference is when the defendant is accused of unlawful conduct that results in an unfair competitive advantage over the defendant. Intimidation occurs when the plaintiff claims that the defendant made threats that resulted in damages to the plaintiff’s business.
Good faith and fair dealing are often expectations of business owners when conducting a business or trade, and these expectations are protected by economic tort laws. Contracts often imply both, and when there’s a breach of good faith or fair dealing in performing contractual obligations, there is a resulting tort. The plaintiff would still have to prove pure economic loss damages, but he or she could also claim tort damage based on lack of good faith and fair dealing claims.