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Economic Torts Overview

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Inducing Breach of Contract

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This occurs when one party intentionally persuades another to break a contract, resulting in financial loss to a third party. Example: A company entices an employee to leave their current employer, who has a contract with the employee, causing a breach of contract.

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Passing Off

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Occurs when one entity misrepresents its goods or services as those of another, causing consumer confusion. Example: Selling handbags with a logo deceptively similar to a well-known brand.

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Tortious Interference with Business

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This involves improperly interfering with the business operations of another, resulting in economic harm. Example: A competitor spreads false rumors about a company’s products to drive away customers.

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Fraudulent Misrepresentation

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Involves a false statement that is knowingly made to induce another party into a contract, causing them harm. Example: Selling a car by knowingly claiming it has never been in an accident when it has.

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Conspiracy

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This tort occurs when two or more parties agree to an action to harm a third party's trade or business. Example: Two companies collude to fix prices, which harms other competitors.

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Deceit

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This is when one party makes a false representation with the intention to deceive the other, causing them loss. Example: Misrepresenting the financial status of a business in sale negotiations.

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Unlawful Interference

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When an intentional act by one party directly causes harm to another's business without justification. Example: A competitor blackmailing a supplier to stop doing business with another company.

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Economic Duress

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This tort happens when an unlawful economic pressure is applied to compel a person to enter into a contract. Example: Threatening to cancel a contract unless additional payments are made.

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