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What is Trade Libel?


Owning a business is no walk in the park. A business owner will face many challenges, whether they are newly established or a veteran business that’s been around for decades. While finances are one of the biggest issues, many entrepreneurs face other business torts, such as lies, gossip and issues with their reputation. This is often caused by companies looking to defame their competition.

This type of defamation is called trade libel. Trade libel is also known as product disparagement and

involves false remarks about a company. These comments can be detrimental to one’s business and cause them to suffer negative effects such as revenue loss. These negative comments can be spoken or written, but trade libel is often written, since untrue spoken words are called slander.

There are four elements involved in trade libel. If all four elements of these elements are present, a person may be able to recover compensation from a successful defamation claim.

  1. The statement was not true.
  2. The statement was published.
  3. The statement was not privileged.
  4. The statement caused damages to the victim.

What does this mean? First, the statement must be false. If it is true, then a person cannot file a case. A negative opinion does not count as a false statement, so if a customer was upset over a product they bought from a company, they have the right to write a negative review.

“The statement was published” does not necessarily mean that the statement has to be published in a magazine, newspaper or online. It just has to be communicated to a third party, such as through word of mouth.  The statement must have caused damages, which means that the company was harmed in some way. Pain and suffering and lost revenues would be common examples. Understanding whether or not the statement was privileged is discussed in further detail below.

In any case, people and companies need to watch what they say. Spreading lies can cause them to be sued for trade libel, which can lead to harsh punishment.

Privilege Defense

A person cannot file a defamation claim if the comment was privileged. There are two types of privilege. Absolute privilege refers to comments made in court under oath. Because people are encouraged to speak honestly in such an environment, the person making the comments cannot be  punished.

Qualified privilege is often given to the media and other outlets so they can freely report information of public concern. For example, articles about criminal activity would be considered qualified privilege, as long as they are reported accurately.  Employment information is also considered qualified privilege, even though it may not be considered public concern.

Seek Legal Help

Trade libel may seem like normal everyday gossip, but it is very harmful and can ruin a company’s reputation. This type of defamation can truly hurt a business and affect its revenue.

Fort Lauderdale business torts lawyer Edward J. Jennings, P.A. can assist you with your business matters and make sure your company is running smoothly. To schedule a consultation, call 954-764-4330 or fill out the online form.



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