Truth If your car rental business denied that your composto to the same safety standards that your business does, and you can posht statement is true--for example, by reference to maintenance records and tests--you have a complete defence No defamation suitcan succeed against you. MINIMIZING YOUR RISK Avoid Potentially Defamatory Remarks Review all advertising and marketing material, especially fit identifies a competitie Advertise the benefits of your own product avoid criticizing the products of competitors Have a lawyer review all negative advertising. Train employees in media relations before they speak on behalf of your business or refer to a competitor Hire public relations staff if necessary Fair Comment The defence of fair comment is designed to encourage the expression of opinions It is based on the notion that people can and should make up their own minds about whether a statement is true. If your statement about your competitor is as opinion-an honest criticism, based on a sincere impression formed after your review of the facts-you may be able to succeed with a defence of fair comment Success generally depends on three things: whether the comment is made on a matter of public interest, whether there is a known or disclosed factual foundation for the opinion expressed, and whether the statement was fair--it cannot be made maliciously, with intent to harm. Therefore, if you have informally observed the state of your competitor's fleet over a number of months and judged it to be substandard, you are in a better position to raise the defence of fair comment than if your advertisement was based on no evidence at all. If your comment was motivated, at least in part, by a genuine concern for public safety, you may raise the defence of fair comment. Unsubstantiated or purely malicious comments are unlikely to constitute fair comment. Intentional Business Torts Three business torts that involve intentional actions are passing off, inducing breach of contract, and the unlawful means" tort. We discuss these torts below, Passing Off Using a product name or design that is similar to that of a more well-known and respected brand constitutes the tort of passing off. This tort protects the goodwill that a business has created and provides a remedy when a competitor misrepresents the origin of its product or service. For example, a watch manufacturer that calls its watches "Rollex" can expect to be sued by Roles, the well-known watchmaker. The similarity of names could confuse customers, who might think they are buying a quality brand when, in fact, they are buying a cheap knock-off. When the Rollex passing off tort based on one party's attempt to distribute its own knock-off productor service on the pretende that it is the productor service of another party watch breaks, the reputation of Rolex is diminished in the mind of the confused customer. Similarly, when Val-Nam's competitor creates a product and packaging that is deceptively similar to Val-Nam's electrical generator, and this knock-off product does not work, it harms Val-Nam's reputation and may give rise to a remedy under the tort of passing off. This kind of dishonesty in business is also addressed in consumer protection legislation (in provisions dealing with false, misleading, or deceptive representations) and in intellectual property law (in provisions dealing with trademarks). We discuss these topics in Chapter 6 and Chapter 11 under the headings "False. Misleading, or Deceptive Representations" and "Trademark Law," respectively. MINIMIZING YOUR RISK Name and Design Your Products Responsibly Research the marketplace before naming your products or business Avoid product design so similar to competitors products that it might confuse customers Register your trademarks Monitor the marketplace for product or business names that might adversely affect your business Inducing Breach of Contract When one party breaches a contract it has with another, the innocent party can sue for breach under the law of contract. The tort of inducing breach of contract supports the law of contracts by providing an additional remedy--this one in tort-in cases where the breaching party has been induced to commit the breach by a third party. Third parties can have a variety of motivations for inducing breaches of other parties contracts. A common example arises in the context of employment. For example, one hospital. seeking to hire a specialist whose skills are rare and in high demand, may encourage that specialist to breach a term employment contract with a different hospital. In a commercial context, a manufacturer in need of scarce component parts might induce a supplier to sell to it, at a premium price, a supply of the components that were promised to another manufacturer The elements that establish the tort of inducing breach of contract are: (1) a contract exists (one to which the plaintiff, but not the defendant, is a party); (2) the defendant has knowledge of the contract: (3) the defendant has the intention to induce a breach of the contract; (4) the defendant employs a direct inducement in an effort to cause the breach; and (5) damage is suffered by the plaintiff. The fourth element--that the defendant employed a direct inducement-has been the subject of many legal decisions. Courts have generally held that advising a contract party that a breach might be in its best interests is not enough to lead to liability, there needs to be something more. For example, the hospital in the above example would likely meet the threshold by actually entering into a contract of its own with the specialist. Where the breach is provoked by the defendant's intentional unlawful act, the facts fall within the definition of a newly defined tort: interference with economic relations by unlawful means. unlawful means tort based on intentional harm, through illegal acts, to a party's means of earning money The Tort of Unlawful Means" The ways in which one business may interfere with the business of another are limited only by the human imagination. Some methods of interference, such as defamation or inducing breaches of contract, are defined as particular torts. If a form of intentional damage by a third party to the economic interests of a business is not defined as a particular tort, it may be encompassed by the tort of interference with economic relations by unlawful means. In 2014, the Supreme Court of Canada (SCC) heard the appeal of a New Brunswick case (Al Enterprises Ltd v Bram Enterprises Ltd) that had been decided on the basis of an emerging tort that has come to be known as "inference with eco- nomic relations by unlawful means" or, more simply, the unlawful means tort." In dismissing the appeal, the SCC affirmed the existence and narrow scope of this tort. which has less broad application than did its predecessor, the tort of "interference with economic relations." The "new" unlawful means tort allows a plaintiff to sue a defendant for economic loss resulting from the defendant's unlawful act against a third party. The parameters of this new tort are outlined in the text box below. In its decision, the SCC made it clear that when considering cases based on this tort, courts should keep in mind the appropriate limits of tort law as a tool to regulate economic and competitive activity There is legislation in place in Canada to regulate business, and therefore it should only be the rare case that requires a court to turn to the common law tort to impose liability, Instead of creating a whole separate basis for liability outside of business law statutes, the tort of unlawful means can only be used to "stretch" liability for an act that caused harm to the plaintiff and would have been actionable by the third party against the defendant SCENARIO Unlawful Means: What Does It Mean? Val-Nam had been trying to convince the national chain Canada Survival Supplies Inc ICSS) to stock its electrical generators. The two parties were going back and forth in negotiations, but Valery was certain they were close to a deal. However, just as the last details were being ironed out. CSS suddenly withdrew from negotiations. They stated they were no longer interested in doing business with Val-Nam under any conditions. Valery was perplexed and frustrated. A supply contract with CSS had the potential to very significantly expand Val-Nam's business Valery was determined to figure out what happened and did a little digging, asking colleagues and business acquaintances if they had heard any rumours. Valery found out from a disgruntled ex-employee of Val-Nam's main competitor, Off-Grid Real Energy Solutions Ltd (OGRES), that OGRES had threatened CSS and convinced it to drop the deal with Val-Nam. OGRES has a long-term supply contract with CSS that covers a wide range of goods. OGRES told CSS that if CSS entered into a contract with Val-Nam, OGRES would stop supplying CSS even though it would be a breach of their contract. In fact, as negotiations between Val-Nam and CSS progressed, OGRES did stop supplying CSS. This caused significant economic harm to CSS and so CS5 withdrew from the Val-Nam negotiations In this situation, CSS obviously has a remedy against OGRES for breach of contract of the chain wants to pursue it. However, what is Val-Nam's remedy? OGRES did not do anything directly to Val-Nam, but its actions against CSS were clearly designed Truth If your car rental business denied that your composto to the same safety standards that your business does, and you can posht statement is true--for example, by reference to maintenance records and tests--you have a complete defence No defamation suitcan succeed against you. MINIMIZING YOUR RISK Avoid Potentially Defamatory Remarks Review all advertising and marketing material, especially fit identifies a competitie Advertise the benefits of your own product avoid criticizing the products of competitors Have a lawyer review all negative advertising. Train employees in media relations before they speak on behalf of your business or refer to a competitor Hire public relations staff if necessary Fair Comment The defence of fair comment is designed to encourage the expression of opinions It is based on the notion that people can and should make up their own minds about whether a statement is true. If your statement about your competitor is as opinion-an honest criticism, based on a sincere impression formed after your review of the facts-you may be able to succeed with a defence of fair comment Success generally depends on three things: whether the comment is made on a matter of public interest, whether there is a known or disclosed factual foundation for the opinion expressed, and whether the statement was fair--it cannot be made maliciously, with intent to harm. Therefore, if you have informally observed the state of your competitor's fleet over a number of months and judged it to be substandard, you are in a better position to raise the defence of fair comment than if your advertisement was based on no evidence at all. If your comment was motivated, at least in part, by a genuine concern for public safety, you may raise the defence of fair comment. Unsubstantiated or purely malicious comments are unlikely to constitute fair comment. Intentional Business Torts Three business torts that involve intentional actions are passing off, inducing breach of contract, and the unlawful means" tort. We discuss these torts below, Passing Off Using a product name or design that is similar to that of a more well-known and respected brand constitutes the tort of passing off. This tort protects the goodwill that a business has created and provides a remedy when a competitor misrepresents the origin of its product or service. For example, a watch manufacturer that calls its watches "Rollex" can expect to be sued by Roles, the well-known watchmaker. The similarity of names could confuse customers, who might think they are buying a quality brand when, in fact, they are buying a cheap knock-off. When the Rollex passing off tort based on one party's attempt to distribute its own knock-off productor service on the pretende that it is the productor service of another party watch breaks, the reputation of Rolex is diminished in the mind of the confused customer. Similarly, when Val-Nam's competitor creates a product and packaging that is deceptively similar to Val-Nam's electrical generator, and this knock-off product does not work, it harms Val-Nam's reputation and may give rise to a remedy under the tort of passing off. This kind of dishonesty in business is also addressed in consumer protection legislation (in provisions dealing with false, misleading, or deceptive representations) and in intellectual property law (in provisions dealing with trademarks). We discuss these topics in Chapter 6 and Chapter 11 under the headings "False. Misleading, or Deceptive Representations" and "Trademark Law," respectively. MINIMIZING YOUR RISK Name and Design Your Products Responsibly Research the marketplace before naming your products or business Avoid product design so similar to competitors products that it might confuse customers Register your trademarks Monitor the marketplace for product or business names that might adversely affect your business Inducing Breach of Contract When one party breaches a contract it has with another, the innocent party can sue for breach under the law of contract. The tort of inducing breach of contract supports the law of contracts by providing an additional remedy--this one in tort-in cases where the breaching party has been induced to commit the breach by a third party. Third parties can have a variety of motivations for inducing breaches of other parties contracts. A common example arises in the context of employment. For example, one hospital. seeking to hire a specialist whose skills are rare and in high demand, may encourage that specialist to breach a term employment contract with a different hospital. In a commercial context, a manufacturer in need of scarce component parts might induce a supplier to sell to it, at a premium price, a supply of the components that were promised to another manufacturer The elements that establish the tort of inducing breach of contract are: (1) a contract exists (one to which the plaintiff, but not the defendant, is a party); (2) the defendant has knowledge of the contract: (3) the defendant has the intention to induce a breach of the contract; (4) the defendant employs a direct inducement in an effort to cause the breach; and (5) damage is suffered by the plaintiff. The fourth element--that the defendant employed a direct inducement-has been the subject of many legal decisions. Courts have generally held that advising a contract party that a breach might be in its best interests is not enough to lead to liability, there needs to be something more. For example, the hospital in the above example would likely meet the threshold by actually entering into a contract of its own with the specialist. Where the breach is provoked by the defendant's intentional unlawful act, the facts fall within the definition of a newly defined tort: interference with economic relations by unlawful means. unlawful means tort based on intentional harm, through illegal acts, to a party's means of earning money The Tort of Unlawful Means" The ways in which one business may interfere with the business of another are limited only by the human imagination. Some methods of interference, such as defamation or inducing breaches of contract, are defined as particular torts. If a form of intentional damage by a third party to the economic interests of a business is not defined as a particular tort, it may be encompassed by the tort of interference with economic relations by unlawful means. In 2014, the Supreme Court of Canada (SCC) heard the appeal of a New Brunswick case (Al Enterprises Ltd v Bram Enterprises Ltd) that had been decided on the basis of an emerging tort that has come to be known as "inference with eco- nomic relations by unlawful means" or, more simply, the unlawful means tort." In dismissing the appeal, the SCC affirmed the existence and narrow scope of this tort. which has less broad application than did its predecessor, the tort of "interference with economic relations." The "new" unlawful means tort allows a plaintiff to sue a defendant for economic loss resulting from the defendant's unlawful act against a third party. The parameters of this new tort are outlined in the text box below. In its decision, the SCC made it clear that when considering cases based on this tort, courts should keep in mind the appropriate limits of tort law as a tool to regulate economic and competitive activity There is legislation in place in Canada to regulate business, and therefore it should only be the rare case that requires a court to turn to the common law tort to impose liability, Instead of creating a whole separate basis for liability outside of business law statutes, the tort of unlawful means can only be used to "stretch" liability for an act that caused harm to the plaintiff and would have been actionable by the third party against the defendant SCENARIO Unlawful Means: What Does It Mean? Val-Nam had been trying to convince the national chain Canada Survival Supplies Inc ICSS) to stock its electrical generators. The two parties were going back and forth in negotiations, but Valery was certain they were close to a deal. However, just as the last details were being ironed out. CSS suddenly withdrew from negotiations. They stated they were no longer interested in doing business with Val-Nam under any conditions. Valery was perplexed and frustrated. A supply contract with CSS had the potential to very significantly expand Val-Nam's business Valery was determined to figure out what happened and did a little digging, asking colleagues and business acquaintances if they had heard any rumours. Valery found out from a disgruntled ex-employee of Val-Nam's main competitor, Off-Grid Real Energy Solutions Ltd (OGRES), that OGRES had threatened CSS and convinced it to drop the deal with Val-Nam. OGRES has a long-term supply contract with CSS that covers a wide range of goods. OGRES told CSS that if CSS entered into a contract with Val-Nam, OGRES would stop supplying CSS even though it would be a breach of their contract. In fact, as negotiations between Val-Nam and CSS progressed, OGRES did stop supplying CSS. This caused significant economic harm to CSS and so CS5 withdrew from the Val-Nam negotiations In this situation, CSS obviously has a remedy against OGRES for breach of contract of the chain wants to pursue it. However, what is Val-Nam's remedy? OGRES did not do anything directly to Val-Nam, but its actions against CSS were clearly designed