Legal Definitions - trade disparagement

Definition: Trade disparagement is a legal term that refers to the act of belittling someone's business, goods, or services with a false or misleading remark. It is a tort, which means it is a wrongful act that causes harm to someone else.

To prove trade disparagement, the plaintiff must show that:

1. The defendant made a disparaging remark
2. The defendant intended to harm the plaintiff's business, knew the statement was false, or recklessly disregarded the truth
3. The statement caused special damages to the plaintiff, usually by causing customers to choose a competitor's product instead.

Trade disparagement is also known as commercial disparagement, product disparagement, or injurious falsehood. It is different from trade defamation, which involves making false statements that harm a person's reputation.

Examples:

• A company spreads false rumors that a competitor's product is unsafe, causing customers to stop buying it and switch to their own product.
• A restaurant owner posts fake negative reviews about a nearby restaurant to make their own restaurant look better.

These examples illustrate trade disparagement because in both cases, false statements were made with the intention of harming a competitor's business. The false statements caused customers to choose a different product or restaurant, resulting in financial harm to the plaintiff.