ConstructionPro Week, Volume: 5 - Issue: 30 - 08/05/2016

When Does Trashing a Competitor Become Legally Actionable?

By Bruce Jervis

 

Is it legally actionable when one construction company talks trash about another? Where does one draw the line between the scrappy competition of the marketplace and a violation of a competitor’s rights? This issue was recently presented to the Utah Supreme Court.

 

One contractor sued a competitor for intentional interference with economic relations. The defendant had made disparaging statements about the plaintiff to the plaintiff’s customers, prospective employees and bonding agent.

 

The court ruled that if the statements were defamatory – false and harmful – they were legally actionable. But if the statements were not objectively false and were merely intended to put the competitor at a disadvantage in the marketplace, they were not legally actionable.

 

Where do you think this line should be drawn? Surely there is a distinction between saying, “They don’t do quality work” and saying, “They’re engaged in fraudulent business practices.” But the distinctions are not always that sharp. Your comments are welcomed.

 

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