What is defamation?
Your reputation is one of your business’s most valued assets. Reputation damage can result in grave financial losses. Business owners have legal rights against damaging false statements made about their business by competitors or other people. These lawsuits are complex, and business owners need to understand what defamation means. We provide an overview of these laws below.
While laws vary by state, generally, any defamation lawsuit involving a business must meet three criteria:
- The actionable statement must be untrue.
- It must be made in writing or verbally to another person.
- It must cause damage to the business.
The statement must be false to constitute defamation. Truth is always a defense against a defamation claim. Your case is viable if you can objectively prove that the harmful statement was false. For instance, if a competitor makes a statement that your business does not hire minorities, you could prove the claim was false through employee records showing that you actively hire minorities.
Any claim for defamation must show that the false statement was made to third parties. This could include written publication of the statement, such as in a newspaper or Internet forum. It could also involve verbal communication of the falsehood to a third party.
You need to demonstrate that the statement resulted in damages to your business or its reputation. Often, a defamatory statement will result in loss of customers or financial losses due to your damaged reputation. Evidence of loss of business will generally be sufficient to show that the defamatory statement caused your harm. In some states, you can additionally seek punitive damages against the defendant. Punitive damages are intended to punish the defendant for unlawful conduct.
Business defamation cases are a complex type of civil litigation action. Corporations have a limited time within which to bring a lawsuit after publication or discovery of the harmful, untrue statement.
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