Business Torts

In its simplest form, a contract is a promise to perform or pay. A party is agreeing to do something (perform) or they can be liable for damages (pay). 

The basic elements of a contract are an offer, acceptance of the offer, consideration, and a meeting of the minds (i.e., mutual understanding). In the law, "consideration" refers to anything of value, whether monetary or otherwise. Sometimes a promise not to do something can be consideration.

Contracts come in all shapes and sizes. Some are high value and some are low value. Some are dozens or hundreds of pages, while some are a single page. Some have specific terms about seeking enforcement, e.g., a mandatory arbitration clause, whereas others allow a lawsuit in court. 

It is hard to avoid entering into contracts for most people and businesses on a day to day basis, as the "terms and conditions" frequently clicked through with any new tech product or app is a form of a contract. Insurance benefits, which pretty much everyone has in one form or another, is governed by a contract.

Most contracts include a provision saying that, if one party breaches, the other party can recover attorney's fees when seeking enforcement of the contract (if they prevail). Even if a contract does not specifically have this term, Texas creates this term by law. It is found at Civil Practice and Remedies Code, Chapter 38. 

Texas fiercely protects capitalism, the open market, and competition. So claiming another business tortiously (i.e., illegally) interfered with a business relationship is difficult to prove. But these claims do occasionally occur. 

To prove this claim, it requires the plaintiff to show that (1) there was a reasonable probability that the plaintiff would have entered into a business relationship with a third party; (2) the defendant either acted with a conscious desire to prevent the relationship from occurring or knew the interference was certain or substantially certain to occur as a result of the conduct; (3) the defendant's conduct was independently tortious or unlawful; (4) the interference proximately caused the plaintiff injury; and (5) the plaintiff suffered actual damage or loss as a result. Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 923 (Tex. 2013).

The trickiest part is often the third element, proving the conduct was "independently tortious or unlawful." What does this mean? Well it basically means the defendant did something illegal or which, on its own, would be grounds for a lawsuit. For instance, perhaps a commercial real estate tenant overstayed their lease and stopped paying, resulting in the building owner being unable to lease the property to a new tenant. This could potentially be an independent claim---trespass. Another example would be if a company says false, negative things about a competitor company when interfering in a business relationship, perhaps to try to win a contract. Again this could be an independent claim---defamation. In both cases, the person or business who has been wronged may have a tortious interference claim, in addition to the other claim.

These cases can be very complicated, so it is important to choose a law firm with experience. Contact Cronauer Law's Texas office in Austin today for a free case evaluation.

A fiduciary duty is a special, exceptionally high, duty to another person or entity. It is more than just a contractual or business relationship. It is a duty to act for another's best interests, whether it is convenient and whether or not the person or entity is happy with the decision.

Texas generally recognizes a fiduciary duty as entailing the duties of loyalty, care, obedience, and good faith. With those often comes associated obligations of confidentiality, candor, and fairness.

Generally, the elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary duty, (2) breach of the duty, (3) causation, and (4) damages. First United Pentecostal v. Parker, 514 S.W.3d 214, 220 (Tex. 2017).

If you still have questions, you can contact Cronauer Law's Texas office in Austin today!