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elements of a defamation claim

A business’s reputation can lead to either great success or complete failure. Now, when a disparaging comment can be made instantly online and dispersed to thousands, your business may suffer significant harm with the click of a button.

When someone makes a false claim about your business, you want to do as much as you can to protect your reputation. This article provides information on the types of claims you can bring, Texas defamation laws, and how to avoid business defamation. 

What Is Business Defamation?

Defamation is when someone makes a false statement about a person or entity and causes damage to their reputation. These statements can be either written (known as libel) or spoken (known as slander).

If a person spreads false information about your business that causes harm, there are two possible claims you can file: defamation and business disparagement. The differentiating factor between the two claims is who suffers the harm.

A defamation claim alleges harm to an individual’s reputation. For example, the individual could be the business owner. Business disparagement claims, on the other hand, allege harm to a business’s economic interest.

As the Texas Supreme Court summarizes, “The two torts differ in that defamation actions chiefly serve to protect the personal reputation of an injured party, while a business disparagement claim protects economic interests.”

It is possible to file both types of claims to protect your personal reputation and recover economic losses to your business. At Massingill Attorneys & Counselors at Law, we can help determine which type of claim makes the most sense for your business.

Texas Defamation Laws

To be successful in a lawsuit for defamation or business disparagement, the plaintiff must prove all elements of the claim. 

Elements of a Defamation Claim 

To prove defamation in Texas, the plaintiff needs to show evidence of three elements. 

Defendant published a false statement

The false statement can be either written or spoken. Keep in mind that a negative comment about your business is not the same as a false statement.

Statement was defamatory toward the plaintiff

A statement is defamatory when it harms the reputation of a person or entity.

Defendant acted with required degree of fault

Depending on who the plaintiff is, the defendant must have made the statement with a certain level of fault. For private individuals, which is likely how a business owner will be classified, the degree of fault is negligence.

When the plaintiff is a public official or public figure, the defendant must have acted with actual malice.

There is a one-year statute of limitations to file a lawsuit for defamation in Texas. If your business suffers economic harm more than a year after the false statement is made, you may be able to file a business disparagement claim.

Elements of a Business Disparagement Claim 

If your business suffered economic losses because of a false statement, you may consider filing a business disparagement lawsuit. This type of claim requires a plaintiff to prove the defendant did the following:

  • Published false or disparaging information about the business,
  • Acted with malice,
  • Lacked privilege to make the statement, and 
  • Caused special damages to the business. 

Let’s explore each of these elements in detail. 

Publication of false/disparaging statement

First, the statement must be published, meaning the disparaging words could either be spoken or written to someone. False comments made in a private conversation likely will not count. 

If a person makes a true statement that harms your business, you will also not have a valid claim. The comment must be false. 

Malice

Malice is the intent of the defendant. The person or entity making the comment must have known it was false, or not cared whether or not it was false, and made the statement anyway. 

Lack of privilege

If the defendant had a legal privilege to make the false statement, then the business disparagement claim will fail. Examples of privilege include statements made under oath during a judicial proceeding or statements made by members of state or federal legislatures during debates. 

Special damages

The plaintiff must show that the business suffered special damages as a direct result of the disparaging statement. This means that you must be able to prove economic loss to your business. The defendant’s actions must have stopped others from doing business with you.

There is a two-year statute of limitations to file a business disparagement lawsuit in Texas.

How to Avoid Business Defamation

A hurdle for businesses is tackling online defamation. From Yelp to Google reviews, the opportunity to spread false information is huge. 

As a preemptive measure, you may include an anti-disparagement provision in your contracts with customers or clients. However, this would only apply to parties to the contract.

Some businesses hire a reputation management service. These companies go after those publishing defamatory information and threaten legal action. They also have the ability to publish enough positive information about your business, using search engine optimization (SEO) tools, to bury the false statements.  

If the damage has been done, your only option may be to file a lawsuit for defamation or business disparagement.

Remember, not everyone is going to like you. You won’t always be able to prevent someone from making a negative comment or review about your business. 

Contact a Business Defamation Lawyer Today

Defamation against a business can have long-lasting personal and economic impacts. If you or your business has suffered harm from a false statement, contact Massingill Attorneys & Counselors at Law. 

Texas defamation law can be tricky, but we take pride in simplifying the complex so you feel confident in our representation. With over 100 five-star Google ratings, we continue to deliver quality work to our clients.

For a free consultation, call our office directly at 512-601-6794 or contact us online.  

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