An injurious falsehood is a false statement that causes intentional damage to a person's business, not to a person. In a lawsuit, businesses would need to establish several elements in order to prove the tort of injurious falsehood.
First, the statement must be intentional, false, and in some way disparaging of the plaintiff. The statement must also have been made with malice, meaning that the person who made the statement intended to harm the business. It is the plaintiff's burden to prove the statement is false and not the defendant's burden to prove truth. However, truth would be a defense.
The second element is that the statement be published. That means communicated to a third party, not just made by the defendant to the plaintiff.
Third, the plaintiff must have suffered harm. It is often difficult to prove harm, and this element might require the testimony of other people who heard the statement.
Finally, there must be actual economic loss. Again, this is difficult to prove and quantify.
There are three specific types of injurious falsehood:
- disparagement of property
- slander of goods
- trade libel
A disparagement of property is when someone publishes disparaging or derogatory statements about a business that would negatively affect the business. An example of a disparagement of property is an online review of a business that is defamatory (meaning untrue things are intentionally written about the business) and directly causes customers to abandon the business.
A slander of goods (also called slander of title) is a false claim that a plaintiff does not own the property they are dealing in. An example of this tort would be if one person filed a lawsuit against another, claiming that the boundary line of a property that is for sale is wrong and should be adjusted. The other party might counterclaim and sue for slander of title, saying that the original suit incorrectly slanders their title and that the false statement is now public record.
Trade libel is false statements about the quality of the plaintiff's goods so that customers will be discouraged from buying them. For instance, a salesperson for a shoe brand might post false online reviews for a different brand of shoes, claiming that they were so poorly made that the salesperson had to have foot surgery.The tort of injurious falsehood is closely related to the tort of defamation. For all of these torts, very similar defenses apply (truth, opinion, no damages, privilege, or consent), and very similar burdens of proof also apply. Therefore, someone who pleads a tort of injurious falsehood will probably also plead a tort of defamation.