Legal Memorandum: Business Disparagement Claims in NY

Issue: What is Business Disparagement?

Area of Law: Business Organizations & Contracts
Keywords: Business disparagement; Establishment of a liability
Jurisdiction: New York
Cited Cases: None
Cited Statutes: None
Date: 03/01/2010

The elements of a product or business disparagement claim are an intentional communication to a third person, of a false statement of fact, that denigrates the quality of the plaintiff’s goods or services, without privilege, and results in a direct financial loss to the plaintiff whose interest is disparaged.  Kitchen v. Sothebys, No. SC 2259/07, 18 Misc. 3d 1132(A) (N.Y. City Civ. Ct. Feb. 19, 2008) (citation omitted).  The key to a claim for business or product disparagement is the proof of malice, resulting in special damages.  Id. (citation omitted).  “In order to establish a defendant’s liability for product disparagement, the plaintiff must prove each and every one of the following elements: 1) the falsity of the statement; 2) the publication of the statement; 3) malice; and 4) special damages.  The burden on the plaintiff is ‘onerous.'”  Id. (citations omitted).


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