Legal Definitions - trade slander

Trade slander, also known as commercial disparagement or product disparagement, refers to a false, spoken statement made about another person's business, products, or services that causes them financial harm. Unlike general slander, which targets an individual's personal reputation, trade slander specifically aims to damage the commercial reputation or marketability of a business's offerings. To prove trade slander, it is typically necessary to show that the statement was untrue, made with malicious intent or reckless disregard for the truth, and directly led to measurable financial losses for the business.

Here are some examples:

• Imagine two competing coffee shops in a small town. The owner of "Morning Brew" starts telling customers and local suppliers that the coffee beans used by "Daily Grind" are of extremely poor quality and are sourced unethically, even though "Daily Grind" uses premium, fair-trade beans. As a result, "Daily Grind" experiences a noticeable drop in daily sales and loses a catering contract with a local office.

  This illustrates trade slander because the owner of "Morning Brew" made false, spoken statements about "Daily Grind's" product (coffee beans) and business practices, which directly harmed "Daily Grind's" commercial reputation and led to measurable financial losses (decreased sales and lost contract).

• A former employee of a home renovation company, feeling resentful after being fired, attends a local home show and tells several attendees that the company's roofing services are shoddy and that they routinely use substandard materials, despite knowing the company adheres to high-quality standards. Following these statements, the company receives several calls from concerned potential clients who decide not to proceed with their renovation projects.

  This is an example of trade slander because the former employee made false, spoken claims about the company's services (roofing) that damaged its professional reputation and resulted in financial harm through lost business opportunities.

• During a live online review session, a prominent tech influencer falsely claims that a newly released brand of smartwatches has a critical software bug that causes personal data to be leaked, even though no such bug exists. This statement quickly spreads, leading to a significant number of pre-order cancellations and a sharp decline in initial sales for the smartwatch manufacturer.

  This demonstrates trade slander because the influencer made a false, spoken statement (in a live video, which is treated similarly to spoken word in this context) about a product (smartwatch) that negatively impacted its marketability and directly caused financial damage (lost pre-orders and sales) for the manufacturer.