Injurious falsehood means stating untrue and false statements about a plaintiff which might result in property or business damage or economic harm. Injurious falsehood is committed in business competition to cause harm to their rival parties.
This law note tells you what is injurious falsehood, its essentials, remedies, defences, and how it differs from defamation.
Essentials of Injurious Falsehood
The crucial ingredients required to fulfil the condition of injurious falsehood are:
1. Direct Relation
There should be direct relation of a statement made by the defendant to the plaintiff’s property or business.
To restore the plaintiff’s right, it is imperative to acknowledge the statement as to the direct relation to the plaintiff’s property. If the statement did not refer to the plaintiff’s business, the plaintiff cannot claim the injury. On the other, if the statement referred to the plaintiff’s business, then the maker of the statement cannot rebut.
2. Publication of Statement
There should be a publication of the disparaging statement to the third party.
A disparaging statement made by the defendant should involve a third party. For a statement to amount to disparaging, it must be known by the third party and not mere the plaintiff. Here, the publication does not mean that the statement must be printed, but a statement spoken orally or written would also be construed as published if it involves a third party.
3. Ill Will
The statement made by the defendant must be of ill will.
An important ingredient of injurious falsehood is establishing that the defendant had stated against the plaintiff with ill will. The publisher already knew his statement had the potential to cause damage to the plaintiff’s business and incur a monetary loss.
4. Cause Special Damage
The false statement made by the defendant must cause special damages to the plaintiff.
The publication made by the defendant must cause special damage. Therefore, for the recovery of the damage, special damage must be proved. Here, in the legal context, special damages mean monetary loss or loss of business opportunities.
Injurious falsehood incorporates slander of title and goods with available remedies of the same.
Slander of Title and Goods
When a disparaging and false statement is made about the plaintiff’s either movable or immovable property that the plaintiff no longer deals in the same business and causes damages to the plaintiff is known as slander of title. Ratcliffe vs Evans (1892)
If the same disparaging statement is made regarding the quality of the goods of the plaintiff causing special damage is slander of goods.
Remedies Available in Slander of Title
Primarily, the plaintiff will seek injunctive relief from the court to prevent any further damages made by the disparaging statement. The plaintiff has the burden of proof to establish the statement as disparaging and false. In an instance, if the defendant makes an untrue statement unknowingly but no special damage is caused to the plaintiff, then the claim for the recovery gets rebut.
Defences to Slander of Title
As a defence line, conditional and absolute privilege is used by the defendant. Conditional privilege is when the defendant knows the statement made stands untrue about the plaintiff’s property. In contrast, absolute privilege exists when the defendant makes the statement during the judicial proceedings.
If any privileges qualify, the plaintiff will lose the case even if all the elements justify the claim.
If an act is authorised by the statutory authorities, then the defendant will not be held liable for his actions.
Remedies Available in Slander of Goods
Under section 36A(1)(x) of the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, any person involved in stating false or misleading facts undervaluing the products, service, or trade of another person would be considered as engaged in unfair trade practice.
Section 2(47) of the Consumer Protection Act, 2019 states that any unfair trade practice to promote the sale, use, or supply of the goods adopts any unfair practice would be held liable.
Defences to Slander of Goods
Mere boasting, comparing, and making statements in favour of own product against others do not hold the defendant liable for injurious falsehood. This privilege is conditional and exists only in injurious falsehood. Business competitors use this in advertising their products.
To advertise the product, it is allowed to show one’s product as the best product among all. But, it is not acceptable to devalue the rival’s product with an untrue and derogatory statement to gain undue profit. Such a case would be held liable for injurious falsehood and can not be considered mere “puffery”. De Beers Abrasive Products Ltd. vs International General Electric Co. of New York Ltd. (1975)
Difference Between Injurious Falsehood and Defamation
Injurious falsehood and defamation are presumed similar to each other as in both, the derogatory accusations are made against the plaintiff published in front of the third party. Nonetheless, they differ from each other in the following aspects.
Here are the major differences between injurious falsehood and defamation:
- Defamation is about the person’s reputation, and injurious falsehood is about the person’s property, goods, and businesses. Hence, defamation fails if the statement does not tarnish the person’s reputation, but injurious falsehood will lie even if it does not cause any harm to the person’s image.
- Proof of special damage is not always required in defamation, but in injurious falsehood, the court requires evidence to decide the matter.
- If the defendant takes the qualified privilege in defamation and the plaintiff denies them, then in that scenario, only the plaintiff is responsible for proving the ill will and malice of the defendant in order to hold him liable. Whereas, in injurious falsehood, ill will and malice are relevant points to be taken into consideration and must be proved by the plaintiff in all the scenarios.
- If the statement made by the defendant is true, then it can be taken as a defence on the defendant’s part in the defamation. Whereas, in injurious falsehood, the burden lies on the plaintiff to prove the statement as untrue and disparaging.
- Defamation sometimes may be actionable per se, whereas injurious falsehood would not be.
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