Economic torts in Singapore

Economic torts in Singapore

The law of economic torts in Singapore has its origins in English common law. Today, there is some departure from the English position and a significant body of local case law and legislation, although many of the guiding principles remain the same. There have also been important legislative developments in the local context. For instance, the extent to which the law on economic torts regulates market competition must now be understood in the light of the regulatory framework set out in the Competition Act.

 

There are a variety of different economic torts. These include:

 

  1. Inducing breach of contract;
  2. Conspiracy;
  3. Unlawful interference with trade;
  4. Malicious falsehood.

 

Inducing breach of contract

 

If a party (A) knows that another party (B) owes a contractual obligation to a third party (C) and procures or induces B to breach said contract, A may be liable to C for inducing the breach of B’s contractual obligations to C.

 

The breach of contract must have come about as a result of A’s inducement. This requirement may be satisfied if A persuades B to break the contract with C.

 

In exceptional circumstances however, such an inducement of breach may be justified. For example, where such interference is necessary for the protection of public morals or is the inevitable consequence of asserting a pre-existing legal right, inducing a breach of contract in such circumstances may be defensible. Such a defence is generally narrow however and the courts will undertake careful examination of the factual matrix.

 

Conspiracy

 

If two or more people agree on a course of conduct to harm the interests of another, they may commit the tort of conspiracy (or even a crime if the agreed act is illegal).

 

The tort of conspiracy covers a conspiracy to injure and a conspiracy using unlawful means. In a conspiracy to injure, the conspirators’ intention to harm the victim is necessary to establish this tort. The victim of the conspiracy also has to show some pecuniary loss suffered. Such loss may be inferred from the surrounding circumstances.

 

In a conspiracy using unlawful means, an agreement between two or more persons to commit a tort would amount to conspiracy by unlawful means. Such a tort might include another economic tort such as inducing the breach of contract. Thus, an agreement between two or more persons to induce another to breach his contract might cause those involved in the agreement to be liable for the tort of conspiracy by unlawful means. In this form of conspiracy, while proof of the conspirator’s intention to harm the victim is still necessary, it need not be the predominant motive.

 

 Unlawful interference with trade

 

A party (A) commits this tort against another (B) if he commits an unlawful act affecting a third party (C) with the intention to injure B’s interests and B’s interests are in fact adversely affected. The mental element of this tort is narrow in the sense that A had to actually intend for B to suffer loss. The fact that such loss would be an inevitable consequence of A’s actions is not sufficient to form this tort.

 

Malicious falsehood

 

If a person maliciously makes statements that are false, in order to injure another person’s economic reputation or goodwill, the former may be liable for the tort of malicious falsehood. The offending statements or representations may be verbal, written or implied through conduct. Malice may be proven by showing that the person making the representations was aware of the untruth of the statements or reckless as to the truth of it.

 

The above constitutes general information only. You should seek legal advice from experienced lawyers for your specific situation.

 

At Chia Wong LLP, we provide these services: Family and Matrimonial Law (Request a consultation with our divorce lawyers) | Litigation and Arbitration | Criminal Law | Corporate Legal Advisory