Defamation law in the US

When any person says anything about any other person or business, in a commercial context, which could reasonably be interpreted to be defamatory, the person being referred to may want to consider a cause of action for defamation. If the statements were made in the course of business dealings or trade, you may want to consider seeking lost profits and other consequential damages.

A communication is defamatory if it so harms the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him. Generally speaking, if the statement is about the person’s trade or business it could be slander per se, if it is communicated verbally, and it could be libel per se, if it is communicated in written form.

Americans are very adapt about their fundamental rights and the right to free speech is one of them. There are significant concerns that if the law is made overly aggressive in allowing people to sue for any communication, the results could have a chilling effect on free speech. People would be afraid of being sued, in regard to whatever they say. This is not a very desirable outcome in society where dissemination of information is of utmost importance to a society.

The court balanced these competing interests. The court found that the right to free speech in the US, required that any ‘public figure’ seeking to sue for defamation would have to show common law malice. Common law malice is defined as knowledge of falsity or reckless disregard for the truth. This would first have to be pleaded at the pleading stage, and proven by evidence at the trial stage.

In the famous case of New York Times v. Sullivan, an advertisement was placed in a famous newspaper ( which included several references to the ‘Montgomery police force’. L. V. Sullivan a police officer of the Montgomery police department took issue at this advertisement, and decided to sue. The court found that, when a public official seeks to sue for defamation, he must show something more than mere falsity. He would be required to show actual malice, ie. knowledge of falsity, or reckless disregard of the truth.

In many cases, people in commercial business relationships attempt to spread false communications about the financial health of a company they have had dealings with. You may be entitled to lost profits, punitive damages and actual damages if your company has been victimized as such.

I specialize in representing plaintiffs in India, against Defendants in the United States. I am an american attorney, dual qualified to practice law in India and in the US

Sale of Goods, and the UCC

In the United States, contract law is almost exclusively the domain of the States, ie. each individual state has its own contract law jurisprudence, and there would certainly be state specific contract law rules.

The United States has a fairly consistent and standardized commercial code for the sale of goods. All the states, except Louisiana have adopted the Uniform Commercial Code (the “UCC”) and this gives a generally predictable framework for contract formation and enforcement to traders and persons dealing in goods, with US counterparties.

Article 2 §102 of the UCC, defines the scope of the applicability of the UCC. It governs all transactions where the subject matter is “goods”. The jurisprudence on contracts for the provision of services and sale of goods generally comes down to the “predominant purpose” test. The courts would look at the facts and circumstances to determine what the predominant purpose of the contract was. If the court found that the predominant purpose of the contract was the provision of services, the court would not apply the UCC, on the other hand if the court was to find that the predominant purpose was the supply of the goods, and the services were merely incidental, the court would apply the UCC. This is a sort of intuitive test, although in law it could get very detailed and could result in tediously long briefs by lawyers, it could very simply be explained thus; if you buy a ton of nails for $1000 and the contract provides for delivery to your doorstep – this contract would probably be one under the UCC, because you intended to buy the nails, and the delivery was merely incidental. But on the other hand, if you employed a carpenter to fix your door, and he used a couple of nails – that contract would be governed by the State specific contract law (and not the UCC) because the intention was to engage the services of the carpenter to fix the door, and the nails used by the carpenter were merely incidental to that purpose.

The advantages of using the UCC are many, it provides an advanced and sophisticated mechanism to enforce contracts and a fairly consistent set of cases across State lines for the parties to be able to judge the merits of their claims.

If you have a contract for the provision of services or one governed by the UCC, and are contemplating a dispute with your counterparty, this article is a very rudimentary outline on the UCC, and you should not rely on it for making a legal decision. For a detailed consultation and for advise on your specific situation, do get in touch with me.