Briggs Law Group is a boutique Phoenix law firm that specializes in corporate legal
counsel services, business transactions, representation before government agencies,
and campaign finance and election law advice.
We encounter intent just about every day of our lives: “I intended to close the car windows, but I forgot and it rained and soaked the car interior. Now I’ll have to pay for cleaning and detailing.” That’s a pretty clear – and acknowledged – admission of intent.
Of course, intent isn’t always so clear cut. Maybe you and your spouse discussed the possibility of rain and the fact that the car windows were open, and though your spouse believed you had made a commitment to close the windows, you feel you made no such implication. Who should pay for the cleaning and detailing in that case?
In the legal world, issues of intent typically have more serious consequences than a car detailing bill. Typically, when you hear about intent in business, you’re hearing about either breach of intention to be legally bound or malicious intent – primarily because those two types of intent-related issues can have a significant impact on your business’ ability to operate profitably. Here’s a quick review of both types:
A contract is a legally bound agreement. What if the contract hasn’t been written, and one party believes agreements have been made and takes actions based on those agreements? That’s when “intention to be legally bound” comes into play, and it occurs like this:
Mr. A produces a thingamajig using a widget similar to what your company produces. He sells 10,000 units per month. You and Mr. A decide – without having a written contract – that you will become his supplier of widgets. Based your handshake and before a contract has been signed, you ramp up production of widgets to accommodate his needs. In the meantime, Mr. A decides to remain with his current widget supplier. You’re left with a whole lot of widgets as well as the added costs of producing those widgets, not to mention the loss of profits you would have realized from sales of widgets to Mr. A.
If you can prove Mr. A had the legal intent to do business with you, you might be able to recoup those costs as well as unrealized profits.
Another type of intent that comes up in business litigation is malicious intent. In a nutshell, malicious intent occurs when a person or entity does something with the intention of causing some type of injury, such as damage to a reputation, financial loss or physical injury. In business, malicious intent commonly refers to public or published statements that were issued with the intent to damage a business’ reputation to the extent that it interferes negatively with that business – for example, causing a loss of potential earnings.
If it turns out our thingamajig maker, Mr. A, deliberately reneged on your verbal contract in order to cause you financial losses, that’s malicious intent, and he’s in trouble.
Of course, most cases of malicious intent are not nearly as obvious as the examples presented here; they’re much more complicated, and the stakes can be very high. In most cases, proving intent is very difficult, which is why keeping a paper trail (including emails, text messages and instant message chats), is very important. Those are pieces of evidence that will help your case.
As soon as you suspect that someone has broken a contract or harmed you or your business maliciously, call your attorney. Don’t communicate with the other party until you’ve consulted your attorney. Just like you are trying to build your case, the other party is doing the same to defend himself or herself; everything you say becomes evidence.