What is the scope of the tort of appropriation of corporate opportunity?
The tort of appropriation of corporate opportunity is a legal concept designed to protect businesses from unfair competition. It exists to prevent a person or company from taking advantage of an opportunity that should have been presented to a corporation instead. In California, the scope of the tort of appropriation of corporate opportunity is broad and covers any corporate opportunity that a person or company has essentially “stolen” from the corporation. In order for the tort of appropriation of corporate opportunity to be applied, there has to be evidence showing that the person or company: (1) had a fiduciary relationship to the corporation, (2) had an opportunity specifically belonging to the corporation, (3) took advantage of the opportunity for their own personal gain without the consent of the corporation, and (4) the corporation was damaged or deprived of a reasonably probable gain or benefit because of the stolen opportunity. Essentially, these elements put together determine whether the tort of appropriation of corporate opportunity is present. If the evidence demonstrates that all the criteria are met, then the person or company will be held accountable and may have to pay for damages if the corporation is found to have suffered from a financial loss as a result of the stolen opportunity. It is important to understand the scope of the tort of appropriation of corporate opportunity in order to ensure that all of the necessary criteria are met and the right decision is made.
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