What is the scope of the tort of appropriation of corporate opportunity?
The tort of appropriation of corporate opportunity is a type of unfair competition law in South Dakota. This tort is used to prevent a person in a position of trust from taking advantage of a business opportunity that rightfully belongs to the company they are employed by or a business they owe a fiduciary duty to. This tort applies when the person discovers a business opportunity through their employment, relationship, or fiduciary trust and then uses that information to benefit themselves at the expense of the company or business. It is often used when the person takes an opportunity that would otherwise be beneficial to the company or business and uses it to make money for themselves without the company’s consent. The scope of this tort is quite broad and includes any agreement that is considered to be a corporate opportunity. The tort also applies when a person in a position of trust fails to inform the company about a business opportunity of which they know. It also applies when a person in a position of trust interferes in negotiations or dealings between the company and a third party. Another aspect of this tort is the “good faith and fair dealing” principle, which states that a person in a position of trust must act in good faith and avoid taking opportunities that should rightfully belong to the company. In short, the tort of appropriation of corporate opportunity is an important concept in unfair competition law in South Dakota and it is vital for those in a position of trust to understand its scope.
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