Minding Your “Ps” And “Qs”:
What Can You Legally Say About Your Competitors?

In self-storage, as with other businesses, we must be careful not to slander or to disparage our competitors to avoid being charged with “defamation.” By common law, defamation is either

(a) a communication that harms the reputation of another by lowering him or her in the community of opinion, or

(b) a communication that deters others from associating with or becoming otherwise involved with the person. Both “libel” and “slander” fit within the legal definition of defamation. Libel involves written communication; slander involves oral communication.

“Business disparagement” also falls under the legal tort of “injurious falsehood.” As defined in Black’s Law Dictionary, disparagement is: “A false and injurious statement that discredits or detracts from the reputation of another’s property, product, or business.” Thus, in order for a plaintiff to successfully sue, the statements must first of all be false, and second, must cause the other party harm.

To make a case for business disparagement, the plaintiff must prove that the statement caused a third party (such as a customer) to take some action that resulted in a specific financial loss to the plaintiff. In other words, a self storage business would have to prove that they have, indeed, suffered a loss of income because of something written or spoken by a competitor.

The best practice is to never say anything disparaging about a competitor, whether true or false. But what about the things you say about your own facility—for example, advertising that touts your business as “The Best Self-Storage Facility in the Santa Ynez Valley”? The law does recognize the concept of “puffing.” Puffing is an opinion or judgment that is not made as a representation of fact. It refers to an expression or exaggeration made by a salesperson or found in an advertisement that concerns the quality of what a company is offering for sale. Because these statements present opinions rather than facts, they are usually not considered a legally binding promise.

A potential problem area for self storage, however, is “unfair competition.” This is a question of whether the storage facility is misrepresenting his or another’s goods or services, leading to confusion on the part of potential customers. This occasionally happens when self-storage facilities advertise in print that they possess a characteristic they really don’t have, or they make a statement that is no longer true. This type of advertising is prohibited under the Uniform Deceptive Trade Practices Act.

For example, if your ad says you have “the only climate-controlled storage in the Santa Ynez Valley,” and another self storage facility is then built that also has climate control, you must remove the wording from your ad. Another potential problem is when facilities advertise “24-hour, on-site resident managers.” The reality is that resident managers occasionally leave the property; hence, this could be construed as false and misleading advertising.

The lessons here are that, as far as your competitors are concerned, it’s best to avoid making any negative statements. And when advertising specific characteristics of your own facility, be sure the claims you make are the literal truth.

This column contains legal information that is generalized to illustrate legal principles and laws, but should not be substituted for the advice of your own attorney.