Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What does the term 'trade defamation' encompass?

1. Only verbal communication

2. Only written communication

3. Both written and spoken harmful communications

4. Random opinions about a competitor

The correct answer is: Both written and spoken harmful communications

Trade defamation refers to the act of making false statements about a business or its products, which can harm its reputation and business interests. This term encompasses both types of communication: written and spoken. When someone falsely communicates harmful information about a competitor in a way that can damage that competitor's reputation, whether through spoken words (slander) or written statements (libel), it falls under the umbrella of trade defamation. Hence, the correct answer captures the full scope of what trade defamation includes, recognizing that both forms of communication can have severe consequences for businesses. Other options are too restrictive. Limiting trade defamation to only verbal communication ignores the significant impact of written statements, while excluding random opinions about a competitor fails to recognize that not all opinions are relevant to trade defamation unless they are false and harmful.