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Defamation is when an individual makes a statement about another that could be considered harmful to their reputation. For instance, you would not want to go around saying "My neighbor, Mr. XYZ, let his vicious dogs out on purpose to hurt me!" if it is not true. This can be damaging to Mr. XYZ's reputation, and as it is not based on truth (because, for instance, the dogs got out on their own), you are committing defamation. Mr. XYZ could then sue you for defaming his character. Personal injury lawsuits can get especially heated, so it is always a good idea to choose your words with care.