What is Tortious Interference with a Business Relationship?

When two parties have a legally binding and valid contract and are performing under that contract, you cannot do anything to induce either party to break the contract. If you do, you can expect to be sued for tortious interference with contract.

To have a tortious interference with contract claim, there must be a contract—that is, the parties that are being “interfered with” must be legally bound by an actual agreement.

No Contract? No Problem

But often it happens that there is no actual contract—just a business relationship between two parties. But that doesn’t mean that anybody can just interfere with that relationship, because just like with an actual contract, interfering with a business relationship can also get you in some serious trouble.

Often, businesses have a continuing relationship with others, including customers or clients—but there is no actual contract. Imagine, for example, a nightclub (Nightclub 1) that hires a very popular DJ to come play. They hire on a “per job” basis, so there is no contract, but the DJ and Nightclub 1 have done business on a number of occasions for many years.

One day, Nightclub 2 convinces the DJ to never work at Nightclub 1 again. Nightclub 1 and the DJ had no contract but did have ongoing business relationships, and Nightclub 1 could potentially sue Nightclub 2 for tortious interference with a business relationship.

What You Have to Prove

Making out a claim for tortious interference with a business relationship is often harder than one for tortious interference with a contract because in the latter, there’s either a contract or there isn’t—that’s usually one aspect of the case that’s cut and dry (although not always).

Whereas, a business relationship can be more nebulous and harder to define. Generally, to make out a viable claim, you must show that the party being sued knew there was an ongoing business relationship and intentionally interfered with that relationship.

Note that there must be an ongoing, consistent history of business relations in order for there to be any tortious interference. So, for example, someone cannot tortiously interfere with a prospective customer with whom you have no ongoing prior relationship.

Additionally, there must be some expectation that the business relationship would have continued had it not otherwise been interfered with.

What is Interference?

The action that constitutes actual interference can also vary. Some courts have said that the interfering action by the potential defendant must be something that rises to criminal acts, although many courts have defined misrepresentations, deceit, lies or fraud to justify interference.

Damages

Damages can also be more difficult to prove.

With a contract, the expectations set in the contract would be the losses suffered by the Plaintiff as a result of the interference.

But in a business relationship claim, the Plaintiff may have to use prior business dealings with the other party to the contract, as a basis for what would have been expected to be future income that would have derived from the business relationship, had it not been interfered with.

Let the West Palm Beach commercial litigation lawyers at Pike & Lustig help protect your business interests today.

Source:

law.cornell.edu/wex/tortious_interference