What Is Tortious Interference With Contract?
Business can be cutthroat. A lot of times, being successful means stealing clients or customers from the competition. It may seem counterintuitive then, to find out that you can be sued for stealing customers—after all, that’s the free-market, American way, isn’t it? Isn’t competition and the right of consumers to contract with whoever they want to contract with part of our economy?
Not always. When it comes to tortious interference with contract, there can be serious legal consequences.
What is Tortious Interference With Contract?
The law says that when two parties are in a contract, intentionally interfering with that contract, or the contractual obligations of the parties, is illegal, and can get the party that interferes sued.
And, although it’s called tortious interference with contract, there doesn’t even need to be any formal, written contract. Simply interfering with an advantageous business relationship between parties can get you in trouble.
What Has to be Proven?
To prove tortious interference with contract, the party suing must show:
- That there is a business relationship, which can be a formal contract or agreement, but can just be some advantageous relationship between parties
- That the Defendant—the party that interfered—knew of the relationship
- That the Defendant disrupted the relationship
- That the party suing incurred damages that were caused by the interference
Examples of Tortious Interference
Actions that cause someone to break a contract, withdraw promises, or withdraw from the entire business relationship, can lead to liability.
Tortious interference often happens when parties have non compete agreements. When Employee A signs a noncompete agreement with Company A, and Company B convinces Employee A to break the noncompete and come work for it, there is potentially a tortious interference with contract claim.
Likewise, if an air conditioner mechanic were to have a longstanding relationship with Store A, but your business convinces the mechanic to leave Store A and come work exclusively for you, there could be liability.
If your competition business uses a supplier, and you said something bad about the other business (which could, but doesn’t necessarily have to rise to the level of legal defamation), you could be tortiously interfering with the contract between the supplier and that business.
The damages caused by the other party must be caused by the interference. This is a common defense. Many companies that are sued will defend by saying that the other party to the contract was leaving anyway, or that the other party leaving the contract didn’t actually cause any monetary damage.
Alternatively, claims are commonly defended by saying that the tortious interference was not tortious at all—it was just good old fashioned legal competition-that is, the “interfering party” was just doing something it had a legal right to do or say.
If successful, someone aggrieved by a tortious interference can claim lost profits, past and future, as well as any harm to company reputation.
Call the West Palm Beach business litigation lawyers at Pike & Lustig for help today if you have any kind of business law case.