Interfering with Business Practices – Tortious Interference

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Tortious interference, also known as intentional interference with contractual relations, happens when someone intentionally sabotages another party’s contractual or business relationships.  In courts tortious interference suits are divided into contractual issues and business relationship issues.  While both types of suits are handled differently, they do have many similarities.

Contractual interference occurs when the interfering party convinces a party to breach a contract or disrupts the ability of a party to perform their obligations under the contract.  In typical cases the interfering party convinces a party to break off a contract even though the interfering party has no privilege to act and knows the contract exists.  This is called tortious inducement of breach of contract. The actions of the interfering party must be intentional or there is no legal recourse.

Business relationship interference occurs when the interfering party acts to prevent another party from establishing or maintaining a business relationship.  The potential relationship must have been likely to occur, a potential plaintiff can cannot sue over a missed relationship the plaintiff cannot prove would have been likely.  It is called tortious interference with prospective business relations.  Usually this occurs when the interfering party makes false claims or accusations about an individual’s or business’s reputation.  Like tortious breach of contract, the conduct of the interfering party must be intentional.  If he interfering party acted out of negligence there is no avenue of legal recourse.

The specific elements required to prove tortious interference vary between different jurisdictions.  There are a several factors which generally have to be proven for all cases.  A plaintiff must prove a contractual or business relationship existed and the interfering party knew about it. The plaintiff must also prove the interfering party had an intent to breach the relationship without the privilege to do so.  Finally it must be proven the relationship was breached and there was damage suffered by the plaintiff.

If a case for tortious interference can be proven damages will include economic losses that can be proven with certainty and compensation for mental distress.  A plaintiff can receive punitive damages if it can be proven the interfering party acted with malice.  Sometimes injunctive relief can be received as well. A good example is if a musician breaks a contract to perform at another venue, the venue will be barred from receiving any benefits of the performance like revenue from a live recording.

If you wish to initiate a lawsuit for tortious interference or need to defend yourself against one, you can contact Stone Law at 732-444-6303 or leave us a message on our website.