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Don’t let a tortious interference claim derail your business – II

| Apr 11, 2017 | Business & Commercial Litigation |

Last time, we discussed how even though business owners of all sizes need to do everything in their power to remain ahead of their rivals, they must ensure that their actions remain strictly above board. Indeed, we discussed how the failure to do so could result in a lawsuit alleging tortious interference.

To recap, tortious interference occurs when one business interferes with the existing relationships or contracts of another business with the intent of causing economic harm. We’ll continue this discussion in today’s post, taking a closer look at the elements of a lawsuit alleging this financial tort. 

At its core, a tortious interference claim must demonstrate the following:

  1. The existence of a valid contract between the plaintiff and a third party
  2. The defendant’s knowledge of the contract
  3. The defendant’s intent to interfere with the contract
  4. The defendant’s actual and improper interference with the contract
  5. The plaintiff was damaged by the defendant’s conduct

The existence of a valid contract or economic expectancy

The foundation of any tortious interference claim is essentially that the defendant obstructed or otherwise sabotaged a contract between the plaintiff and a third party.

It stands to reason then if there is no valid contract — whether because of improper execution or violations of public policy — the defendant couldn’t have induced or forced a breach of contract. In other words, there can be no liability if there is no valid contract.

It’s important to note that it makes little difference in the eyes of the law as to whether the underlying contract is terminable at will — meaning the plaintiff has the option of ending it on their own terms. So long as it can be shown that the defendant knowingly induced the plaintiff to exercise this option and the inducement was improper, a claim for tortious interference can be brought.

We’ll continue this discussion of the elements of a tortious interference claim in a future post.

If you have any concerns regarding commercial litigation, consider speaking with an experienced legal professional able to protect your rights and your best interests.