As a business owner, you need to do everything in your power to ensure continued success from keeping operating costs low and raising capital to making the necessary investments in your workforce and managing government regulations.
In addition to all this, you will naturally need to take steps to remain ahead of your rivals, including generating demand, and improving your product or service. While there's nothing wrong with a little healthy competition, it's important for business owners to nevertheless refrain from conduct that damages a fellow competition lest they find themselves hit with a lawsuit alleging tortious interference with a contract or business expectancy.
Tortious interference is a sort of financial tort that occurs when one business actively interferes with the existing relationships or contracts of another business with the intent of causing economic harm.
Specifically, lawsuits based on this cause of action revolve around accusations that a defendant business induced (i.e., provoked) or forced another business to breach a contract with a third party.
As to how something like this might look, consider the following:
- Business A makes it impossible for Business B to perform/receive the benefits of a contract with Business C by refusing to deliver goods
- Business A forces Business B to violate a contract with Business C due to blackmail or other threats
- Business A forces Business B to breach its contract with Business C by manipulating market prices
In the foregoing examples, a tortious interference lawsuit could theoretically be brought by either Business B or Business C against Business A.
We'll continue this discussion in our next post by examining the elements of a tortious interference claim.
In the meantime, consider speaking with a skilled legal professional who can provide answers and pursue solutions if you have any concerns regarding commercial litigation.