Recovering for Tortious Interference with a Contract
Business and Commercial Disputes By Harvey Binnall PLLC - 2020/03/17 at 12:56pm
Experienced Business Litigation Attorney in Alexandria, VA
If your business has entered into a contract — or was in negotiations — and had that contractual arrangement interfered with by a third-party, then the law may entitle you to significant damages as compensation. In Washington DC, and throughout the United States at-large, tortious interference with a contract is a serious civil offense worth litigating to the fullest extent.
In business, there are numerous costs associated with the “lead up” to a contract, from the sales process (i.e., client meetings and follow-ups, negotiation, intake) to the execution of said contract (i.e., strategic development and implementation). Contract issues may also be felt in the form of lost opportunities — after all, had you known that the contract would fall through, then you could have entered into an agreement with a different party, thus ensuring a steady revenue stream.
So, how does a tortious interference claim work? Let’s take a look at the basics.
What Counts as Tortious Interference, Exactly?
Tortious interference claims rest on a few basic elements. The plaintiff must be able to show that:
- There is a valid and enforceable contract (of which the third-party intervenor was aware);
- The third-party intentionally interfered with said contract; and
- The plaintiff was harmed by such interference.
A prototypical tortious interference claim involves a business deal that is “terminated” after a third-party convinces one of the contracting parties that they can offer a superior deal, such as a lower price on the same supplies.
Lack of intention is an absolute defense.
For example, if the defendant third-party interfered unknowingly (i.e., they were not aware that you were in a contract with the other party), then they cannot be held liable.
Potential Business Opportunities
Tortious interference claims do not necessarily require a pre-existing contract. In some cases, the plaintiff may be able to recover for business opportunities that were reasonably expected to develop (given the circumstances). In order to do so, however, the plaintiff must be able to show that the business relationship was progressing towards a contract — exploratory conversations may not be sufficient.
For example, if you are involved in contract negotiations that take six months in total, and that involve discussions over implementation (with leadership of both companies engaged in such discussions), and the circumstances are such that a contract is expected to be signed but the delay is merely due to stalling on certain details, then a court is likely to consider this opportunity sufficiently likely as to justify a tortuous interference claim — in the event that a third-party did interfere.
It’s worth noting, however, that a tortious interference claim that centers around a “potential” business opportunity requires an additional element: the plaintiff must be able to prove that the third-party interference was through improper means.
Contact Harvey & Binnall, PLLC for Assistance
Harvey & Binnall, PLLC is a boutique litigation firm based in Alexandria, VA, serving businesses throughout the DC metro region. We have decades of experience working with a range of business clients — from early-stage startups to Fortune 500 companies — helping them to secure their rights in challenging situations, including those that center around purported contract interference.
We are committed to representing each client in a manner that is considerate of their unique business needs, goals, and concerns. As such, we engage closely with clients from beginning-to-end to ensure that we have the information and insight necessary to advocate effectively on their behalf.
Ready to speak to a skilled Alexandria business litigation attorney at our firm? Call us at 703-888-1943 or complete an online intake form to schedule a consultation.