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Tortious Interference With a Business Contract

Business and Commercial Disputes By Harvey Binnall PLLC - 2018/08/24 at 09:50am

No matter the jurisdiction, when businesses — sophisticated or not — execute contracts, the potential for tortious interference by a third-party is not often anticipated by those engaged in the present contract.  Tortious interference can have a significant impact on the businesses involved, however, and may give rise to actionable claims for damages, to cover the losses caused by such interference.

Basic Elements of a Tortious Interference Claim

Tortious interference claims essentially involve the intentional disruption of a business contract by a third-party.

For example, suppose that you enter into a contract with another party for the purchase of goods.  Now, before you can complete the delivery of said goods and secure payment (pursuant to the contract), a third-party competitor engages with the purchaser and convinces them that your products are defective, and this causes the purchaser to renege on the contract.  You suffer significant losses as a result of the breach.  Given the circumstances, you would likely have an actionable tortious interference claim against the third-party.

In order for you to put forth a successful tortious interference claim, you will have to show that:

  1. A valid contract existed;
  2. The defendant third-party was aware of the existence of the contract, or reasonably should have known about its existence;
  3. The defendant intentionally and wrongfully interfered with contract performance; and
  4. This interference caused you to suffer losses.

Common Liability Issues

Improper or Wrongful Conduct

It should be noted that mere intent to cause interference/disruption is not sufficient to attach liability, even if actual losses are suffered — you must be able to show that the defendant acted in a manner that would have been considered unlawful or otherwise wrongful.  Third-party competitors are perfectly within their right to attempt to disrupt your business, so long as their conduct is not independently unlawful or wrongful.

For example, returning to the above example (in which you are attempting to deliver goods to a purchaser), if the third-party’s discussions with the purchaser about your products being defective is a lie and therefore constitutes fraud, then you would likely be entitled to significant damages pursuant to a tortious interference claim.

Knowledge

In the tortious interference context, a defendant cannot be held liable for such interference if they do not know (or could not reasonably have known) about the existence of the contract at-issue.

Contract Invalidity

Some contracts are invalid and unenforceable.  When a contract is invalid, a claim for tortious interference will not lie.  You must be able to show that the contract was valid and enforceable, and that the defendant’s conduct interfered with its normal performance, thus causing you damages.

Lack of Intention

Defendants cannot be held liable for tortious interference if they did not intend to interfere with contract performance.  Accidents and mistakes will simply not give rise to tortious interference liability.  For example, if the defendant’s delivery drivers get into an unexpected accident on a private road, causing it to shut down and create delays for your own deliveries, then your contracts might be canceled due to untimely delivery — given that the interference was unintentional, however, the defendant would very likely evade liability.

Contact an Experienced Alexandria Commercial Litigation Lawyer for Assistance

If you are involved in a dispute relating to a third-party’s tortious interference with your business contract, then you may have a right of action for damages.  In many cases, the disruption of a contract cannot be anticipated, and as such, may leave a business vulnerable to significant additional losses (as they scramble to secure a replacement contract and avoid further damages).  Given the high-stakes nature of an induced breach of contract, it’s critical that you contact a qualified team of attorneys with the specialized experience necessary to effectively litigate your claims.

Harvey & Binnall, PLLC is a boutique litigation firm with decades of experience representing businesses in all manner of contract disputes, including those that involve tortious interference of a contract by a third-party.  From a strategic perspective, our attorneys are committed to obtaining every possible advantage.  We work tirelessly to develop a comprehensive argument, and are willing and able to take a case to trial — this approach gives us a competitive edge when it comes to early negotiations, helping us to secure maximum compensation on your behalf.

Call (703) 888-1943 or submit an online claim form to speak to an experienced Alexandria commercial litigation lawyer at Harvey & Binnall, PLLC today.