What is tortious interference? It occurs when a third party intentionally disrupts a business relationship or contract, causing economic harm.
It is a crucial legal concept for business owners to understand, as it can significantly impact their operations and financial health. Recognizing and understanding tortious interference empowers you to safeguard your business interests.
Types of tortious interference
There are two primary forms of tortious interference in a business setting – interference with existing contractual relationships and interference with prospective business relationships that could offer economic advantages. The former involves a third party disrupting an existing contract, while the latter pertains to interference with potential business opportunities.
Here is a breakdown of each type:
- Existing contractual relationships: When a third party interferes with an existing contract, the harmed party must prove several elements to establish a claim. These include the existence of a valid contract, the third party’s knowledge of it, intentional and wrongful interference and resulting harm to the business relationship. Examples include convincing a supplier to break a contract or disrupting a property sale.
- Prospective business opportunities: This type of interference involves disrupting informal business relationships that could otherwise lead to formal arrangements and potential financial benefits. To prove such a claim, you must show a business relationship existed, the third party knew of it and their wrongful actions caused harm.
An example of such interference might be manipulating or disrupting ongoing contract negotiations.
Understanding and addressing tortious interference is vital for maintaining healthy business operations. If you suspect your business is a victim of such interference, seek a legal opinion to determine your next steps. Possible remedies include compensatory damages, punitive damages and injunctive relief.
