The free market can certainly be ruthless for small businesses. The competition, however fierce, has to be fair, though, and businesses who have recognized commercial relationships with other businesses deserve to operate within the scope of those relationships without a third party meddling in their affairs. Claims for breach of contract are fairly straightforward, but what happens when a contract is breached due to the actions of a third party? Such claims are referred to as “tortious interference” claims, which this blog will explore.
What is an Example of Tortious Interference?
Almost always, the offending party in a tortious interference claim is a competitor of one of the parties in a business relationship or contract. Let’s say a supplier is agreeing to sell 50,000 widgets to a warehouse retailer for 70 cents per widget. A competitor of the supplier finds out about this deal and talks to representatives of the warehouse retailer, letting them know that 70 cents is a ripoff; 45 cents per widget, the competitor claims, is more appropriate. The retailer reneges on the agreement, claiming that the contract is unfair. The original supplier, which has a written contract with the retailer, goes after its competitor for tortious interference.
Another way that tortious interference claims are commonly brought up is if one business or business owner begins lying about its competitor. For instance, a restaurant owner stating that a rival eatery is in the health department’s crosshairs (when that isn’t true) could constitute tortious interference.
Tortious Interference of Business Relationships vs. Contractual Relationships
The two main types of tortious interference claims come when advantageous business relationships and contractual relationships are breached. The latter is generally easier to prove in court, due to the presence of a written contract. Tortious interference of advantageous business relationships usually involve proof of past business dealings (or even prior contracts).
Both types have similar requirements that need to be met in order to be successful in court:
- A valid contract or business relationship existed between the two parties (plaintiff and the other party)
- The alleged tortfeasor (defendant) was aware of the contract or business relationship
- The defendant deliberately induced one party to end the business relationship or knowingly engaged in acts that caused a disruption or breach of contract
- No legal justification existed for the defendant’s actions
- Damages (for the plaintiff) resulted directly from the actions of the defendant
Our firm respects the rules of fair competition, and we also want to see our clients achieve success or resolve whatever dispute they are embroiled in. We have several skilled attorneys who have extensive experience representing businesses and business owners in a variety of legal matters. We would be honored to help your business; call us today at 305-431-5678 to discuss the best route forward.