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What business owners should know about tortious interference -- II

Last time, our blog began discussing how overzealous business owners who engage in conduct that proves damaging to fellow competitors may find themselves on the wrong end of a lawsuit alleging tortious interference with a contract.

Specifically, we discussed how these tortious interference lawsuits are generally brought by 1) other businesses who allege that a defendant business owner either forced or induced a breach of a contract with a third party, or 2) third parties who claim to have lost the benefits of a contract due to alleged interference on the part of a defendant business owner.

Any examination of tortious inference must, of course, be accompanied by a closer look at the elements a plaintiff must prove in order to prevail in court.

In general, these elements include the following:

  1. The existence of a contract between the plaintiff and another party
  2. The defendant knew about the existence of this contract
  3. The defendant intended to interfere with this contract
  4. Actual interference occurred and it could be classified as improper
  5. The plaintiff sustained damages

The existence of a valid contract

It's important to understand that there can be no lawsuit for tortious interference with a contract if there is, in fact, no contract. In other words, if the underlying contract violated public policy or was somehow executed improperly, a defendant couldn’t technically be held liable for its breach given that it never really existed in the eyes of the law.

It should be noted that whether the underlying contract is terminable at will, meaning the plaintiff could have terminated it whenever they choose, has little bearing on this inquiry. Indeed, all that really matters is if the defendant knew about the contract at will and knowingly engaged in conduct that forced the plaintiff to exercise their option to terminate it.

We'll examine this complex topic in future posts, continuing to explore the elements of a tortious interference lawsuit. In the meantime, if you have questions or concerns regarding any business tort, consider meeting with an experienced legal professional as soon as possible. 

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