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What business owners should know about tortious interference -- III

Over the last month, we've been examining how those business owners whose conduct crosses the line between friendly competition and borderline sabotage may be hit with a legal action alleging tortious interference with a contract.

Specifically, we explored the first of five elements -- existence of a valid contract -- that must be proven in order to hold someone accountable for this business tort. In today's post, we'll take a closer look at the next two elements: the defendant's knowledge and intent. 

Defendant's knowledge of the contract

In addition to proving that a valid contract actually existed, a plaintiff must also be able to demonstrate that the defendant actually knew about the existence of the contract in question. This makes sense when you stop to consider that a tortious interference claim is indeed alleging intentional interference on the part of the defendant.

The determination as to whether the defendant had knowledge of the contract is a factual inquiry, meaning it can be demonstrated through unequivocal writings or statements, or inferred from the underlying circumstances.  

It's important to understand that a mistake on the part of a business owner as to the validity of the contract has no bearing on this determination. In other words, it doesn't matter if the defendant knew about the contract yet believed it was somehow invalid by virtue of violating public policy or improper execution. All that matters is they knew it existed.

Defendant's intent to interfere with the contract

In order to be found liable for tortious interference, it must be proven that the defendant acted intentionally. This could mean either of the following:

  • The defendant may have undertaken their actions for another purpose, but did so knowing that interference with the contract in question would occur or was substantially likely to occur.
  • The defendant undertook their actions for the sole purpose of interfering with the contract in question

We'll continue examining the elements of a tortious interference lawsuit in future posts. Consider speaking with an experienced legal professional if you have been served with a lawsuit relating to a business tort or would like to learn more about your options for bringing such a lawsuit. 

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