What Is Tortious Interference With a Contract?

Suppose you have a contract with a business partner that says that this particular partner will serve as your sole supplier for a specific item. But a third party comes along and offers your partner a better deal, tempting them to break the contractual relationship. Now you wonder, “What is tortious interference with contract, and do I have a claim?”

Below, learn everything you need to know about tortious interference, then call our small business lawyers in Phoenix, AZ, for assistance.

Types of Tortious Interference Claims for Contracts

What exactly is tortious interference, anyway? In short, it refers to when a third party (or parties) interferes with either an existing contract or prospective business relations for economic advantage. Here, we discuss the elements of each type of tortious interference to help you determine if a third party committed a wrongful act.

Tortious Interference With Contract

Imagine that you own a store that sells computers. You have an existing contractual relationship with Company A, which has agreed to supply your business with computers at $800 each. Company B has knowledge of this contract and goes behind your back to cut a deal with Company A to purchase computers at $600 each. Company A agrees to the deal and breaches the contract.

In this scenario, Company B has tortiously interfered with your contract through wrongful means. Such a claim requires proof of the defendant’s actions and intent to interfere, which includes:

• A contract exists between the plaintiff and another business.
• It meets the requirements for a valid contract.
• A third party knew about the contractual relations between the plaintiff and the contracting party (or other parties).
• The defendant knowingly induced a breach of contract and meant to cause harm to the plaintiff.
• Due to the defendant’s wrongful conduct, the plaintiff’s business suffered damages.

If you suspect alleged interference with a contract, contact an attorney with experience with tort law and contract rights.

Tortious Interference With a Business Relationship

Now you know the answer to the question, “What is tortious interference with contract?” However, what if a third party didn’t interfere with an existing contract but rather your business relationships? This is called tortious interference with a business relationship or tortious interference with prospective economic advantage.

In plain English, this means that the defendant behaved in such a way as to disrupt your business relationships for economic benefits. For example, suppose you plan to sign a deal with a new partner in good faith, and the expected profits look promising. Due to the defendant’s interest in this partner, they decide to spread nasty rumors about your business, and their interference causes the relationship to sour.

To prove liability for tortious interference with prospective economic advantage, the plaintiff will need to present evidence that shows the defendant’s knowledge of the relationship and intent to interfere, including:

• The plaintiff either had a relationship or intended to establish one with a third party.
• The expected transaction or relationship was likely to financially benefit the plaintiff.
• The defendant knew about the existence of the relationship and the plaintiff’s interests in it.
• The defendant interfered with the relationship, and their behavior was improper.
• The third party used the defendant’s actions as justification to terminate the relationship.
• The plaintiff suffered damages as a result of the plaintiff’s interference.

If you need help understanding how to prove that a third party interfered with your business relationship, call a common law tort attorney today.

What Is Tortious Interference With Contract? Intentional Interference Explained

In tort law, to successfully win tortious interference claims, an attorney must be able to prove that the defendant behaved intentionally to interfere and harm the relationship between your business and a third party. This is easier said than done.

For instance, the defendant might try to say that they were unaware of the relationship between your business and the other party. Or they might argue that they didn’t know that their actions would harm your business financially.

Some defendants might try to claim qualified privilege, as well. This legal concept allows individuals in a position of authority to make statements that, if made by anyone else, would be considered slander or libel. For instance, suppose a party makes statements that hurt your business, such as claiming that you have rats in your restaurant’s kitchen.

If a disgruntled customer made that statement without proof, the law might consider it slander. But if the health inspector claims that you have a rodent problem, qualified privilege would apply.

Damages You Can Recover for Tortious Interference

If you’ve lost a contract or contracts due to a third party’s tortious conduct, what damages can you recover? If you win your tortious interference claim, you may be able to recover:

• Economic damages: These damages can include lost profits due to the loss of your contract or contracts, as well as the loss of potential future monetary benefits and services caused by the damage to your business relationship.
• Emotional distress: You may sue for emotional anguish caused by losing your contracts or harm to your business’s reputation.
• Punitive damages: A court may award you punitive damages if the defendant acted especially maliciously. This is meant to both compensate you and punish the defendant for egregious wrongdoing.

It’s worth noting that Arizona only allows you to file a claim two years from the date of the interference. If you miss this deadline, you cannot recover any damages, so it’s important to start the process as soon as possible. Reach out to an attorney to learn more about the damages you could recover.

Do You Have a Tortious Interference Claim? Call Anthony Law Group for Assistance

Do you need a more detailed answer to the question, “What is tortious interference with contract?” If you suspect that a third party used their knowledge to hurt your existing contract or business relationship, contact Anthony Law Group. Attorney Stephen J. Anthony can assist you with tortious interference, breach of contract, and more.

For a consultation regarding your tortious interference claim, contact Anthony Law Group at (602) 362-2396 today.