Competition — friendly or otherwise — is a normal part of doing business. It drives value, innovation, and market growth. Sometimes, however, competition can go too far and give rise to a legitimate business dispute. Tortious interference is one place where competition crosses the line of legality.
Tortious interference occurs when a third party prevents someone from receiving the benefits of a contract they have with another. To illustrate, let’s say that Company A contracts with Carrier B to deliver a truckload of perishable goods by a certain date. Company C, however, offers Carrier B more money to deliver its own cargo rather than that of Company A. Company A’s cargo spoils.
In these cases, the intervening company may have tortuously interfered with the original contract. In any ensuing business litigation between the two firms, the aggrieved company would have to prove a handful of elements to make a case of tortious interference against the intervening company. This would include having to prove that it had a valid contractor reasonably expected to receive some economic benefit from its relationship with the contracted party.
After establishing those elements, the plaintiff would have to prove that the defendant knew about its economic relationship with the other company and made an intentional decision to interfere with the relationship and deprive it of its benefits. Then they must show that the defendant actually interfered with the relationship and in doing so, acted improperly. Finally, the plaintiff must prove that it suffered damage as a result of the interference.
Most instances of tortious interference are not cut-and-dried. The elements of the case may be more ambiguous and difficult to decipher. In circumstances where a contract may have been interfered with, a law firm experienced in complex business litigation is in the best position to explain legal options and help to protect their clients’ contractual relationships.