Tortious interference with contract is a business tort that allows two parties to a contract to hold a third person liable if that person interfered with the contract in a way that caused one or both of the parties to suffer damages. It is related to the tort of tortious interference with business expectancy. The primary difference between these two types of tortious interference – contract and business expectancy – is that the first one requires the two parties to have a contract, while the second one applies to any kind of business relationship.
In order to prove a case of tortious interference with contract, a plaintiff must be able to demonstrate all of the following things are true:
- the plaintiff had a contract with another person or business,
- the defendant knew about the contract,
- the defendant deliberately acted in a way that would cause a breach of contract,
- the breach of contract occurred, and
- the plaintiff suffered damages as a result.
A defendant in a tortious interference with contracts case may be held liable for causing a breach of contract between the plaintiff and the other contracting party in a number of different ways. For instance, the defendant may have encouraged, threatened, or coerced one of the parties to the contract into breaching. The defendant may also have interfered by making it impossible for one of the parties to meet its obligations under the contract with the intent that being unable to hold up its end of the bargain would force one of the parties to breach the contract.
In addition, the plaintiff in a tortious interference with contract case must show that the defendant acted intentionally. The plaintiff does not, however, have to prove that the defendant acted out of malice or spite. For a tortious breach of contract case, the plaintiff only has to show that the defendant knew that there was a contract and that his behavior was likely to cause a breach of that contract.
The plaintiff must also show that the defendant had no privilege or justification for breaching the contract. If a legal privilege or justification exists, the defendant may not be held liable even if he intentionally caused a breach of contract. For instance, suppose that in a tortious interference with contract case, the plaintiff and defendant are sister and brother. The plaintiff claims that the defendant intentionally caused a breach in a contract between herself and someone she had hired by talking the third person out of working for the plaintiff.
However, the defendant shows that the contract was one in which the plaintiff had hired the third person to kill her husband, and the defendant talked the third person out of committing the murder in order to save the husband’s life. In this case, the defendant had a legal justification for causing the breach of contract, and the plaintiff cannot recover damages (and could easily be charged with a crime!).
The law that governs tortious interference with contracts differs in each state. In most states, however, a claim for tortious interference with contract can only be made if a contract actually existed at the time the defendant acted and/or if the defendant’s actions actually caused a breach of that contract. Any other type of interfering behavior may support a claim of tortious interference with business expectations, but if a contract does not exist, neither does a claim for interference with that contract. Because the question of whether or not a contract existed may be “up in the air” when a lawsuit is first filed, some plaintiffs and their attorneys choose to file a claim for both types of torts, even though only one actually applies to the case.