What is “tortious interference”?

The term “tortious interference” covers two kinds of economic injury for which one person can sue another for damages in a civil law case.

The first, tortious interference with contract, occurs when a person who is not a party to a contract says or does something to cause one of the parties to breach the contract.  For example, suppose that A and B have a contract that states that A will sell B 1,500 widgets, and that B will pay A $1.00 per widget, or $1,500.  Two days before the sale is completed, however, C tells A that B is cheating her by only paying $1.00 per widget when B knows they really sell for $10.00 or more.  A breaches the contract with B by refusing to sell B the widgets unless B pays $10.00 per widget.

In this case, B may try to sue C for tortious interference with a contract, because C’s actions made A decide to breach the contract between A and B.

In most U.S. states, B (the plaintiff) can only hold C (the defendant) liable for tortious interference with a contract under the following circumstances:

  • a contract exists between the plaintiff and someone else (here, A).
  • the defendant knows that the contract exists.
  • the defendant does or purposely does not do something in order to get one of the parties to the contract (here, A) to breach the contract, or to disrupt A’s ability to hold up his end of the contract.
  • because of what the defendant did or didn’t do, A actually did breach the contract or was actually unable to hold up his end of the contract.
  • the plaintiff, B, suffered damages caused by A’s breach of, or inability to perform as promised in, the contract.

The second kind of economic injury is tortious interference with a business relationship. This tort is similar to tortious interference with a contract, except that an actual contract does not have to exist.  In a case for tortious interference with a business relationship, it is enough that C interfered with the relationship between A and B.  A and B do not have to have a written, signed contract between them in order for either one to hold C liable for any damages they suffered when C induced one of them to break off or change the business relationship.

Often the difference between tortious interference with a business relationship and tortious interference with a contract depends on whether or not a contract actually exists.  For instance, in the example above, suppose that C talked A out of the widget deal while A was negotiating with B, but before either one had written down or signed a contract.  In this case, B most likely has a case for tortious interference with business relationships if it seems highly likely that A and B would have made a widget-sales contract, but for C’s meddling.  “Tortious interference with a business relationship” extends the original tort of inducement to breach of contract by recognizing that the harm done is the same whether or not the parties have already signed a contract or are still working out the details.

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