Interference-with-contractual-relationsThe business tort of interference with contractual relations is often associated with the business tort of interference with economic relationship. It is a common example of a third-party tortious interference claim. If a person or business who wrongfully interferes with the performance of a contract, they may be liable if the person that is required to perform under the contract fails to perform the contract.  In the business situation, this could also be a direct action for a breach of contract lawsuit.

Elements of Interference With Contractual Relations:

In order to prove an interference with contractual relations, the injured or damaged party must establish:

  • Some protectable contract right that a business relationship exists;
  • That the contractual interference was done intentionally;
  • That the contractual interference caused the loss of some economic gain; and
  • That the contractual interference, in fact, caused damage or injury.

Tortious interference with contract normally occurs when a third-party persuades a party to breach the contract with the plaintiff, or where he purposely disrupts the ability of a party to satisfy his obligations under the contract.

To establish an interference with contractual relations, the injured party must prove a protectable contract right, a business relationship exists, the interference was intentional, the act caused the loss of an economic gain, and that the interference, in fact, caused the injury.
The plaintiff in a tortious interference with contractual relations is required to prove that the defendant acted intentionally, but the plaintiff does not need to prove that the defendant acted out of malice or spite. Knowledge of the contract and the likelihood that the behavior would have caused a breach is typically enough.

This interference lawsuit grants greater protection to a plaintiff than tortious interference with prospective business relationship because a contractual relationship takes legal preference over a defendant’s conflicting right to compete.  When there is not an enforceable or valid contract between the parties, a plaintiff may not claim interference with the contractual relations but could potentially claim tortious interference with prospective economic advantage. A tortious interference with contractual relations claim is a valuable tool in a business dispute for a person or entity who believes that a client or competitor is interfering with a valuable relationship.