Companies rely on contracts of all kinds to conduct business. Sometimes they may find that someone not part of the contract willfully and intentionally interfered with the agreement. This action can prompt the business that suffered damages to file a tortious interference of with contract or prospective economic advantage against the third party.
To qualify as tortious interference, the third party’s interference was illegal, improper or wrongful. Obvious examples would be if they committed fraud or misrepresentation, violated a non-compete agreement, or misappropriated a trade secret.
These actions must go beyond tough or enthusiastic competition, perhaps by illegally acquiring proprietary information. Moreover, the party must act intentionally and not negligently.
The basic elements
To prove tortious interference, the plaintiff must establish the following:
- The defendant’s interference was improper
- The plaintiff had a valid contract, prospective contract or business relationship
- The defendant knew about the agreement at the time of the interference
- The defendant’s actions led to a contract breach
- The plaintiff suffered damage
A successful claim involves compensation for the loss of revenue, which the plaintiff must clearly illustrate.
What if there are criminal charges?
If the case involves claims beyond impropriety, there may also be criminal penalties if the defendant is accused of fraud, theft, embezzlement, or other crimes. Plaintiffs or defendants unsure of their best course of action can consult with an attorney who handles business litigation at the state or federal level.