What is Tortious Interference and What Are its Consequences?

In the competitive world of business, unfair and disruptive tactics can sometimes come into play. Fortunately, there is a legal cause of action by which businesses can protect themselves from such conduct, allowing them to seek compensation for financial losses caused by what is known as tortious interference.

Simply put, tortious interference is a civil wrong that occurs when a third party intentionally disrupts a valid business relationship or contract, leading to damages for the aggrieved party. For example, Company A has a signed contract with a critical supplier. If Company B, a competitor, pressures or tricks the supplier into breaking the contract with Company A, a claim of tortious interference might be viable.

There are two main types of tortious interference claims in business litigation:

• Tortious interference with a contract — This occurs when a third party, aware of an existing contract, induces a party to breach its terms. This inducement can take various forms, like offering better deals, spreading misinformation about the other party or even resorting to threats or intimidation.
• Tortious interference with a business relationship — This is broader and applies to situations where no formal contract exists, but a legitimate business relationship or a prospective economic advantage (business expectancy) is disrupted by a third party’s actions. This could involve poaching a key client, sabotaging negotiations or spreading malicious rumors about a business.

For a successful tortious interference claim, the interference must be intentional. The alleged wrongdoer, referred to as the tortfeasor, must have known about the existing contract or business relationship beforehand. The burden of proving this intent lies with the party suing for damages. However, courts often consider circumstantial evidence, like the timing and nature of the third party’s actions, to infer intent.

Furthermore, the suing party must also prove that the alleged tortfeasor’s actions directly caused them harm. This could involve lost profits due to a breached contract, missed business opportunities due to a disrupted relationship or reputational damage caused by malicious interference.

Whether you’re a business owner concerned about a competitor’s tactics or facing a tortious interference claim yourself, a skilled business litigation attorney can analyze the facts of your situation and determine the strongest legal strategy, be it asserting a tortious interference claim or mounting a robust defense.

Law Offices of Donald W. Hudspeth P.C. in Phoenix, Arizona takes a practical approach to litigating tortious interference cases. To schedule a consultation, call our firm today at 866-696-2033 or contact us online.