Businesses will rely on contracts to outline different arrangements as they provide goods or services. Ideally, these business arrangements can go for the length of a project or countless projects. Unfortunately, one partner may realize that someone outside the agreement is willfully interfering with the terms of the contract or their prospective economic advantage. This action may mean that the business that suffered damages files tortious interference against a third party who interferes with the agreement or arrangement.
What qualifies as tortious interference?
Generally speaking, tortious interference occurs if the third party’s improper, wrongful or illegal actions. Common examples are:
- Violating a non-compete agreement
- Misappropriating a trade secret
- Fraudulent actions
- Misrepresentation
These examples exceed vigorous competition and may include illegally acquiring and using proprietary information. The defendant’s actions must also be an intentional acts rather than unintended happenstance.
Proving it
Plaintiffs must establish the following essential elements for proving tortious interference:
- The plaintiff has an enforceable contract, prospective contract or established business relationship.
- The defendant’s actions led to a breach.
- The defendant’s interference was wrong.
- The defendant was aware of the standing agreement at the time of interference.
- The plaintiff suffered financial damage and damage to their reputation.
A successful claim can involve financial compensation for loss of revenue.
There may be criminal charges
These disputes can involve fraud, theft, embezzlement, or other crimes, which can further complicate matters. Potential plaintiffs or defendants unsure of how to proceed can consult with an attorney to determine the best course of action.