Intentional Interference With Contract: Everything You Need to Know
Intentional interference with contract is when an international inference claim occurs and there is a contract to prove the claim for the plaintiff instead of having the defendant prove that their acts were justified. 3 min read
Intentional interference with contract is when an international inference claim occurs and there is a contract to prove the claim for the plaintiff instead of having the defendant prove that their acts were justified. A defendant might be liable to pay damages for their actions if they intended to interfere with the contractual relations the plaintiff had with a third party.
What Is Intentional Interference with Contractual Relations?
In order to act on the claim, the plaintiff needs to prove the following:
- That a contract that was valid existed
- That the defendant knew of the contract
- That the defendant acted improperly and intentionally
- That the plaintiff was inured due to the defendant's actions
Any interference with a business contract lets two parties hold a third person accountable if they caused one or all of the parties to suffer damages due to their interference. This is related to the tort of tortious interference related to business expectancy. The main difference between business and contract expectancy is the second one means both parties must have a contract, while the first one can apply to any business relationship.
Tortious interference is a type of common law economic tort and happens when one of the parties interferes with the relationships or contracts of the other party and intend to cause economic harm. The reason for having laws in place for this is so parties can freely contract with each other and fulfill any obligations in their contracts without a third party getting in the way.
Known as the tortfeasor, the third party who interferes is often a person who was never part of the original contract and is getting in the way to benefit their own financial gain. Tort law will be used in this case instead of contract law. The plaintiff will need to show that the tortfeasor purposely acted to get in the way, both with their actions and the contractual breach that resulted. This means they knew about the contractual relationship and still caused the breach.
How to Prove Tortious Interference?
For a plaintiff to prove that tortious interference with contract occurred, they must demonstrate several factors happened first. They need to show that there was a contract with another person that the plaintiff had which the defendant knew about, that breach of contract happened due to the defendant acting in a way to have this occur, and that as a result, the plaintiff suffered damages. The defendant can be held liable for the breach of contract in several different ways. They may have threatened, coerced, or encouraged the other party into breaching.
They may have also made it not possible for one of the parties to meet their obligations so they wouldn't be able to hold up their part of the bargain. The plaintiff needs to show that the defendant intentionally did their actions, but they don't need to prove it was out of spite or malice. They only need to show that the defendant clearly knew a contract existed and their behavior caused the breach of contract.
Laws on Tortious Interference
The law that controls tortious interference with contracts varies in each state. Most states require that a tortious interference with contract claim can only be made if there was an existing contract when the defendant caused their actions to breach the contract. Any other kind of interfering behavior might be able to support the tortious interference claim, but without a contract, there is no basis for a claim. Some plaintiffs decide to file their claim for both torts if it's questionable if the contract existed when the lawsuit was filed.
Common Forms of Tortious Interference
The interference that occurs the most is when someone induces or forces another person to break the contract. This could be due to someone threatening or blackmailing another person into violating their contract, offering below what the market prices are to cause a breach, or refusing to transport goods to make it unachievable for the other person to perform their duties. Negligence alone is not enough, and it can't be considered tortious interference just because someone acted intentionally.
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