Economic Expectancy in a Contracts Claim
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What Is an "Economic Expectancy?"
Economic expectancy in a contracts claim refers to the amount that a person stands to gain from a business contract. It can take many forms, but generally, the economic expectancy needs to be valid in order to be enforceable. This means that the economic expectancy can’t be illegal or imaginary - it should be quantifiable into monetary amounts according to market value standards.
Economic expectancy often plays a major role in lawsuits involving wrongful or tortious interference with contracts. If a defendant interferes with a person’s economic expectancy rights, they may be required to reimburse the plaintiff for their losses.
What Are Some Examples of Economic Expectancy?
Oftentimes the economic expectancy can be determined from the contents of the written contract itself. Otherwise, the court may need to examine the entirety of the situation to determine which economic expectancies are valid. Examples of economic expectancy frequently include:
- Profits expected to be gained from the contract
- Access to business contacts or networks
- Business opportunities (such as involvement in a project, or prospective sales from a client)
Again, the main idea is that the economic expectancy must be put into numbers. For example, it’s not enough for the plaintiff to show that the defendant interfered with their ability to contact a potential client. The plaintiff would need to show how much profit they might have lost from losing that client, and should be able to back this up with proper documentation.
How Do I Prove That the Other Party Interfered with My Economic Expectancy?
The elements of proof for interference with economic expectancy are very similar to those for other types of interference, such as interference with business relations or interference with contractual relations. The elements needed for proof generally include:
- Valid Expectancy: Economic expectancies that are imaginary, illegal, or against public policy cannot be the subject of a lawsuit.
- Defendant’s Knowledge: The defendant must have known that the plaintiff was holding some expectancy. This can be proven from the contract itself, or implied from the defendant’s actions.
- Intent: The defendant intended to interfere with the contract or expectancy; accidental interferences or interferences by a different party are non-actionable.
- Actual Interference: The defendant must have taken affirmative steps to interfere with the economic expectancy.
- “Improper” Interference: The interference must be considered improper according to the standards of the parties’ relationship; for example, use of unfair business practices might be considered improper.
- Resulting Losses or Damage: The plaintiff must have suffered actual damages that can be measured without much difficulty.
Many of these elements interact with one another. For example, if the defendant didn’t have knowledge of the business expectancy, then it will be very difficult to prove that they interfered intentionally.
Also, one point to note is that not all interference is “improper”. Business is by nature very competitive, and one should distinguish between normal business competition and truly unfair dealings.
What Types of Damages Are Available for Interference with Economic Expectancy?
A defendant who is found liable for interfering with economic expectancies may be required to reimburse the injured party for:
- Monetary loss resulting from the interference
- Other losses that might occur as a consequence of the defendant’s interference
- Other losses such as harm to business reputation or emotional distress
The amount of damages might be limited according to local rules, as well as the nature of the loss. It may be necessary to consult with a lawyer regarding the specific amount of damages that can be obtained.
Do I Need a Lawyer for Economic Expectancy in a Contract Claim?
Business dealings can be fairly complex. If you have issues or questions regarding your economic expectancies, it may be necessary to hire a competent business attorney in your area. Qualified business lawyers are skilled at interpreting contracts and helping injured parties recover their economic losses in a court of law.
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Last Modified: 12-19-2014 04:54 PM PST
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