Wrongful or Tortious Interference with Contracts
What is Wrongful or Tortious Interference with Contracts?
Wrongful or Tortious Interference with Contracts occurs where a person causes a party to commit a breach of contract, or where the person has disrupted the ability of a party to perform their obligations under a contract. It is also known as “tortious interference with contract rights” or “intentional interference with contractual relations”. The person causing the interference (the “tortfeasor”) is usually a third party who is not included in the contract.
Tortious interference is a serious violation and falls under tort law rather than contract law. Because it considered a tort, the act which induces the breach must be intentional. The tortfeasor must have the intention not only to commit the act, but must also have the intent that the act will result in a breach of the contract.
Tortious interference can also include the tort of interference with a business relationship. However, interference with contractual relationships occurs only when a valid contract is already in existence.
What are the Elements required to Prove Wrongful Interference?
- A valid contract or contractual relationships exists between the two parties
- The third party tortfeasor had knowledge of the contract or contractual relationship
- The third party intended to convince or induce one of the parties to the contract to commit a breach
- The third party was not privileged or authorized in any way to induce the breach
- The contract was in fact breached
- The non-breaching party suffered some sort of measurable damages
Thus, the main purpose of wrongful interference laws is to allow parties to be free to contract with one another, and to allow them to fulfill their contract obligations. If a third party intentionally persuades or convinces one of the parties to commit a breach, they could be held liable under these laws. Unintentional or accidental acts are not considered to be tortious interference.
An example of contract interference is where a third party convinces an employer to breach an employment contract based on false statements regarding the employee. If the employer fires the employer in violation of the contract provisions, this may be considered tortious interference with contract.
What are the Remedies for Wrongful Interference?
- Legal remedies:
- Economic losses for loss of profits, financial losses, etc.
- Punitive damages, if malice can be attributed to the wrongdoer
- Equitable remedies:
- Injunctive relief, such as an order preventing the tortfeasor from benefiting from the contract interference
Monetary damages may be calculated using a variety of factors, including fair market values or prices listed in the contract itself.
Do I Need a Lawyer for Tortious Interference with Contract?
If you have suffered losses due to an interference with your contract rights, you should contact a lawyer immediately. Your attorney will be able to advise you on your rights to economic recovery or equitable relief. Failure to bring a claim in a timely manner can limit or even prevent your ability to recover your losses. Likewise, if you are being accused of tortious interference, a lawyer can help defend you if a lawsuit is filed in court.
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Last Modified: 10-24-2012 11:47 AM PDT