Intentional Interference with Contractual Relations Lawsuit

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 What Is Intentional Interference With Contractual Relations?

Intentional interference with contractual relations arises when an outside party interferes with an existing contract between two parties that results in one or more of the following:

Aside from marriage contracts, any type of contract may be interfered with. Examples of common types of contracts that are interfered with include:

Tortious or wrongful interference with contractual relations occurs when a third party intentionally causes a contracting party to commit a breach of contract. The interference may be accomplished as a result of inducement or the disruption of a party’s ability to perform as outlined in the terms of the contract.

A third party who interferes with a contract is called a tortfeasor. In general, the third-party tortfeasor is an individual who was not an original party to the contract and is interfering with the contract for their own financial gain. Because of this, the remedies available to plaintiffs are found in tort law as opposed to contract law.

A plaintiff is required to prove that a tortfeasor acted intentionally, meaning that they were aware of the contractual relationship and caused a breach anyway. Tortious or wrongful interference with contracts may also be called by other names, including:

  • Tortious interference with contractual rights;
  • Intentional interference with contractual relations;
  • Unlawful interference with contractual relations;
  • Interference with a contractual relationship;
  • Interference with a contract;
  • Inducement of a breach of contract; or
  • Procurement of a breach of contract.

Although the laws of each state may vary, intentional interference with contractual relations typically involves the following issues:

  • Did a contractual relationship exist?;
  • Was the outsider aware of this contractual relationship?;
  • Did the outsider act intentionally to disrupt the contractual relationship?;
  • Was the contractual relationship actually disrupted?; and
  • What were the damages to the injured party?.

The knowledge of the individual who is interfering is an important element. If an individual does not know about the contract, they cannot be held liable when their lawful acts result in a breach.

In addition, if the individual’s purpose was not to interfere with the contract, they cannot be held liable even if their actions have an unintended effect of discouraging one party from contractually dealing with the other. The individual must also not have any legitimate social or economic interest in the contractual relationship.

An individual may also be able to bring a lawsuit for intentional interference with contractual relations if a third party interrupts contractual negotiations that would have resulted in a binding contract.

What Are the Elements of Intentional Interference With Contractual Relations?

In general, a plaintiff is required to prove the following elements to have a successful intentional interference with contractual relations claim, including:

  • A valid contract or contractual relationship existed;
  • The tortfeasor was aware of the contract or relationship;
  • The tortfeasor intended to induce one of the contracting parties to breach the contract;
  • The tortfeasor was not authorized or privileged to induce a breach;
  • The contract was actually breached; and
  • The plaintiff suffered economic damages as a result of the tortious or wrongful interference with the contract.

It is important to be aware that the specific elements required to prove this claim may vary by jurisdiction.

What Are the Remedies for Wrongful or Tortious Interference With Contracts?

Generally, the remedies that are issued in tort cases will depend on the type of harm that was caused to the plaintiff in addition to the seriousness of the harm that was caused. The remedies that are typically available to plaintiffs in cases of tortious interference with contracts include both legal damages and equitable relief.

A legal remedy is what allows a plaintiff to recover monetary damages, which may include:

  • Compensatory damages;
  • Lost profits;
  • Punitive damages;
  • Lost wages;
  • Expectation damages;
  • Restitutionary damages awarded to prevent the unjust enrichment of the defendant.

A common type of remedy that is often awarded in civil tort cases includes compensatory damages or monetary damages that are awarded to a plaintiff. These damages are intended to compensate the plaintiff for economic losses, including medical expenses or other costs that are related to repairing or replacing property.

Although it is relatively rare, a plaintiff may also be awarded punitive damages under very specific circumstances. Punitive damages are damages that are intended to punish a defendant for their egregiously harmful conduct or gross negligence. These types of damages are only rarely awarded in the most egregious of cases when courts believe compensatory damages would not be sufficient to compensate the plaintiff.

Equitable relief may include an injunctive order that prevents a tortfeasor from benefiting from their interference. In general, it may be required that legal damages be unavailable for a court to issue equitable relief.

Examples of types of equitable remedies include:

  • Specific performance: Specific performance is a court order that requires the breaching party to perform their duties under the contract completely;
    • An example of this would be requiring a breaching party to deliver goods that were already paid for;
    • Another example would be ordering a breaching party to pay for services that were rendered;
  • Contract rescission: Under contract rescission, the old contract which was breached is rescinded or canceled. A new contract may be written in place of the old contract that more clearly addresses the different needs of each of the parties involved in the contract;
  • Contract reformation: With contract formation, the previous contract is rewritten in order to reflect the true intentions of each of the parties more accurately. This remedy requires that a valid, working contract already exists, or there would be nothing to re-write;
    • Reformation is often prescribed in cases where there was some mistake or misrepresentation in one of the contract terms;
    • Reformation is also referred to as rectification; and
  • Constructive trust: A constructive trust may be awarded when a defendant wrongfully obtained property that belonged to the plaintiff and used it to increase the value of their own property.

Is Intentional Interference With Contractual Relations a Crime?

No, intentional interference with contractual relations is not a crime. Instead, it is a tort.

A tort is an act or omission that results in harm or injury to another individual. It is a civil wrong for which a court will impose liability.

Do I Need an Attorney?

If you believe that a third party has disrupted a contract relationship that you are involved in, it is important to consult with a contract lawyer. Your lawyer can advise you of your legal rights as well as help preserve any available legal remedies in your case.

If you have been sued for intentional interference with contractual relations, it is essential to consult with a lawyer as soon as possible. Your lawyer will help protect your rights and present any defenses that may be available to you.

Your lawyer will review your contract as well as any additional documentation that may be relevant to your case. It is important to bring your claim in a timely manner, as not doing so may prevent you from being able to recover for your losses.

In addition, if you have been sued and you do not respond at the proper time, you may face a default judgment and be liable for the plaintiff’s losses, even if you did not cause them. Having a lawyer on your case will provide you with the best chance of a favorable outcome.

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