Wrongful or tortious interference with contracts refers to a situation in which a third-party intentionally causes a contracting party to commit a breach of contract. This may be accomplished through inducement or by disrupting a party’s ability to perform their contractual obligations. The purpose of tortious interference laws is to allow parties the freedom to contract with one another and fulfill their contractual obligations without third-party meddling.
The third-party interferer, called the “tortfeasor,” is usually an individual that was not party to the contract and is interfering for his own financial gain. For this reason, the plaintiff’s remedy will be in tort law, rather than contract law. The plaintiff (the non-breaching party to the contract) will have to show that the tortfeasor acted intentionally, both with regards to his own actions and the resulting contractual breach (meaning he must have known about the contractual relationship and caused the breach anyway).
This cause of action goes by many 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
- Procurement of a breach of contract
A related cause of action is “tortious interference with business relations,” which does not require a valid contract to be in existence at the time of the interference.
The specific elements for proving tortious interference may vary from jurisdiction to jurisdiction. Usually, a plaintiff will be required to show:
- A valid contract or contractual relationship existed
- The tortfeasor had knowledge of this contract or relationship
- The tortfeasor intended to induce one of the contracting parties to commit breach
- The tortfeasor was not otherwise privileged or authorized to induce breach
- The contract was in fact breached
- The plaintiff suffered specific economic damage as a result
Remedies available to plaintiffs in a tortious interference case include both legal damages and equitable relief.
- Legal damages can encompass economic losses, such as lost profits, as well as punitive damages, which are awarded to plaintiffs as a way of punishing malicious wrongdoers.
- Equitable relief may consist of an injunctive order preventing the tortfeasor from benefitting from their interference.
If you have suffered losses due to an interference with your contract rights, you should contact a business 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.
Tort Law in other States: