Business Tort Series: Tortious Interference

Business Tort Series: Tortious Interference

There are many issues that business owners contend with day-to-day from employee relations to contract negotiations to supply chain efficiencies. Infrequently, issues arise in the conduct of a business where the business’s relationship with another individual or business is negatively affected by a third-party that causes harm to your business in lost profits or reputation.

One example is if a competitor persuades a customer of yours to break off its relationship with you to switch to the competitor. Another example would be where a supplier is late with a shipment, which causes lost profits to your business and there was a separate person or business intentionally interfering with the delivery of those goods.

What is Tortious Interference?

Tortious interference is a type of tort, or civil wrong, that relates to contract rights when one person or entity intentionally interferes with another’s contract or business expectancy. There are different subcategories of tortious interference, including:

• Contracts for a stated period of time
• Contracts terminable at will (e.g. a contract that has no stated termination date; also, most employment contracts)
• Business expectancies (where no contract has yet been entered into, but is likely to be)

Intention is Key

There are important distinctions, however, in determining whether an action constitutes tortious interference, or whether an action was simply legitimate competition. It is important to remember that the intent of the interfering party is essential to proving a case of tortious interference. Tortious interference cases are always very fact specific. If you believe someone has improperly interfered with your business, you should see an attorney to help you evaluate whether or not you have a cause of action to protect your business.

The Commercial Group at MichieHamlett can help provide the guidance to determine whether your business has been harmed by a tortiously interfering party, and what actions you can consider in dealing with the situation.