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What is tortious interference with a contract claim?

On Behalf of | Nov 5, 2021 | Business Disputes |

Tortious interference falls under common law tort. It occurs when an entity intentionally and improperly interferes with a business relationship of another party to cause economic harm. The most common type of interference occurs when a business entity induces a potential client to break a contract with another business entity.

For example, a vendor may sell their items at lower prices to induce a buyer to breach a contract with another vendor. Another common way in which vendors may force potential clients to breach a contract is through blackmailing. This act is common among business competitors or former business partners. When this happens, the affected party may file claims for tortious interference.

What are the elements of tortious interference with a contract claim in Philadelphia?

In a tortious interference claim, the plaintiff can either be the party forced to violate the terms of an agreement or the party that initiated the contractual agreements but lost the benefits of the contract. The suspect in these claims is the party that allegedly caused the breach of a contract.

Other elements of this claim include:

  • A valid contract between the claimant and a third party
  • Actual interference. The claimant’s actions must cause interference. No tortious interference is assumed to have occurred if the efforts fail to induce a party into breaking a contract
  • Evidence that the plaintiff suffered damage from the interference
  • The interference was improper 
  • In the case of prospective contracts, proof that the defendants’ actions led to the failure of business relations.

What is considered a valid contract in a tortious interference claim?

One of the essential elements in a tortious interference claim is the presence of a valid contract. If the contract terms are not transparent or violate public policy, then it means that the contract is not valid. This also means that the claim is not valid, and the defendant does not have any liability for its breach.

According to some contracts, it is possible to terminate the agreement at will. However, if the defendant knowingly induced one of the parties to end the contract with improper motives, they can be accused of tortious interference.

What are the remedies for tortious interference?

In case the court rules out that there was tortious interference, the defendant may be subjected to actual financial losses caused by the interference. Other consequences include injunctive relief and punitive damages.