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Tortious interference with a contract occurs when a party
improperly disrupts a contractual relationship between other
parties. A business has a claim for tortious interference
with contract when it can show: (1) the existence of a valid
contract; (2) the defendant’s knowledge of that contract;
(3) that the defendant intentionally caused a breach of that
contract without justification; and (4) resulting harm.
The first element makes clear that a plaintiff must show
an existing contractual relationship, not
a prospective one. A separate claim
exists for tortious interference with a
prospective economic relationship.
Litigation over tortious interference with a contract most often
focuses on whether the defendant unjustifiably
caused a contractual breach. Courts are careful to
distinguish between legitimate competition and tortious
interference with a contract. Ultimately, for a defendant to
be held liable, its conduct must go beyond typical ethical behavior
in the marketplace. Advertising one’s goods or services
is permissible, even if the targets of that advertising have
preexisting contractual relationships with others. But
businesses should be wary of directly targeting a party
specifically in the hopes that it will breach an existing
A defendant accused of tortious interference with contract can
respond by showing its actions were justified. Justification
is a defense, however, and the defendant bears the burden of
proving it. A defendant can meet that burden in different
ways, such as by showing, for example, that it acted to protect its
own legal or financial stake in the breaching party’s
business. If the defendant makes such a showing, then the
plaintiff can prevail only by showing that the defendant’s
conduct was otherwise illegal or motivated by malice.
If a plaintiff proves tortious interference with contract, it
can generally recover for both the benefits it expected to receive
under the contract and the harms it suffered because of the
tortious interference. For example, where a defendant
tortiously interfered with a contract between a plaintiff and its
supplier, the potential damages could include the cost of finding
alternative supplies, the expected profits from any business the
plaintiff lost as a result of the breach, and the harm the breach
and interference caused to the plaintiff’s reputation.
Punitive damages may also be available if the conduct is deemed
sufficiently outrageous. As the name suggests, punitive
damages are intended to punish the defendant and deter others from
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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