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What happens if a third party interferes with an existing contract?

A contract can be an overly complex thing. You must follow it to the letter, as a violation can hold you or the other party liable. The agreement is also supposedly only between parties specified in the contract.

Suppose a willful and intentional interference by a third party with your contract causes you to suffer damages. In that case, you may have the right to file a tortious interference lawsuit against them.

What is tortious interference?

Tortious interference occurs when a party intentionally damages someone else’s contractual or business relationships with another party. The interference with the contract must be wrongful, improper or illegal. An example is when a third party commits fraud or misrepresentation or if they misappropriate a trade secret. Violation of a noncompete agreement may also count as tortious interference.

It is not enough to claim that the other party was a tough competitor. Actions taken must go beyond enthusiastic competition, and they should have acted intentionally rather than negligently.

What are the essential elements of a tortious interference claim?

You need to prove certain things to file a tortious interference claim.

  • That a valid contract is in place, or at least a prospective contract or business relationship
  • That the defendant knows of the contract or relationship
  • That the defendant interfered with the contract or relationship intentionally and that they were successful in doing so
  • The cause of the interference is not just mere competition – it involves wrongdoing or impropriety
  • That you suffered damages

It may not be appropriate to file a tortious interference claim when a competitor outbids you unless they had access to proprietary information to do so. You also cannot sue for tortious interference if you did not lose any money because of it.

Under the right circumstances, a tortious interference claim can help you correct a wrongdoing. You may also obtain compensation for your losses. However, remember that these claims require evidence of actual impropriety or illegality.

If you believe there was a wrongful and intentional interference with your contract or business relationship by a third party, an experienced business law attorney may help you understand your legal options.