Tortious Interference with a Prospective Economic Relationship Explained
When an individual or entity intentionally obstructs, harms, or disrupts another business or contractual relationship, they are said to have committed tortious interference. The responsible party can be held liable for damages incurred to the other person due to the harm caused to their business relationship.
When two parties enter into a business relationship, they are entitled to having each party perform their roles without interference from third parties. This statement is the underlying principle in the Restatement (Second) of Tort Law Section 766.
Arizona tort law gives six elements that the aggrieved party (plaintiff) needs to prove in court that the defendant committed tortious interference. These elements include:
- An economic relationship existed between the plaintiff and the third party
- The defendant’s awareness of the economic relationship
- The defendant’s intentional interference led to the plaintiff’s inability to benefit from the business relationship
- The lack of privilege for the defendant to cause the third party to go against their economic relationship
- Clear evidence of the damages caused by the plaintiff
- Other adverse effects resulted from the defendant’s interference or harm to the plaintiff.
While tort law recognizes that businesses and individuals are free to compete, There are certain situations where tortious interference occurs. For instance, when a person’s actions create an unlawful, blameworthy, and illegitimate competition.
Let us discuss these instances and look at what a tortious interference claim entails and how to differentiate it from legitimate competition.
Actions that Lead to Tortious Interference
Tortious, under civil law, means an action that causes harm to someone. Interference means to intrude or meddle with something or someone without invitation. Hence, tortious interference is a common law doctrine where an uninvited person wrongfully intrudes on another person’s economic relationship and causes harm.
Other commonly used terms include malicious interference, wrongful interference, and intentional interference. The following actions qualify as a tortious interference that can lead to a lawsuit:
- Unethical behavior
- Abusive litigation
- Unlawful dealings
Tortious interference is not easy to prove against a competitor without the services of experienced business attorneys who understand the Tort Law. The attorneys at The Sorenson Firm have the resources and expertise to prove that a competitor can aim to restrain trade and not seek to compete with a plaintiff legitimately.
Tortious Interference Claims
Tortious interference with a prospective economic relationship can be committed under negligence or intentionally. If the claim is based on an intentional act, the plaintiff must prove the defendant acted with malice and had the desire to cause harm.
Additionally, if the claim is based on negligence, the plaintiff must also prove the defendant had a duty of care that they failed to execute, resulting in loss of economic advantage.
The plaintiff can be the person forced to breach the agreement or who lost the economic advantage after the other party breached the agreement. Tort Law allows both victims to pursue the person who interfered with their relationship (defendant).
During the hearing, the plaintiff must demonstrate that a legal business relationship or transaction existed and the economic advantage they could have achieved if there had been no interference.
The defendant in a tortious interference lawsuit can present privileged defenses, allowed by the Tort Law, such as:
- Their action was in good faith and reasonable
- They had a significant business interest to protect
- They did not use improper and deceptive action as alleged by the plaintiff
- They perceived that their interest was being harmed and had to take protective measures
If the defendant can show the court that they applied rational and acceptable business judgment, the judge or jury may be reluctant to interfere with reasonable business decisions.
The Sorenson Law Firm understands this position well, and we can efficiently represent you in court— whether as a plaintiff or defendant. In our first consultation, we can tell you the chances you have of succeeding in getting a fair judgment.
Difference between Tortious Interference and Legitimate Competition
When the court receives a tortious interference suit, they will first ensure they differentiate the allegations between legitimate and free competition from wrongful and malicious interference. Tort Law allows businesses to compete and lawfully fight for the same business.
Nonetheless, if a party acts in bad faith by defaming or disparaging a product or service, violates antitrust laws, or uses unfair competitive means, the aggrieved party can take legal action.
But, if the party uses aggressive but legal competitive strategies, discontinues a product or service without malice, or positions a competitor’s product as inferior without intentionally causing harm, then a tortious interference claim may be unsuccessful and labeled as legitimate competition.
Work with The Sorenson Law Firm
The Sorenson Law Firm is a reputable legal organization with a wealth of experience handling business litigation and tortious interference cases. Whether you were coerced or forced to breach an economic relationship agreement or suffered harm from a breach of a business relationship, we will assist you in recovering damages and receiving a fair judgment. Book a free consultation today.