Should You Worry About Tortious Interference With Contract?

Lets say that you own an air conditioning repair company. Your competitor has a large account with the local apartment complex—a lucrative account, and you want that account. So, you go to the apartment complex yourself and you pitch your business. You sit down with the property owner. You then find out your buddy is an assistant manager there—you have an in and you use it. You win that air conditioning repair contract.

Except for one problem: you potentially can be sued by the company that had the previous air conditioning contract because you engaged in what is known as tortious interference with contract.

What is Tortious Interference of Contract?

Tortious interference with contract can be confusing to many people because competing for business seems like good, honest, American free-market capitalism. But actually the law doesn’t allow you to steal, undermine, or cut off an existing contract between two parties.

To some extent, good old fashioned business is OK. If in our example you simply sent a flyer to the complex and they contacted you and hired you, you likely would not be sued. Tortious interference with contract requires that you do something a bit more than just everyday business practices to be sued for tortious interference with contract.

You must do something that causes or induces a party to break their contractual obligation. For example, offering your air conditioning repair services, by itself, may be OK. Telling the apartment complex that your competitor uses substandard parts, or that it hires felons, or that it got fired by another complex would likely be tortious interference (as well as defamation).

Your actions must be intentional. If you somehow “accidentally” cause or induce someone to break their existing business relationship or contract, you cannot be sued for tortious interference with contract.

Knowledge Matters

You also have to know that there is a contractual relationship in order to be sued. So, if you had no idea that the apartment complex had any air conditioning repair company already under contract, or that there was some kind of business relationship between the two companies, you likely could not be sued.

There is some leeway for businesses to interfere when they are protecting their own pre-existing rights. For example, if you have fixed a business’ air conditioner for 20 years, and someone comes along and signs a contract with that business, you likely could contact that business to try to “win” them back.

As you can see, a lot of these elements are highly subjective and will depend on the unique and specific circumstances of your case. It is hard to always say what is and what is not tortious interference with contract.

Call the West Palm Beach business litigation attorneys at Pike & Lustig today for help with your business, to help market and promote your business the right way, and to keep your business out of legal trouble.

Resource:

amherst.edu/system/files/media/0227/mcchesney.pdf