What is Tortious Interference With a Contract?

What is Tortious Interference With a Contract?

What happens when a third party interferes with a contract maintained by other parties? In some cases, the third party may be liable for a business tort called tortious interference with contract. This cause of action exists to protect the sanctity of contractual relations. Some form of this action exists in nearly every state jurisdiction. If you believe the performance of your contract is being hampered by someone else, you may be able to file a lawsuit. A business law attorney can help yo prove the elements of tortious interference.

What Constitutes Tortious Interference?

Essentially,the term means that another party interfered with a contract in a way that caused damage to the contracting parties. In order to prevail in a lawsuit, there are five general elements that must be proven.

First, the plaintiff must show that there was a valid contract in existence. The plaintiff must also be a party to this contract. Next, it must be shown that the defendant had knowledge about the contract. Third, the defendant must engage in an act that prompts a breach of the contract. The defendant must do so in an intentional manner. The plaintiff also must provide proof that the contract was, in fact, breached. Finally, the filing party will need to prove some sort of damages. A third party meddler can be liable for any damages resulting from the failed contract.

Utah's Version of Tortious Interference

Prior to 2015, a plaintiff could win a lawsuit merely by showing the defendant had an improper purpose. The Utah supreme court reviewed, and changed this phrase in the case Eldridge v. Johndrow, 2015 UT 21, 2015 WL 404491. In this case, a businessman was accused of making disparaging remarks about a fellow businessman (Eldridge). These statements were made to Eldridge's clients. Eldridge sued the businessman for the tortious interference with business relations.

Utah's high court found that the term "improper purpose or means" should be redefined. The court modified the element to cover only improper means. The court's reasoning was that the terminology involving an improper purpose could stifle normal business competition tactics. Thus, Eldridge did not prevail on the appeal to the supreme court. Instead, the case was sent back to the trial court for consideration under the new rule.

Proceeding in a Tortious Interference Case

The Utah supreme court clarified the cause of action in the Eldridge case. Now, to prove your case it must be shown that the defendant committed an intentional act, using improper means which caused injury to the plaintiff. If you are a business owner who feels you have been subjected to unfair meddling by a third party, contact a business attorney. A business law office such as Spencer and Collier, PLLC can help determine if you have a viable claim.

Tags: business contract, contracts

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