One of the main goals of most businesses is to have the potential to engage in business relations with other businesses, customers or third parties.
Still, the business world can be cut-throat. Competition is fierce. However, when does mere competition cross the line into the tort of wrongful interference with the business relations of another?
The first element of a tortious interference with business relations claim is that the plaintiff had a current business relationship with a known third party. This means the plaintiff had the existing intention to do business with the third party, such as entering a contract with a supplier or executing a joint venture with an investor.
The second element of a tortious interference with a business relations claim is that the defendant was actually aware of this relationship and purposely interfered with it. The defendant’s needs to have actual knowledge of the exact details of the prospective relationship to be aware of it.
The third element of a tortious interference with business relations claim is the defendant interfered only to be malicious or used improper or unlawful means to interfere.
The defendant is malicious if their sole purpose in interfering is to cause the plaintiff harm. Not all intentions are to cause harm. For example, if the defendant was simply promoting their own business, this would not be considered an act of harm.
Still, the defendant cannot use improper or unlawful means to interfere. Some examples of wrongful or unlawful means of interference include:
- Criminal acts such as assaulting the plaintiff or third party
- Committing fraudulent acts
- Filing frivolous lawsuits against the plaintiff
- Placing excessive financial pressure on the third party
The fourth and final element of a tortious interference with business relations claim is the interference by the defendant caused the plaintiff to suffer damages to their relationship with the third party.
This means that but for the defendant’s interference, the third party would have entered into the prospective business relationship with the plaintiff and due to the fact that they did not do so, the plaintiff suffered quantifiable damages.
When tortious interference with business relations is suspected
If a business believes it was subject to a business tort such as interference with business relations, it might file a lawsuit. If so, the defendant will have to develop a defense showing the plaintiff does not satisfy the elements of this claim.