In Massachusetts, business relationships rely on contracts as legally binding agreements to document the details of economic transactions and to provide trust. Competition is ever-present, and while this is fair play in most circumstances, some competitors cross the line into actionable conduct. The following goes deeper into what qualifies as interference.
Interference with a business contract
Any third party that intentionally disrupts or otherwise interferes with an existing contractual relationship could be liable for damages that result from their actions.
In business litigation, the disrupting party can be held responsible for their actions through a claim of tortious interference with a contract or an advantageous business relationship. They can also be liable for interfering with an expected agreement that two parties have not yet finalized.
Elements to establish interference
Establishing contract interference requires a detailed analysis of the situation and each of the following elements must be present:
- The plaintiff, or injured party, had an existing or expected contract, or an advantageous business relationship, with another party.
- The defendant knew about the contract or relationship.
- The defendant induced the party to breach the contract. They may also have induced non-performance or impairment to the contracted agreement.
- The defendant employed improper means to induce the party’s behavior.
- The defendant’s conduct harmed the plaintiff economically.
What constitutes improper means?
Interfering with a business contract through normal business competition may be unintentional and legitimate. However, interfering knowingly using improper means provides grounds for litigation.
Improper means include:
- False statements or misrepresenting facts to induce a contract breach
- Bribery, coercion or threats such as physical or financial harm
- Illegal conduct, such as committing crimes to disrupt a contractual relationship
- Violating industry norms
- Violating fiduciary duty, such as with corporate officers or directors
The competition does not always fight fairly in the business world. Filing a contract interference claim may help you receive the current and future economic damages you’re entitled to.
