The Definition of a Wrongful Interference in a Business Relationship Small Business | Setting Up a New Business | Setting up a Small Business By Jill Stimson J.D. Click here.

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The Definition of a Wrongful Interference in a Business Relationship

ByJill Stimson J.D.

Tortious interference is the legal term that describes an intentional interference with contractual relations. The definition of tortious interference includes the wrongful interference in a business relationship. Based on common law tort and contract principles, courts can order damages to compensate individuals or business owners for economic harm caused by someone who tortiously interferes with their business relationships. State laws vary as to the specific principles required for a party to successfully assert a tortious interference claim.

Tortious Interference

Tortious interference occurs when someone wrongfully interferes with your business relationship. If you are a small-business owner, you can sue another party for tortiously or wrongfully interfering with your business relationships. For example, if a competitor contacts your employee and persuades him to leave your company to work for him or persuades a customer to breach a contract with you, you may sue him for tortious interference.

Economic Harm

In the context of tortious interference with business relationships, you must typically prove that but for another company's business interference, you would not have suffered economic harm. Economic harm includes a loss of profits. If you were involved in a contract negotiation and signing the contract was imminent, you can sue another company for tortious interference if it persuaded the other contracting party to sever all business ties with you. This may occur when a third party offers a prospective customer a better price or faster service.

Employment Relationships

In the context of employment relationships, the doctrine of at-will employment may make it difficult for you to persuade a court to award you damages for tortious interference. In other words, to promote economic growth and freedom of employment, many states may not recognize a tortious interference claim in the employment context.

Damages

Courts can award damages to contracting parties who prove tortious interference. They may award actual or compensatory damages if you can prove the amount of harm actually suffered. Courts may award expectation damages or the amount of lost profits or foregone business opportunities and expected profits had the tortious interference not occurred. You may also receive punitive damages if you can prove emotional distress. Courts may order an injunction or award you equitable relief by ordering the losing party to refrain from further attempts to contact your customers or employees.


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