Tortious interference
Encyclopedia
Tortious interference, also known as intentional interference with contractual relations, in the common law
of tort
, occurs when a person intentionally damages the plaintiff
's contract
ual or other business relationships. This tort is broadly divided into two categories, one specific to contractual relationships (irrespective of whether they involve business), and the other specific to business relationships or activities (irrespective of whether they involve a contract).
, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff
from receiving the performance promised. The classic example of this tort occurs when one party induces another party to breach a contract with a third party, in circumstances where the first party has no privilege to act as it does and acts with knowledge of the existence of the contract. Such conduct is termed tortious inducement of breach of contract.
Tortious interference with business relationships occurs where the tortfeasor acts to prevent the plaintiff
from successfully establishing or maintaining business relationships. This tort may occur when a first party's conduct intentionally causes a second party not to enter into a business relationship with a third party that otherwise would probably have occurred. Such conduct is termed tortious interference with prospective business relations, expectations, or advantage or with prospective economic advantage.
In a similar case, Tarleton v. McGawley, 170 Eng. Rep. 153 (K.B. 1793), the defendant shot from its ship Othello off the coast of Africa upon natives while “contriving and maliciously intending to hinder and deter the natives from trading with” plaintiff’s rival trading ship Bannister. This action caused the natives (plaintiff’s prospective customers) to flee the scene, depriving the plaintiff of their potential business. The King's Bench court held the conduct actionable. The defendant claimed, by way of justification, that the local native ruler had given it an exclusive franchise to trade with his subjects, but the court rejected this defense.
The tort was described in the case of Keeble v Hickeringill, (1707) 103 Eng. Rep. 1127
, styled as a "trespass on the case
". In that case, the defendant had used a shotgun to drive ducks away from a pond that the plaintiff had built for the purpose of capturing ducks. Thus, unlike the foregoing cases, here the actionable conduct was not directly driving the prospective customers away, but rather eliminating the subject matter of the prospective business. Although the ducks had not yet been captured, the Justice Holt
wrote for the court that "where a violent or malicious act is done to a man's occupation, profession, or way of getting a livelihood, there an action lies in all cases." The court noted that the defendant would have the right to draw away ducks to a pond of his own, raising as a comparison a 1410 case in which the court deemed that no cause of action would lie where a schoolmaster opened a new school that drew students away from an old school.
The first element may, in employment-at-will jurisdictions, be held fulfilled in regards to a previously unterminated employer/employee relationship.
Equitable remedies may include injunctive relief in the form of a negative injunction that would be used to prevent the wrongdoer from benefiting from any contractual relationship that may arise out of the interference, i.e., the performance of a singer who was originally contracted with the plaintiff to perform at the same time.
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
of tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
, occurs when a person intentionally damages the plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
's contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
ual or other business relationships. This tort is broadly divided into two categories, one specific to contractual relationships (irrespective of whether they involve business), and the other specific to business relationships or activities (irrespective of whether they involve a contract).
Description
Tortious interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiffPlaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
from receiving the performance promised. The classic example of this tort occurs when one party induces another party to breach a contract with a third party, in circumstances where the first party has no privilege to act as it does and acts with knowledge of the existence of the contract. Such conduct is termed tortious inducement of breach of contract.
Tortious interference with business relationships occurs where the tortfeasor acts to prevent the plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
from successfully establishing or maintaining business relationships. This tort may occur when a first party's conduct intentionally causes a second party not to enter into a business relationship with a third party that otherwise would probably have occurred. Such conduct is termed tortious interference with prospective business relations, expectations, or advantage or with prospective economic advantage.
Case Law
An early, perhaps the earliest, instance of recognition of this tort occurred in Garret v. Taylor, 79 Eng. Rep. 485 (K.B. 1620). In that case, the defendant drove customers away from the plaintiff’s quarry by threatening them with mayhem and also threatening to “vex [them] with suits.” The King's Bench court said that “the defendant threatened violence to the extent of committing an assault upon ... customers of the plaintiff ... whereupon ‘they all desisted from buying.’’ The court therefore upheld a judgment for the plaintiff.In a similar case, Tarleton v. McGawley, 170 Eng. Rep. 153 (K.B. 1793), the defendant shot from its ship Othello off the coast of Africa upon natives while “contriving and maliciously intending to hinder and deter the natives from trading with” plaintiff’s rival trading ship Bannister. This action caused the natives (plaintiff’s prospective customers) to flee the scene, depriving the plaintiff of their potential business. The King's Bench court held the conduct actionable. The defendant claimed, by way of justification, that the local native ruler had given it an exclusive franchise to trade with his subjects, but the court rejected this defense.
The tort was described in the case of Keeble v Hickeringill, (1707) 103 Eng. Rep. 1127
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
, styled as a "trespass on the case
Trespass on the case
The Writs of Trespass and Trespass on the Case are the two catchall torts from English Common Law, the former involving trespass against person, the latter involving trespass against anything else which may be actionable...
". In that case, the defendant had used a shotgun to drive ducks away from a pond that the plaintiff had built for the purpose of capturing ducks. Thus, unlike the foregoing cases, here the actionable conduct was not directly driving the prospective customers away, but rather eliminating the subject matter of the prospective business. Although the ducks had not yet been captured, the Justice Holt
John Holt (judge)
Sir John Holt was an English lawyer and served as Lord Chief Justice of England from 17 April 1689 to his death.-Biography:...
wrote for the court that "where a violent or malicious act is done to a man's occupation, profession, or way of getting a livelihood, there an action lies in all cases." The court noted that the defendant would have the right to draw away ducks to a pond of his own, raising as a comparison a 1410 case in which the court deemed that no cause of action would lie where a schoolmaster opened a new school that drew students away from an old school.
Typical examples
- Tortious interference of business.- When false claims and accusations are made against a business or an individual's reputation in order to drive business away.
- Tortious interference of contract.- When an individual uses "tort" (a wrongful act) to come in between two parties mutual contract.
Elements
Although the specific elements required to prove a claim of tortious interference vary from one jurisdiction to another, they typically include the following:- The existence of a contractual relationship or beneficial business relationship between two parties.
- Knowledge of that relationship by a third party.
- Intent of the third party to induce a party to the relationship to breach the relationship.
- Lack of any privilege on the part of the third party to induce such a breach.
- The contractual relationship is breached.
- Damage to the party against whom the breach occurs.
The first element may, in employment-at-will jurisdictions, be held fulfilled in regards to a previously unterminated employer/employee relationship.
Damages
Typical legal remedies for tortious interference include economic losses if they can be proven with certainty and mental distress. Additionally punitive damages may be awarded if malice on the part of the wrongdoer can be established.Equitable remedies may include injunctive relief in the form of a negative injunction that would be used to prevent the wrongdoer from benefiting from any contractual relationship that may arise out of the interference, i.e., the performance of a singer who was originally contracted with the plaintiff to perform at the same time.
Source
- Jesse DukeminierJesse DukeminierJesse Dukeminier was a professor of law for 40 years at the University of California, Los Angeles, and authored or co-authored a significant number of articles and textbooks in the areas of property law, wills, trusts, and estates...
and James E. KrierJames E. KrierJames E. Krier is the Earl Warren DeLano Professor of Law at the University of Michigan Law School and the father of performer Andrew W.K. His teaching and research interests are primarily in the fields of property, contracts, and law and economics, and he teaches or has taught courses on...
, Property, Fifth Edition, Aspen Law & Business (New York, 2002), pp. 31-36. ISBN 0-7355-2437-8 - John L. Diamond and Lawrence C. Levine and M. Stuart Madden, Understanding Torts Second Edition, Lexis Nexis (New York, 2000), p. 413. ISBN 0-8205-5219-4