Arthur R. Lehman, L.L.C.

Contractual interference as a business tort dispute

Despite their ability to prevent or clarify many business disputes, business contracts can also be the source of conflict at times. When one party interferes with another's business contract, a business tort dispute may come about and potentially hinder business operations, or the bottom line.

Business tort disputes can take a variety of forms, from false advertising to fraud to unfair competition. While many New York business owners and operators may be familiar with those issues, they are often less familiar with tortious interference with pre-contractual relations or with the contract itself. Generally, tortious interference involves a plaintiff's assertion that their contractual bond with a third party was interfered with by the defendant.

If this interference can be effectively demonstrated, the defendant can be held liable for damages. In cases of intentional interference, the plaintiff must show several different elements, including the existence of a legitimate contract, the defendant knowing about said contract and the defendant's actions being both improper and intentional. Finally, the plaintiff must also show that the actions of the defendant did indeed harm the plaintiff.

It is helpful to know that the burden of demonstrating the above four elements is on the plaintiff and not on the defendant to justify actions. Plaintiffs who suspect another entity's interference with contractual relations may want to get more information about the available options so that a sound business decision can be made. Getting more information can potentially help resolve a dispute through negotiations, and can protect the integrity of a contract in the courtroom.

Source: Cornell University Law School, "Intentional interference with contractual relations," accessed Dec. 7, 2014

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