Arthur R. Lehman, L.L.C.

What is tortious interference with a contract?

The phrase "tortious interference with a contract" may sound like a mouthful to a business owner in New York City, but it is an important concept about which even small business owners in New York need to know.

Basically, it is unlawful for another business entity or person to attempt to break up, or interfere with, an existing contract by trying to cause one party to break its promises to the other party, that is, breach the agreement. New Yorkers should be aware that the scope of this tort is narrow, since the purpose is not to prevent perfectly lawful competition.

In order to prove a tortious interference claim, at least two people or businesses have to have a valid contract with each other, while the third party, the defendant, is not part of the agreement. The defendant has to actually know about the contract and, intentionally, set about to induce someone to breach the agreement. In other words, simply offering a service or goods at a better price is rarely going to be enough to get a business in trouble for tortious interference.

A person suing for tortious interference with a contract must also show the committed some overt act to disrupt the contract and the overt act was "improper," which can be thought of as something that isn't commonly accepted in the business world. As with all torts, the plaintiff must prove the interference caused damage.

While no New York business owner wants to be the victim of tortious interference with a contract, it is important that those businesses who do suspect their operations have been unlawfully hurt to understand that a tortious interference case is complicated and can be hard to prove. The experience of a seasoned business litigation attorney can prove to be of valuable assistance.

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