Tortious Interference: Protecting Your Business From Competitor Sabotage

In today’s competitive marketplace, aggressive tactics are quite common. However, if a competitor’s conduct crosses the line from legitimate competition to unlawful sabotage, it can cause your business significant harm. Here, the concept of tortious interference takes precedence. It offers businesses a pathway to file lawsuits and seek compensation for damages caused by illegal conduct.

Two types of tortious interference 

• Tortious interference with a contract – Occurs when a third party deliberately induces the other party to breach an existing contract. For example, if a competitor convinces an important supplier to break an exclusive supply agreement, that could be grounds for a tortious interference claim.

• Tortious interference with prospective economic advantage – This kind of tortious interference doesn’t require there to be an existing contract. Instead, it focuses on disrupting a potential business relationship or opportunity that was “reasonably likely” to occur. For example, imagine that you’re close to finalizing a major deal with a new client, and a competitor spreads false information about your business, causing the client to back out. This could be considered tortious interference with a prospective economic advantage.

Elements of a tortious interference claim 

To establish a tortious interference claim, you must prove several elements. These generally include:

• The existence of a valid contract or business relationship – You either need a binding contract in place or a reasonable expectation of some economic benefit from a business relationship.

• Defendant’s knowledge – You have to establish that the interfering party knew about your contract or prospective relationship.

• Intentional interference – You must prove that the defendant intentionally acted to disrupt the contract or relationship.

• Lack of justification – In a case involving a contract, the interference must be without justification. Legitimate business competition, like offering a better deal, is not considered tortious interference.

• Acting with intent to harm – For prospective advantage cases (cases that do not involve a contract), you must prove that the defendant acted solely to harm the plaintiff. This can include fraud, defamation, and more.

• Causation – You must prove that the defendant’s actions directly caused the breach of contract or disruption to a prospective relationship.

• Damages – You must have suffered some form of economic harm as a direct result of the tortious interference.

Differentiating between fair competition and tortious interference 

Fair competition, such as offering better prices, is considered the bedrock of a healthy marketplace. However, if a competitor employs the following tactics, it could be considered illegal:

• Making defamatory comments or spreading false information about your business
• Threatening your clients or partners to breach their contracts with you
• Inducing employees to violate non-compete agreements or steal trade secrets

Such actions can constitute tortious interference. Courts will examine the defendant’s motive, their methods of interference, and whether a legitimate justification for the conduct can be found.

Talk to a Dayton, OH, Business Torts Attorney Today 

Kohl & Cook Law Firm, LLC, represents the interests of businesses that have become the victims of tortious interference. Call our Columbus consumer lawyer today to schedule an appointment, and we can begin discussing your next steps right away.