Tortious Interference with Contract

Tortious interference with existing contractual relations is the intentional and improper interference between two contracting parties. This is a tort claim that entitles a party whose contract with a third party has been terminated because of the wrongful interference by the defendant to bring a claim for the resulting damages. But not every contract that is terminated gives rise to a claim. The interference has to be “wrongful” or “improper” in order for it to be actionable. Good old American competition is not wrongful. Thus, it is not tortious interference for your business competitor to solicit your customer to end its relationship with your company on the basis of better pricing, quality or service. On the other hand, it is wrongful for the same business competitor to solicit your customer to terminate its relationship with you on the basis of knowingly false claims about your company. It does not matter that the customer may have the right to terminate the contract without breaching it. The focus is on the loss of the benefit of the contract based on improper behavior. Significantly, the damages available are tort damages, which include the possibility of punitive damages in addition to the losses flowing from the loss of the contract itself.