Has a competitor interfered with your clients and cost you money? If so, you could be entitled to bring a claim of tortious interference against that business. Here’s what you need to know about the process—and how an experienced business litigation attorney can help you assert your rights.
Understanding Tortious Interference
When a business interferes with another company’s clients, that company may have a tortious interference with contractual relationships or prospective business advantage. These claims give businesses the right to seek financial compensation when another party intentionally interferes with the business’s relationships with existing and prospective clients or customers.
A tortious interference with contractual relations claim may arise when a third party causes a client/customer to terminate or breach their contract with a business when the client/customer otherwise would not have terminated or breached the contract but for the third party’s encouragement or efforts. As an example of tortious interference with contractual relationships, suppose a business knowingly provides another company’s customer with false information about the company that causes the customer to terminate or breach their contract with the company. The company may have a tortious interference claim against the other business in that case.
A tortious interference with prospective business advantage claim arises when a third party intentionally or knowingly disrupts a prospective business relationship between a customer and another company.
Elements of a Tortious Interference Claim
A business that believes another company has tortiously interfered with its relationships with current or prospective customers must prove several elements to establish a tortious interference claim. These elements include:
- A valid business relationship or contract: A company asserting a tortious interference claim must provide evidence to prove the existence of a contractual relationship with the customer/client or a reasonable expectation of a future business relationship.
- Intentional interference: A plaintiff in a tortious interference claim must prove that the defendant business acted knowingly or intentionally to disrupt the plaintiff’s relationship with a current or prospective customer.
- Improper action: The plaintiff must also show that the defendant engaged in some improper action to interfere with the plaintiff’s customer relationship, such as coercing or defrauding the customer into terminating or breaching a contract or defaming the plaintiff. Legitimate competitive activity, such as offering better prices for goods or services, cannot rise to the level of tortious interference.
- Damages: A plaintiff must also present evidence to document concrete financial losses caused by the defendant’s tortious interference, such as lost sales/profits, increased customer acquisition/retention costs, or damaged goodwill.
Examples of Tortious Interference
Examples of behaviors that may constitute tortious interference include:
- A competing business intentionally spreads false information about a company to steal its clients.
- A company bribes a supplier with kickbacks or other financial incentives to breach an exclusive agreement.
- A company hires a business’s employee subject to a non-solicitation agreement to poach other employees or customers from the business.
Legal Remedies for Tortious Interference
A company that has become the victim of tortious interference may pursue various remedies through a legal claim, such as:
- Financial compensation: A company that has lost clients because of another party’s tortious interference can pursue compensation for lost profits, increased expenses to retain/replace customers, or lost goodwill.
- Injunctive relief: Courts may order parties that have engaged in tortious interference to cease their interfering conduct or take proactive steps to remedy the interference, such as removing false or defamatory statements from the internet.
- Punitive damages: In rare cases involving egregious conduct that shocks the conscience, a jury may award punitive damages to punish the tortfeasor for their behavior and deter others from engaging in similar conduct.
Contact Our Firm Today to Protect Your Rights and Interests
If your company has lost customers due to another business’s tortious interference, an experienced Manhattan litigation attorney can help you pursue a claim for compensation for your financial losses. Contact Levy Goldenberg LLP today for a confidential consultation to discuss your company’s legal options.
