Contracts are essential to the success and smooth operation of any enterprise. Third party interference in a contract from uninvolved parties can cause, among other problems, economic damages. In business law, tortious interference occurs when a third party knowingly acts in a manner to cause a breach in a contractual agreement.
How to Prove Tortious Interference
In New York State, to prove a case of tortious interference with a contract, the plaintiff (the suing party) must show all of the following:
- A valid contract exists
- The defendant (the third party interfering with the contract) has knowledge of that contract
- The defendant’s intentional and improper procuring of a breach
- Damages to the plaintiff
An Example of Tortious Interference
An example of tortious interference is as follows: A contract is entered into between a painter and homeowner to paint on a certain date and time. A third person, knowing the painter is contracted to paint for someone else and desiring to cause a breach in the original agreement, hires that same painter to work on that same day and time. If the contract is breached and the original homeowner can show damages, they may have a case for tortious interference of a contract.
Despite the financial detriment these disputes can cause, tortious interference is a business law matter, not a criminal one. It is not considered a contractual dispute since those only pertain to the legal rights of the two parties who have entered into the agreement.
Types of Damages
A plaintiff in a winning case could be awarded both compensatory and punitive damages. Compensatory damages reimburse the person for the money they lost due to the defendant's actions. Punitive damages serve as punishment to the defendant for their interference.
In some cases, a plaintiff could recoup hypothetical future losses based on what they would have received had the defendant not intervened. Every case is different and will have different amounts and types of damages.
If you think you might be a victim of tortious interference, consult a business law attorney at the Law Office of Dana Stricker, PLLC. With over 30 years of experience, Attorney Stricker serves the Bronx, all counties in New York City, Westchester County, and the surrounding areas. She handles conflicts regarding employment, business agreements, partnership agreements, non-disclosures, non-competition agreements, contracts, and litigation related to these issues. Call (914) 588-0651 to schedule a consultation, or visit her website to learn more about her work with businesses.