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What is tortious interference with contracts?

On Behalf of | Mar 18, 2021 | Business Law

When you have a contract, but a third party interferes and causes the other side to breach it, it could be “tortious interference.”

A classic example is this. You’ve agreed to buy a local artist’s painting for $500. They agreed to the price and you’re ready to pick up the art. Then, an art dealer hears about the sale, contacts the artist and offers a showing that could drive up the price significantly. They want the painting you are buying to be included in the show. Therefore, the artist refuses to sell you the painting, even though they are contractually obligated to do so.

This might be tortious interference by the art dealer. Whether you can make a claim depends on whether you can prove the art dealer intentionally interfered to cause economic harm.

In the law, the word “tort” is parallel to the word “crime.” A crime is a criminal wrong; a tort is a civil or economic wrong. Your case against the art dealer depends on whether what they did was a tort or not.

In other words, for you to prove tortious interference, you will have to show that the art dealer acted wrongfully or anti-competitively, rather than merely negligently or as a strong competitor would.

Simply offering to put the painting into the art show is probably not enough. Here are the elements of a tortious interference claim:

  • There is a valid contract or economic expectancy between you and another party
  • A third party knows about the contract or expectancy
  • The third party intends to interfere with the contract or expectancy
  • The third party actually interferes
  • The interference is improper
  • You suffer damage

In the case of the painting, let’s assume you had a valid contract to buy the painting from the artist. The art dealer heard about that sale and took action to interfere with it. The big question here is whether the art dealer’s interference was improper.

When determining whether the interference was improper, courts consider a variety of factors, such as the dealer’s motivations and interests, your interests, the artist’s interests and social policy.

Before you would file a tortious interference claim against the art dealer, you would need to be able to show that the interference was objectively improper.

If, for example, the dealer simply liked the painting and thought it would be good for the show, the interference with the contract might be relatively innocent.

If, on the other hand, the dealer had an existing, acrimonious relationship with you and the interference was done in revenge? That could indeed be tortious interference.

If a third party has interfered with your contract, discuss your situation with an experienced business attorney.