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Can I Sue if Another Business Interferes with My Contract?

The Spence Law Firm Feb. 12, 2024

Orlando Tortious Interference With Contract Attorney

In a tortious interference with contract case, our Orlando attorneys represent business clients involved in “deals gone bad.” Tortious interference with contract is a hybrid claim, combining elements of contract law and elements of tort law. This claim requires that the plaintiff prove:

  1. There is a contract;

  2. The defendant knew the contract existed;

  3. The defendants intentionally and improperly interfered with the contract; and  

  4. The plaintiff incurred losses due to the defendant’s actions.

The defendant in a tortious interference claim cannot be a party to the contract, they must be a third party or “stranger to the contract” that interferes with a contract between other parties. The stranger’s unjustified interference caused the original contracting parties to breach the original contract.

Tortious interference with contract got its start in an English case called Lumley v Gye, 118 Eng. Rep. 749 (K.B. 1853). In the Lumley case, Ms. Wagner, a singer, entered into a contract with Lumley’s theatre, in which she agreed to perform for three months, for a certain sum of money. The contract stated that Ms. Wagner could only sing at Lumley’s theatre and could not sing or perform anywhere else in the area during the term. A competing theatre owner learned about Ms. Wagner’s agreement, and approached her with a more lucrative deal, offering her more money and better terms. Ms. Wagner accepted the new contract and terminated the contract with Lumley’s theatre so she could perform for Lumley’s competitor. The court held that the competitor had unfairly interfered with the exclusive contract between Lumley and awarded Lumley the damages incurred. Since the Lumley case, courts have applied this tortious interference with contract principle to many different business situations.

Tortious Interference as Unfair Competition

Many claims for tortious interference with contract are between competing businesses, and are based on facts that allege a form of unfair competition. For example, one business induces the customers of a competing business to breach their contract and switch businesses. A competing business can make false statements about another business with the intent of luring away customers or vendors, or by improperly hiring away a competing businesses’ key management personnel.

Damages for Tortious Interference With Contract

Damages for a claim for tortious interference with contract include all damages proximately caused by the defendant. The typical limitation on contract damages, they must be foreseeable at the time of the breach, does not apply in a tortious interference with contract action. Moreover, in some cases, punitive damages are recoverable, which are typically not available under contract law.

Defenses to Tortious Interference With Contract Action

There are several defenses applicable to actions for tortious interference with contract. Privilege is one such defense, such as the privilege of fair competition. All businesses are entitled to compete for customers, to compete for employees, and to attempt to persuade customers and employees to join their business instead of their competitors. If a business destroys a competitor by luring away customers and employees, it is only subject to a lawsuit if the business accomplished the destruction through unfair methods of competition. If the businesses competed fairly and the other business failed, then nothing can be done in the courts. A defendant could also raise the defense that they or their privies are a party to the contract and thus, the claim fails.

Consult With an Experienced Orlando Tortious Interference With Contract Attorney

If you have a problem with a third party meddler interfering in your contract, or you have been accused of tortious interference, then you should consult with an experienced Orlando tortious interference with contract attorney at The Spence Law Firm.