What Is “tortious” Interference With A Prospective Economic Relationship? – Contracts and Commercial Law

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“Tortious” interference with a prospective economic relationship occurs when a party improperly prevents two others from entering a contract or otherwise doing business together. The claim has four elements. A plaintiff must show that: (1) the defendant interfered with the plaintiff’s prospective economic relationship; (2) the plaintiff would have entered that economic relationship in the absence of the defendant’s conduct; (3) the plaintiff was injured; and (4) the defendant acted with the sole purpose of harming the plaintiff or used “improper means.” In most states, the phrase “improper means” generally refers to conduct that is independently unlawful.

Proving tortious interference with a prospective economic relationship is often more difficult than proving tortious interference with contract because courts are more protective of existing contracts than potential opportunities. Where a plaintiff can show a valid contract, the interference need not be independently unlawful to be actionable. Prospective relationships, in contrast, can fail for many legitimate reasons, such as economic competition. Courts thus set a high bar before they will impose liability on third parties for a prospective relationship’s failure.

A party that proves a claim for tortious interference with a prospective economic relationship may recover as damages the profits it expected from the lost relationship. Where the defendant secures the relationship the plaintiff lost, the plaintiff may recover defendant’s ill-gotten gains, either on the theory that the defendant should not profit from its wrongdoing or that the defendant’s gains are a measure of the plaintiff’s losses. Punitive damages may also be available for particularly outrageous conduct.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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