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What is the Business Tort Known as Interference With Contractual Relations?

Tortious or intentional interference with contractual relations can occur where the defendant convinces one of the parties to a contract to breach the contract with the plaintiff.   Tortious interference may also occur where the defendant disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised under the contract.   

The tort of interference with contractual relations permits a plaintiff to recover damages based upon a claim that a defendant interfered with the plaintiff's contractual relations. The elements of an intentional interference with contractual relations claim are as follows:

• a valid contract between plaintiff and a third party;
• defendant's knowledge of the contract;
• defendant's intentional acts designed to induce a breach or disruption of the contractual relationship;
• actual breach or disruption of the contractual relationship; and
• resulting damages

To be considered tortious, a defendant's actions must substantially exceed fair competition and free expression, such as persuading a bank not to lend a competitor any more money.