Wrongful $($tortious$)$ interference with a contract $($contractual relationship$)$ is more than the usual, healthy competition we commonly experience between businesses in the marketplace. In general, various companies legally compete for business before the buyer selects one and the two parties sign a contract. In the case of wrongful interference with a contract, a party outside of the contract $($the defendant$)$ works to break up a valid contract between two parties after the contract is signed.

In such a lawsuit, the plaintiff must prove these required elements:

A valid contract exists between the plaintiff and a third party;

the defendant knows the contract exists;

the defendant intentionally persuades the third party to breach the contract; and

the plaintiff experiences injury or damages as a result of the defendant$$s actions.

An example of interference with a contract happens when Jax, an accounting consultant, is helping Eliyah, the owner of a pool distributorship, structure the purchase of another business. Part of the consulting project is to review financial records of the business. During the review, Jax discovers how much Eliyah pays his current accounting firm for his audits. Jax persuades Eliyah to breach his multi$-$year contract with his current auditor by criticizing the quality of the work and also offering to do the work for a lower price. Jax has interfered with that contract if Eliyah decides to breach the contract.

The second category of business torts, wrongful $($tortious$)$ interference with a prospective advantage, is similar to interference with a contractual relationship, but in this case no contract has been formed between the parties. The defendant did not interfere with a contract, but instead employed some illegal or predatory actions to interfere with the development of a business relationship.

For example, Bob and Harold are two roofing subcontractors in the same city. Bob knows that Harold has been developing a relationship with several of the contractors in the area. Bob spreads false rumors about Harold being in poor health and having financial problems to drive business from Harold$$s business to his own. Several contractors decide to give their business to Bob. Harold could sue Bob for wrongful interference with a business relationship $($tortious interference with a prospective advantage$).$

In interference lawsuits, defendants can use the defense of justification, which involves showing the interference was justified or permissible. To establish justification, the defendant can use one of these factors to prove the actions were not illegal interference:

The defendant was protecting his or her own existing economic interest;

the defendant was acting in the public interest; or

the contract could be terminated by either party at any time, so the plaintiff was aware the agreement and business could end at any time.