home site map
 
CUTLER P.C.
Counsellors At Law
Email: info@cutlerlegal.com

Boston Office:
77 Franklin Street
Boston, MA 02110
Phone: (617) 338-8243
Fax: (617) 695-2778
California Office:
200 East Garvey Avenue
Suite 202
Monterey Park, CA 91755
Affiliated Office:
Shanghai Hu Gong Law Offices
Hong Kong Law Firms
43 Shanghai Friendship Road, Room 2
Lane 302 PC: 20,900
Phone: (021) 56606925
Fax: (021) 56602173
Post: 201900
E-mail: luanguoqing@gmail.com

8/14/07  Wrongful Interference with Contract and Business Relations

By Timothy K. Cutler

A somewhat misunderstood legal claim against another arising from highly aggressive, competitive business practices and dealings is the claim of wrongful interference with an existing contractual or business relationship. This is a tort claim and routinely asserted by those who feel that a competitor has engaged in some form of illegal business practice.

Such claims arise in various commercial, contexts, such as when a competitor lures away a client or when a competitor hires an ex-employee who is under a non-compete agreement.

The reason for the suggestion that a claim of wrongful interference with contract and business relations is misunderstood is because it is more difficult to prove than many businessmen and lawyers realize. Simply interfering with an existing contract or business relationship is not enough to prove such a claim. If it were, then almost any competitive business practice could be construed as illegal.

In order to succeed on such a claim, there must be a showing of an improper motive or means. Improper means or motive is determined on a case by case basis - the court will look at the circumstances surrounding the alleged improper business dealings. The court will look to see if the alleged wrongdoer had knowledge of the interference and intended to wrongfully interfere. The court will not permit the wrongdoer to 'bury-his-head" or otherwise intentionally avoid knowledge. The court will look to see if the wrongdoer had a legitimate business objective, or whether the alleged wrongdoer intended to cause harm or was acting out of spite. Alternatively, if the alleged wrongdoer uses improper means, such as breaching a fiduciary duty or improperly using the injured party's trade secretes or confidential information, then s/he could be subject to a claim of wrongful interference.

Simple negligence, lack of sound judgment, ill-conceived decisions or unfair business practices in themselves are not enough to support a claim for wrongful interference. As a general rule, aggressive, competitive behavior is insufficient to sustain a claim. There must be an improper motive or means behind the actions and the alleged wrongdoer must have knowledge of the existence of the contract or business relationship.

In conclusion, just because a competitor has been highly aggressive and you or your business have lost opportunities as a result of the aggressive acts of your competitor, does not give rise to a claim of wrongful interference with contractual or business relations. There must be knowledge of the interference, along with a wrongful motive or means behind the interference.


© Copyright 2004. Cutler P.C. Terms of Use Support