Businesses compete with other businesses every day. However, there is a point where that competition goes too far. Massachusetts business and contract law recognizes that improperly and intentionally interfering with someone else's contract is unlawful and can lead to a lawsuit.
Whether you think that someone else has interfered with your contract or your business is being accused of interfering in one, the Massachusetts business and contract lawyers at the Katz Law Group can help.
How These Cases Arise
There are three players involved in allegations of intentional interference with contractual relations, also known as tortious interference with a contract:
- The party in the contract or business relationship that has suffered from the interference and who is now claiming that the interference was unlawful,
- The party in the contract that terminated it, and
- The third party, the defendant in the claim, whose influence terminated the contract.
There are lots of situations where intentional interference can happen, such as:
- Someone persuading a vendor to breach their contract with a small business
- A corporation convincing a competitor's consultant to leave and join the corporation
- A company coaxing someone to violate their non-compete agreement
Where the line is drawn between savvy business practices and unlawful interference in a contract is not always clear.
The Four Elements of a Tortious Interference Claim
The plaintiff, the party who suffered from the contract's termination and who is now bringing the claim, needs to prove four things in Massachusetts:
- They had a contract or a prospective business relationship with the other party,
- The defendant knowingly induced that other party to break the contract or relationship,
- The defendant's interference was improper in motive or means, and
- The plaintiff has suffered from the interference.
The first element is often clear, and the second generally relies on communication between the party that left the contract and the party that deliberately pulled them away from it. The fourth has to do with ascertaining the extent of the plaintiff's losses.
Most intentional interference cases hinge on the third element.
What Motives or Means are Improper?
Of course, getting someone to leave your competitor so they can become your client is not unlawful – it's good business. That is why Massachusetts law requires the contractual interference to be done with an improper motive or means.
Massachusetts courts have made it very clear that this is not satisfied whenever someone intentionally advises a party to a contract to break it or to avoid signing it in the first place. Instead, it requires conduct that has been described as “innately wrongful” or “predatory.” This often involves things like:
When the contract at issue is an employment contract, the aggrieved party has to prove that the interference was done with actual malice.
Unfair Trade Practice Claims Often Accompany These Cases
Cases that allege tortious interference in a contract often also include a claim of unfair trade practices under Chapter 93A of the Massachusetts Consumer Protection Laws. These can drastically increase the stakes of the case, whether you are the one filing a Chapter 93A complaint or receiving the demand letter.
Massachusetts Business and Contract Lawyers at the Katz Law Group
The business and contract lawyers at the Katz Law Group have four decades of experience handling these sensitive, but potentially very costly, legal issues. Contact them online or call their Central Massachusetts law office at (508) 480-8202.
