Running a business often comes with the expectation that other similarly situated businesses will compete for the same clients or consumers. Business owners take various actions to advertise and provide services that put their businesses above those of their competitors, in order to get more clients. However, there is a limit to the kind of actions that business owners can take in order to grab clients from their competitors.
When a person or company takes actions that interfere with another’s business opportunity, the business that suffers the loss can sue for tortious interference of business opportunity. Tortious interference usually occurs when a person convinces another person or entity to abandon an existing contract or duty to another business.
To prove tortious interference, a plaintiff does not have to prove that he lost an existing contract as a result of the interference by the defendant. It is enough to prove that there was a prospective contract. The plaintiff also has to show that: (1) there was a business relationship between him and the lost client; (2) the defendant knew about the business relationship; (3) the defendant intentionally and unjustifiably interfered with the business relationship; and, (4) the plaintiff suffered damages as a result of the breakdown in the relationship between the plaintiff and the client.
The damages suffered as a result of the tortious interference include the lost profits from the loss of the contract but may include other direct losses that can be attributed to the same interference. In order to best determine how much to claim in damages, it is important for the business to seek guidance from an experienced attorney.
Not every action that is taken by a business competitor qualifies as tortious interference. For example, if a business offers better rates or discounts than a competitor, it is not likely to qualify as interference. However, if a person, knowing that a client has an existing business relationship with a business, intentionally provides false information about the business to the client, this is more likely to qualify as tortious interference if the plaintiff can prove the rest of the elements.
It is important to note that the law requires the interfering party be a stranger to the contract. When the party accused of interfering with the business relationship is a part of the contractual relationship between the business and the client, has a financial interest in the contract, or a supervisory role in the administration of the contract, a claim for tortious interference cannot be sustained. This situation can arise for instance, where a regulatory government body takes actions against a business that damage the relationship between the business and its clients.
Contact us for Legal Assistance
If you have suffered losses because of another person interfering with your business relationships with your clients, you may have a way to stop the interference and keep your business from losing additional revenue. For more information on filing a tortious interference claim and other business disputes, contact an experienced business attorney at Vocelle & Berg, LLP, in Vero Beach, Florida for a free consultation.