Legal Definitions - interference with a business relationship

The term "interference with a business relationship" refers to a specific type of civil wrong, more formally known as tortious interference with prospective economic advantage. It occurs when one party intentionally and improperly disrupts a *potential* business deal or relationship between two other parties, causing financial harm.

For a claim of interference with a business relationship to be successful, several key elements must generally be present:

• There was a reasonable expectation of a future business relationship or economic benefit. This is not necessarily an existing contract, but a strong likelihood of one.
• A third party knew about this potential relationship or opportunity.
• The third party intentionally acted to disrupt or prevent the relationship from forming.
• The disruption was achieved through improper means (e.g., fraud, threats, defamation, illegal acts) or for an improper purpose.
• The disruption caused actual financial harm or damages to the party whose relationship was interfered with.

Here are some examples to illustrate this concept:

• Example 1: Competitor Sabotage

  A small tech startup, Innovate Solutions, is in the final stages of negotiating a major licensing agreement with a large electronics manufacturer, Global Devices, for its groundbreaking new chip design. A rival company, Tech Titans, learns of the impending deal. To prevent Innovate Solutions from securing this lucrative contract, Tech Titans intentionally spreads false rumors to Global Devices' executives, claiming that Innovate Solutions' chip design has critical, unfixable flaws and that their company is on the verge of bankruptcy. Believing these fabricated stories, Global Devices withdraws its offer to Innovate Solutions.

  How this illustrates the term:Innovate Solutions had a reasonable expectation of a valuable business relationship with Global Devices. Tech Titans knew about this and intentionally interfered by using improper means (spreading false and defamatory information), which directly caused Innovate Solutions to lose the prospective contract and suffer financial harm.

• Example 2: Disgruntled Former Employee

  Ms. Chen, an experienced marketing consultant, is about to sign a significant contract to manage the entire advertising campaign for a new luxury hotel chain, Grand Stays. Her former employer, Mr. Davis, who was upset when Ms. Chen left his agency, contacts Grand Stays' CEO. Mr. Davis falsely claims that Ms. Chen has a history of missing deadlines, mismanaging client budgets, and has even been accused of plagiarism in previous roles, despite knowing these accusations are untrue. Due to Mr. Davis's malicious and unfounded statements, Grand Stays decides not to hire Ms. Chen.

  How this illustrates the term: Ms. Chen had a strong expectation of a business relationship with Grand Stays. Mr. Davis knew this and intentionally interfered by making false and damaging statements (defamation), causing Ms. Chen to lose the prospective contract and the associated income.

• Example 3: Real Estate Deal Disruption

  A commercial developer, Urban Sprawl Inc., is in advanced negotiations to purchase a prime downtown property from its elderly owner, Mr. Henderson, for a new office complex. Another developer, Cityscape Holdings, also desires the property. Knowing that Mr. Henderson is somewhat frail and easily confused by complex legal documents, Cityscape Holdings approaches him directly. They falsely tell Mr. Henderson that Urban Sprawl Inc.'s offer is full of hidden clauses that will cost him extra money and that their own, slightly lower offer is "much simpler and safer," even though Urban Sprawl Inc.'s offer was straightforward and more beneficial. Convinced by Cityscape Holdings' deceptive tactics, Mr. Henderson breaks off negotiations with Urban Sprawl Inc.

  How this illustrates the term:Urban Sprawl Inc. had a reasonable expectation of purchasing the property from Mr. Henderson. Cityscape Holdings knew about this and intentionally interfered by using improper means (deception and misrepresentation, exploiting Mr. Henderson's vulnerability), causing Urban Sprawl Inc. to lose the opportunity to acquire the property.