Legal Definitions - tortious interference

Tortious interference occurs when one party intentionally and improperly disrupts a valid contract or an established business relationship between two other parties, causing financial harm to one of them. It is a civil wrong that allows the harmed party to seek compensation for the damages caused by the interference.

Here are some examples:

• Imagine a small software development company, Tech Solutions, has a signed contract with a major client, Global Corp, to develop a critical new application. A rival company, Innovate Systems, learns about this contract. Desperate to win Global Corp's business, Innovate Systems contacts Tech Solutions' lead developer on the project and offers them a significantly higher salary and a signing bonus if they immediately leave Tech Solutions and join Innovate Systems, knowing this would cripple Tech Solutions' ability to fulfill the Global Corp contract. The lead developer accepts, causing Tech Solutions to miss deadlines and ultimately lose the Global Corp contract.

  This illustrates tortious interference because Innovate Systems intentionally interfered with the existing contract between Tech Solutions and Global Corp by poaching a key employee with the specific aim of disrupting that contract, leading to financial harm for Tech Solutions.

• Consider Green Energy Inc., which is in final negotiations to secure a multi-million dollar investment from a venture capital firm, Capital Growth Partners, for a new renewable energy project. A competitor, Power Dynamics LLC, learns of these negotiations. To sabotage Green Energy Inc.'s funding, Power Dynamics LLC anonymously sends Capital Growth Partners a fabricated report containing false negative information about Green Energy Inc.'s financial stability and project viability. As a result, Capital Growth Partners withdraws its investment offer, causing Green Energy Inc. to lose out on crucial funding for its project.

  This demonstrates tortious interference because Power Dynamics LLC intentionally and improperly interfered with Green Energy Inc.'s prospective business relationship with Capital Growth Partners by spreading false information, which directly led to the loss of the investment opportunity and significant financial harm for Green Energy Inc.

• Suppose Artisan Bakes, a popular local bakery, has an exclusive contract with Premium Flour Mills for a unique, high-quality flour essential for their signature bread. A larger, national bakery chain, Mega Loaf, wants to replicate Artisan Bakes' success and discovers their exclusive flour source. Mega Loaf then approaches Premium Flour Mills and offers them a much larger, more lucrative contract if they breach their exclusive agreement with Artisan Bakes and supply Mega Loaf instead. Premium Flour Mills, enticed by the offer, terminates its contract with Artisan Bakes, leaving Artisan Bakes unable to produce its signature product and facing significant losses.

  This is an example of tortious interference because Mega Loaf intentionally interfered with the existing exclusive supply contract between Artisan Bakes and Premium Flour Mills by inducing Premium Flour Mills to breach that contract, directly causing financial damage to Artisan Bakes.