Third-Party Company’s Interference with Business Relationships
Companies enter into contracts with other companies to establish expectations that each party should uphold while working together. Should one of these companies renege on the specifics outlined in the contract, they can be in breach of contract. But what if a third-party who is not a part of the contractual agreement interferes with the business relationship of the contracted companies? The company that was economically harmed as a result of this interference may be able to pursue legal action under a common law tort known as corporate interference.
Two Types of Corporate Interference
Two types of corporate interference exist: interference with contractual relations and interference with prospective economic advantage.
Interference with contractual relations – In this type of interference, a third-party company can be held liable if it interfered with two companies that had a business contract in place with each other. To claim that a company interfered with a contractual relationship, the company that was harmed will need to prove that:
- The two companies had a contract
- The third-party company knew the contract existed
- The third-party knew their acts would cause harm
- The interference caused economic harm
Interference with prospective economic advantage – Sometimes two companies that are planning to establish a business relationship with each other do not have a formal written contract. For example, they may be in negotiations to establish the relationship. When a third-party company disrupts these relationships and causes economic damage, they wronged one of the companies. It lies on the wronged company to prove that:
- The two companies have a business relationship
- The third-party company knew this relationship existed
- The third-party intended to wrong the company
- The interference caused economic harm
- There is a connection between the third-party’s actions and the economic harm
Each state has its own tort laws on corporate interference. California, for example, recognizes two types of interference with prospective economic advantage: intentional and negligent. Intentional interference occurs when the third-party knew they were disrupting a business relationship. Negligent interference occurs when a third-party company failed to uphold its duty to not cause harm to this relationship.
Oftentimes it may be difficult to prove a third-party company knowingly disrupted your business relationships. They can argue that they did not know a relationship existed between the two companies and did not intentionally harm one of the companies. Because much evidence is needed and a thorough understanding of tort law is necessary, consulting with a commercial litigation attorney is recommended.
Our Commercial Litigation Attorneys Can Advocate for Your Business Rights
If a third-party company interfered with your company’s contractual or business relationship with another company, you may be able to pursue a corporate interference claim against the third-party company. The third-party company should be held liable for economic harm caused to your company.
Pursuing corporate interference claims can be difficult because the burden of proof lies on your company to prove the third-party company knew about and intentionally or negligently caused harm to your company. Our skilled Inland Empire commercial litigation attorneys at McCune Wright Arevalo, LLP can help your business recover compensation for losses incurred. With a track record of success in handling complex cases, our commercial litigation lawyers have the experience needed to obtain justice for your company.
Call us at (909) 345-8110 to schedule your free consultation. Or contact us online and one of our staff will get back to you as soon as possible.