A contract is a bargained-for exchange in which both parties are entitled to something such as money, services, or products. When a party to a contract does not honor the agreement, you may be able to recover for breach of contract. But, what happens when a third party infers with a contract? The appropriate claim is to sue for tortious interference with contract.
What is Tortious Interference?
Tortious interference balances healthy economic competition with the protection of existing or reasonably certain potential economic relationships but allowing claims against third parties which intentionally interfere with the contracts of business of others. Tortious interference became a recognized cause of action in Virginia in 1985. The claim is only allowable as to third parties to the relevant contract or business expectancy. Therefore, if the individual who is interfering with the contract is one of the parties to the contract, the plaintiff would likely need to bring a claim for breach of contract – not tortious interference.
An example of tortious interference is if someone blackmailed another person into breaking a contract or someone refusing to provide something that is needed by another person in order for that person to uphold a separate contractual agreement, when the third party knows of the other contract and need. Tortious interference can also include threats or influence.
Elements of Tortious Interference
Tortious interference has four elements as stated by Virginia law. These elements are:
Existence of a valid contractual relationship or business expectancy.
Knowledge of such contract or expectancy by the person or entity committing the interference;
This intentional interference causes a breach or termination in the relationship of expectancy; and
This results in damages to the party whose relationship/expectancy has been upset.
Fault of a Third Party Required
According to the 1985 Virginia Supreme Court case, Chaves v. Johnson, “One who intentionally and improperly interferes with the performance of a contract…between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.”
Ultimately an action for tortious interference is another potential claim if there was third party interference in the performance of contractual obligations.
Surovell Isaacs & Levy PLC Can Help
If you are experiencing a situation in which your business or personal contract has not been honored, it is so important to find a knowledgeable and experienced business litigation attorney who can help you to protect your interests. At Surovell Isaacs & Levy PLC, we work with our clients to do what is best for them and their business whether that means bringing a claim for breach of contract against the other party, or, in the appropriate situations a claim for tortious interference against third parties. For more information or to schedule a consultation, visit us online or call us at 703-651-2120 today!
Posted in: Business Law