All businesses rely on contracts to operate efficiently and to protect business interests. A tortious interference with a contractual or business relationship in Florida occurs when a third party to a business agreement intentionally disrupts that business relationship.
Written contracts are necessary for businesses to operate efficiently. From employees to sellers and partnerships, sound contracts are critically important in every role of your business’ operations. When a party to a contract fails to perform its obligations, a business owner may have not only breach of contract claims against the party to the contract, but also claims against third-parties for interfering with the business relationship and causing the breach.
In this article, we will explore tortious interference claims, provide some examples, and give you the next steps if a third party may have interfered with a business relationship or caused a breach of contract.
- Tortious Interference occurs whenever a third party intentionally disrupts a business relationship and/or causes a party to breach a contract.
- Tortious interference of business relationships and tortious interference of contract are the two primary types of claims that can be made. A breach of contract action may be settled, which does not necessarily affect recovery on a tortious interference claim in relation to the same business agreement. Plaintiffs in Florida may not add recovery for tortious interference with an additional claim for breach of contract against the same party.
- To have a successful claim, you need to prove that the defendant knew about the relationship and that the defendant’s actions knowingly disrupted the business relationship. You must also prove that as a direct result of the business disruption, damages occurred.
- Currently in Florida, the statute of limitations is four years for tortious interference claims. When the last element of the defendant’s action occurs, the limitations period begins to run.
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What Is Tortious Interference?
Tortious interference, a common law tort, allows a plaintiff to claim damages against a defendant who intentionally damaged a contractual or business relationship(s). Essentially, a party can claim damages against someone who has wrongfully interfered with contractual or business relationships resulting in economic losses for a company.
There are two main types of tortious interference claims:
Tortious interference with business relationships – A third party unjustifiably interferes with a business relationship.
Tortious interference of contract – A third party wrongfully interferes with and/or causes the breach of a contractual agreement between two parties.
Examples of Tortious Interference
When a third party purposefully disrupts, interferes, or interrupts with the contractual or business relationship between two other parties, a claim for tortious interference in Florida may exist.
As this type of claim can take on many forms, it’s best to speak with an experienced business litigation attorney to see if the unique facts of your case give rise to a meritorious claim. Additional examples of tortious interference may include:
- A vendor demanding unreasonable prices, causing a company to breach a contract with another party.
- A party refuses to perform an obligation, like delivering goods, that damages the business’s ability to fulfill its contractual obligations.
- A parent company disrupting a subsidiary’s business causing the subsidiary to be unable to perform contractual obligations.
Elements of Proving a Tortious Interference Case
To successfully assert a tortious interference claim in Florida, the following elements must be established:
- A contractual or advantageous business relationship existed between the plaintiff and another party.
- The defendant was aware of the contract or the relationship.
- The defendant intentionally took actions that caused a breach of contract or interfered with the purpose of the subject business relationship.
- The defendant’s actions when breaching the contract were not legally justified.
- As a result of the interference, the plaintiff suffered damages.
It is critical for the success of the case that the plaintiff establishes causation. Meaning that the breach of contract or disruption of the business relationship would not have occurred but for the intentional interference of the third party (the defendant).
When Defending a Tortious Interference Claim
Potential defense strategies on a tortious interference claim may include:
- The defendant was not aware of the business relationship, agreement, or contract.
- There was no valid contract or business relationship in existence when the interference occurred.
- The defendant’s actions did not have the intent of interfering with or disrupting the relationship or the contract in place.
- Regardless of the disruption, the contract would have been breached, or the contract was not breached.
- Legal justification(s) for the disruptive action.
If the defendant will prevail on the tortious interference claim if it can prove the disruption was actually lawful business competition.
What Type of Damages Are Awarded in a Tortious Interference Claim?
A Florida business affected by tortious interference can seek damages from the defendant, including:
- Loss of business and/or profits,
- Lasting harm to their reputation,
- and/or emotional distress
Legal damages are a monetary remedy to compensate the plaintiff for the losses incurred in relation to the defendant’s wrongful interference. Damages vary in each case and are calculated based on the plaintiff’s actual losses.
Should there be uncertainty as to the exact amount, or difficulty in proving this number, evidence of substantial damages from specialists such as accountants or economists can help find a reasonable basis for the amount awarded for recovery. These experts can raise litigation costs but are invaluable to identify the appropriate amount of damages for the legal claim.
The Statute of Limitations for Tortious Interference
Currently in Florida, the statute of limitations is four years for tortious interference claims. When the last element of the defendant’s action occurs, the limitations period begins.
It is best to assert known legal claims as soon as possible. The more time passes, the more difficult it may be to retain documents, identify witnesses, and secure evidence to support the legal claim. Keep records of when the events occurred and share these with your legal team should you take action to protect your business interests.
The Experienced Business Litigation Attorneys at The Frazer Firm Can Help
Working with an experienced, veteran business litigation attorney is critical if you believe your company has a tortious interference claim or a claim has been filed against your company. The Frazer Firm in Jupiter, Florida can review your case, advise you on what steps to take, and help you recover your losses or defend your company’s actions.
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