Interference-with-contractual-relationsThe business tort of interference with contractual relations is similar to, and often associated with, the business tort of interference of economic relationships.  It is a common example of a third-party tortious interference claim.  For example, a person or business who improperly interferes with the performance of a contract can be liable if the person obligated to perform the contract fails to perform the contract.  In the business context, this may also be a direct action for a breach of contract lawsuit.

Elements of Interference With Contractual Relations:

In short, to prove interference with contractual relations an injured or damaged party must establish: (1) some protectable contract right that a business relationship exists, (2) that the contractual interference was done intentionally, (3) that the contractual interference caused the loss of some economic gain, and (4) that the contractual interference, in fact, caused damage or injury.  Tortious interference with contract occurs when the third-party convinces a party to breach the contract with the plaintiff, or where he intentionally disrupts the ability of one party to perform his obligations under the contract.

In order to bring an interference with contractual relations lawsuit, an injured party must be able to prove they have a protectable contract right, there is an existing business relationship, the interference of the business relationship was intentional, the act caused the loss of an economic gain, and the interference caused the injury in fact.
The plaintiff in a tortious interference with contract case must prove that the defendant acted intentionally, but need not prove that the defendant acted out of malice or spite.  Knowledge of the contract and the likelihood that the behavior would cause a breach is generally enough.

Tortious interference with contractual relations affords greater protection to a plaintiff than tortious interference with prospective business relationship because a contractual relationship takes legal precedence over the defendant’s conflicting right to compete.  When there is no enforceable or valid contract between the parties, however, a plaintiff may not claim interference with contractual relations but may be able to claim tortious interference with prospective economic advantage. A tortious interference with contractual relations claim can be a valuable tool in a business dispute for a person or Illinois business entity who believes that a client or competitor is interfering with a valuable relationship.