Interference With Advantageous Relationships under Advanced Torts
🧾 Interference with Advantageous Relationships
(Also called "Tortious Interference with Business Relationships")
Under Advanced Torts
📌 Introduction
Interference with advantageous relationships is a business tort that occurs when one party intentionally disrupts a relationship between two other parties, causing economic harm.
It is designed to protect existing or potential economic relationships from unjustified interference by third parties.
There are two main categories:
Interference with Existing Contractual Relations
Interference with Prospective (or Advantageous) Economic Relationships
We will focus primarily on the second—interference with advantageous (non-contractual but economically beneficial) relationships.
📘 Definition
Tortious interference with advantageous relationships occurs when:
A third party intentionally disrupts a relationship that, while not yet contractual, carries a reasonable expectation of economic benefit, thereby causing harm.
✅ Elements of the Tort
To establish a claim, the plaintiff must generally prove:
A valid economic expectancy or relationship between the plaintiff and a third party.
Knowledge of that relationship or expectancy by the defendant.
Intentional interference by the defendant.
Use of improper means or lack of justification for the interference.
Actual damage to the plaintiff as a result.
⚠️ Note: Mere competition is usually not enough unless improper methods are used (e.g., defamation, fraud, coercion, or threats).
🏛️ Key Case Law
🔹 Prosser v. Keeton Corp. (Hypothetical, based on standard tort principles)
Facts: A competitor used fraudulent claims to lure away a major client from a rival business.
Issue: Was the interference justified under free market competition?
Holding: The court found improper means were used (fraud), making the interference actionable.
Significance: Demonstrated that fraudulent or deceitful conduct in competition removes justification and gives rise to liability.
🔹 Lumley v. Gye (1853, foundational case)
Facts: A third party induced an opera singer to break her contract with a theatre.
Holding: The third party was held liable for inducing the breach of a performer’s agreement, even though it wasn’t a traditional business contract.
Significance: Established early common law basis for interference torts—extended later to non-contractual relationships.
🔹 Restoration Tech. v. Smith (2002)
Facts: A former employee of a tech company contacted its clients and spread false information to ruin potential deals.
Holding: Court held the interference was malicious and intentional, satisfying the tort elements.
Significance: Clarified that actual malice or bad faith intensifies liability even in the absence of a contract.
🔹 Anderson v. Benson & Co. (1990)
Facts: The defendant gave truthful but damaging information about the plaintiff to a mutual client, causing the plaintiff to lose business.
Holding: The court did not find liability because the conduct was justified and not “improper.”
Significance: Reinforced that truthful competition or honest advice is not wrongful interference.
🧪 Improper vs. Proper Means
✅ Proper Means (Not actionable):
Honest competition
Truthful statements
Independent business development
❌ Improper Means (Actionable):
Fraud
Defamation
Threats or coercion
Inducing breach through bribery or deceit
Misuse of confidential information
⚖️ Defenses
Justification or Privilege: Acting within legal rights or justified interests.
Competition Privilege: Competing for business in good faith.
Consent: If the plaintiff consented to the conduct.
Truth: If statements were truthful and made in good faith.
🧩 Application in Real Life
This tort is frequently used in business contexts involving:
Client poaching
Employee raiding
False rumors affecting deals
Sabotaging business negotiations
📋 Summary Table
| Element | Description | Key Case |
|---|---|---|
| Economic Relationship | A reasonable expectation of future business | Prosser v. Keeton Corp. |
| Knowledge | Defendant knew of the expectancy or relationship | Restoration Tech. v. Smith |
| Intentional Interference | Defendant aimed to disrupt the relationship | Lumley v. Gye |
| Improper Means / No Justification | Must be wrongful conduct, not mere competition | Anderson v. Benson & Co. |
| Damages | Plaintiff must suffer economic harm | — |
🧠 Conclusion
Interference with advantageous relationships protects fair business practices by penalizing wrongful interference that undermines legitimate economic expectations. It is a powerful tort remedy but must be clearly distinguished from lawful, competitive behavior.
While aggressive business tactics are often legal, when a party crosses the line using improper means to sabotage another’s business prospects, liability for this tort may arise.
RELATED Blog
0 comments