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Torts • Economic Relations
TORT#107
Legal Definition
Interference with economic relations occurs when there is an intentional interference with a contract between two parties that is improper or unlawful and causes one of them to not perform the contract.
A prima facie case requires a showing of: (1) a valid contractual relationship between the plaintiff and a third party or a valid business expectancy of the plaintiff; (2) defendant's knowledge of the relationship or expectancy; (3) intentional interference from the defendant that induces breach or termination; and (4) damages.
A prima facie case requires a showing of: (1) a valid contractual relationship between the plaintiff and a third party or a valid business expectancy of the plaintiff; (2) defendant's knowledge of the relationship or expectancy; (3) intentional interference from the defendant that induces breach or termination; and (4) damages.
Plain English Explanation
Interference with economic relations is, basically, commercial adultery. When two parties enter into a contract, and then another party seduces one of them into breaching that contract, the seductress has committed this tort.
Hypothetical
Hypo 1: Bob and Sam both buy eggs from Amy's farm to sell at their grocery stores. Sam pays Amy $1 per dozen and Bob pays Amy $1.25 per dozen. Both Bob and Sam have contracts with Amy to supply their eggs for the remainder of the year. Amy decides to stop selling Sam eggs so that she has more eggs to sell to Bob and make more money. Result: If Bob did not induce Amy to breach her contract with Sam, Bob is not liable for interference with economic relations. However, Amy may still face legal consequences for breaching her contract with Sam.
