Tortious interference with contract—also known as intentional interference with contractual relations or business expectancy—is a civil claim or cause of action based on interference with a contract or a prospective contract that is about to be completed—by a person or entity who is not a party to the contract (third party).
A claim for tortious interference is based on the idea that the third party encouraged or induced one of the parties to the contract to breach the contract, causing damages to the nonbreaching party, who may sue the third party to recover those damages or losses. In some states there is a requirement that the interference be done maliciously or without justification.
Laws regarding claims for tortious interference with contract vary from state to state. Some states have broadened the protections against interference beyond situations where there is an existing contract and recognize claims for interference with prospective economic advantage or business relations.
But whether there is an existing contract or not, some instances of interference will not create legal liability and will be recognized as legitimate competitive activity, for example.
In Texas, tortious interference with a contract occurs when a third party, who is not part of an existing contract, intentionally takes actions that cause one of the contracting parties to breach that contract, resulting in harm to the other party. The elements of this claim typically include the existence of a valid contract, the third party's knowledge of the contract, intentional and improper interference causing the breach, and damages resulting from the breach. Texas law also recognizes a cause of action for tortious interference with prospective contracts or business relations, which protects the potential economic relationships that are likely to occur but have not yet resulted in a contract. However, not all interferences are actionable; actions that are considered legitimate competition or are done without malice may not constitute tortious interference. The specific circumstances of each case determine whether the interference was improper and whether it gives rise to legal liability.
