Tortious Interference With Contracts in New York: The Legal Basics

New York City Business Law Attorneys

Business law covers a wide variety of issues, from entity selection for startups to strategies for business dissolution when an enterprise must be broken up or terminated outright. In between these events, owners, directors and managers must deal with a host of issues such as employment agreements, shareholder disputes and commercial litigation involving contract disputes.

One important aspect of some commercial disputes is an allegation that a third party has engaged in tortious interference with contractual relations. In basic terms, this means that a business or individual who is not party to a contract has engaged in behavior that willfully disrupts a business relationship formalized between other parties.

Under New York law, a tort action for interference with a contractual relationship must be based upon five essential elements:

  • A valid contractual agreement between parties must be established
  • The defendant must be shown to have had knowledge of the contractual agreement
  • The alleged interference must have caused a breach of the contract
  • The interference must be both intentional and improper
  • The plaintiff must establish that it suffered damages as a result of the alleged contractual interference

Examples of Legal Interference Cases

A key issue in any claim involving allegations of tortious interference with contract is proving the causal relationship between the alleged interference and the breach. One classic example of interference in New York case law is holding over occupancy of a property to prevent a new lessor from taking over possession. Another is hiring an artist to perform on a certain date despite knowing that the person or act is already obligated to appear at another venue.

Interference can also be based on a fraudulent representation, such as intentionally understating shipping costs to cause a supplier to exceed contractual terms when billing a buyer. A business lawyer can help a client see the legal strengths and weaknesses of any alleged interference, while assisting with other issues related to the contract.

Monetary damages are the most likely remedy for tortious interference. However, injunctive relief can be granted when damages are an inadequate form of relief, such as when the plaintiff would suffer irreparable harm due to the defendant's ongoing interference.

Contact Cox Padmore Skolnik & Shakarchy LLP

A New York contract dispute attorney can explain the legal complexities involved in these cases, and help plaintiffs or defendants explore a legal strategy based on the latest interpretations of contractual rights and tort law.