Protecting Your Business from Tortious Interference Claims

As businesses engage more aggressively in competitive practices, tortious interference is becoming increasingly common. These legal issues arise when one party unlawfully disrupts another’s contractual or business relationships, causing financial harm or reputational damage.

It’s not uncommon for a decision-maker, believing they are acting in their company’s best interest, to unintentionally cause harm to a competitor – leading to serious legal consequences.?

This article outlines how to protect your business from tortious interference claims and offers preventive strategies to avoid liability while maintaining a competitive edge.

What Are Tortious Interference Claims?

Tortious interference claims generally fall into two categories: interference with contractual relationships and interference with business relationships.

Tortious interference with contractual relationships occurs when a third party deliberately causes a breach of an existing contract. For example, persuading a vendor to break an exclusive supply agreement is grounds for an interference claim.

Interference with business relationships involves disrupting future business opportunities. A common example is a third party spreading false information to prevent potential customers or clients from engaging with a business.

Preventing Interference Claims

To protect your business from interference claims, work with a lawyer to draft and review all business contracts, ensuring your agreements are clear, comprehensive, and legally binding. This reduces the likelihood of many kinds of disputes.?

Additionally, consider incorporating non-solicitation agreements or clauses that prevent competitors from engaging in acts that could disrupt your business relationships.

Non-solicitation agreements: Standalone contracts that prohibit employees, vendors, or partners from soliciting clients, employees, or competitors. Such agreements must comply with federal antitrust laws and be reasonable in scope to be enforceable.

Non-solicitation clauses: Provisions within broader contracts (employment, vendor, or partner agreements) that restrict solicitation of clients, employees, or business relationships. These clauses must also be narrowly tailored to be legally valid.

Employee training is another preventive measure. Educating your staff on ethical competitive practices reduces the risk of unethical behavior that could trigger an interference claim. Lastly, maintaining detailed logs of all business correspondence and transactions can provide evidence when you need it, strengthening your defense against claims.

Legal Defenses Against Interference Claims

To successfully bring an interference claim , a business must prove the existence of a valid contract or business relationship, intentional interference by a third party, and damages caused by the interference.?

When faced with a business interference claim, companies can employ several legal defenses:?

Fair Competition means arguing that the actions were part of lawful competitive practices aimed at business growth, not harm.

Lack of Intent involves demonstrating that any interference was accidental, not deliberate, which weakens the claim.

Invalidity of Contract is to challenge the basis of the contract or business relationship, showing it was not enforceable.

First Amendment Protections can be used to invoke free speech rights if the claim involves statements or publications.

These defenses can help mitigate or dismiss interference claims depending on the circumstances surrounding the case.

Michigan: What to Do if Your Business Faces an Interference Claim

If you need assistance navigating an interference claim, settling out of court may be an option and will avoid prolonged litigation. However, if the case goes to trial, having an experienced civil defense team on your side is your best possible defense.?

At August Law, our professional liability attorneys have over 30 years of experience. We’ll assess your situation and guide you through the process. Contact us to schedule your free consultation today!?