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David H. Schwartz Oct. 27, 2020

It takes hard work to build up a business to the point of economic success. This is usually achieved by forming relationships with other businesses, whether those relationships exist on paper through a contract or whether they are simply sealed by a handshake. Unfortunately, situations arise where a third-party disrupts that relationship, intentionally or otherwise, and causes economic harm. If you are the victim of or accused of interference with a contractual or advantageous relationship you need the guidance of an experienced litigation attorney.

The Law Offices of David H. Schwartz, INC. is dedicated to helping clients navigate complex business litigation. If you operate in San Francisco or the San Francisco Bay Area, including San Jose, Santa Clara, San Mateo, and Alameda County, you can rely on the business litigation expertise of Attorney David H. Schwartz. His 45 years of experience in commercial litigation, arbitration, and negotiation will help you protect your rights. 

Examples of Interference 

Interference with contractual or advantageous relationships is often referred to as tortious interference in California. The most common form of interference occurs when an individual forces or induces someone to break a contract or business relationship with another party. This act of force, or inducement, can take different forms, including threats, blackmail or libel, improper or unethical actions, breach of contract, or by more open forms of interference — for instance, by refusing to transport goods. 

For this act to amount to tortious interference, however, the interfering party must be shown to have acted with an improper motive, thus raising the bar for proof. In most states, the action must be shown to be intentional, but in certain instances in California, mere negligence can also rise to the level of tortious interference. 

California Law: Types of Interference 

California recognizes two types of tortious interference: “interference with prospective economic advantage,” or IWPEA, and “interference with contractual relations” or IWCR. An IWPEA claim does not require a contractual relationship between the parties who were harmed, while an IWCR does necessitate the existence of a contract, written or oral. 

The IWPEA involves an ongoing business relationship — or joint expectancy for economic advantage — between parties who have not formalized a contractual relationship. California recognizes two forms of interference with an IWPEA: intentional and negligent. Intentional interference requires proof in court of willful intent, while a claim of negligence merely requires that the interfering entity be shown to have known, or should have known, that the business relationship existed. Negligence generally means failure to act with reasonable care. 

An IWCR involves parties with oral or written contracts who have suffered because of economic interference by a third party. In IWCR cases, however, the interference must be shown to have been both intentional and improper. Negligence is not recognized by California courts when contracts are involved.

Burden of Proof 

Both IWPEA and IWCR claims share some legal elements: 

  • A contractual or other business relationship exists

  • Actual interference between these parties occurs

  • The interference is improper

  • The plaintiff suffers economic and other damage as a result 

The IWCR, unlike the IWPEA, also requires evidence that the interference was intentional. 

Potential Damages to Be Recovered 

Each case of interference with a contractual or advantageous relationship carries its own unique elements and consequences, but damages to be recovered include: 

Compensatory Damages

Here the plaintiff receives compensation for all damages that occurred, including lost profits, business reputation damage, destruction of business relationships, loss of potential business and contractors, and mental distress. 

Punitive Damages

In addition to actual damages, the plaintiff can receive compensation to punish the interfering party for acting with fraud, malice, or oppression. 

Injunctive Relief

The plaintiff can obtain a court order restraining or prohibiting all future acts of interference or economic disruption. 

Seek the Help of a Knowledgeable Business Litigation Attorney 

If your business has been interfered with to your economic disadvantage, you may well be entitled to file a claim of tortious interference. You should seek experienced and dedicated legal help. On the other hand, if you’ve been accused of interfering with another business with a tortious legal claim, you also need the help of a competent business litigation attorney. 

If you are involved in a case of interference with a contractual or advantageous relationship, contact the Law Offices of David H. Schwartz immediately. Mr. Schwartz will assess your situation, review your case, and fight to protect your rights. Call today to schedule a one-on-one consultation. The Law Offices of David H. Schwartz, INC. represents clients in San Francisco, San Jose, Alameda County, Santa Clara, San Mateo, Oakland, and the surrounding communities in the San Francisco Bay Area.