In today's Freedom Friday blog and email newsletter, I want to talk about a topic that comes up with some of my business litigation clients.  Sometimes another business is somehow interfering with the client's business and the client wants to know whether or not the conduct is actionable.  In other words, can they sue this person or business that's interfering with the client's business.  This is what is called “tortious interference,” and that's the topic in today's Freedom Friday blog and email newsletter.  In today's Freedom Friday blog and email newsletter, I'm answering the question, “What is tortious interference?”

In Oklahoma, tortious interference occurs when a third party intentionally disrupts a contract or a business relationship and causes financial harm.  This can be either tortious interference with a contract, which is when a third party intentionally causes a party to breach an existing contract, or tortious interference with a business relationship, which is when a third party disrupts a prospective or existing business relationship, even if no formal contract exists.  To prove a tortious interference claim, the plaintiff must show that (1) the interference was with an existing contractual or business right; (2) the interference was malicious or wrongful; (3) the interference was not justified, privileged, or excusable; and (4) the interference caused damages and/or financial harm.

Common examples of tortious interference include convincing a party to a contract to break a contract, a third party spreading false information about your business to discourage others from becoming your customers, a third party using unlawful or deceptive business practices which interferes with your business transactions, and a third party encouraging employees (or independent contractors) to break valid non-compete or non-disclosure agreements, and then such employees quit your company and then go join the rival competitor.  Here are five (5) significant impacts of tortious interference on your business:

1.  Financial Losses

The first significant impact of tortious interference on your business is financial losses.  When a third party interferes with a contract or a business relationship, the business can suffer direct financial harm including lost revenue, additional expenses, and legal fees.  For instance, if a competitor encourages a supplier to stop doing business with you and do business with the competitor instead, your business could experience operational delays, increased costs, and even loss of customers.

2.    Reputational Damage

The second significant impact of tortious interference on your business is reputational damage.  If a third party spreads false information, convinces customers to leave your business, or otherwise disrupts your business relationships, the resulting harm can last a long time.  Negative publicity, loss of trust from customers, and reduced credibility in the market can be very difficult for your business.

3.    Operational Disruption

The third significant impact of tortious interference on your business is operational disruption.  Tortious interference can cause significant operational disruptions, especially if your company loses a key contract or supplier.  These disruptions can lead to product shortages, missed deadlines, and ultimately losing customers to your competitors.

4.    Legal Costs

The fourth significant impact of tortious interference on your business is legal costs.  Litigation can be costly, and filing a lawsuit to recover damages will require your time and money.  Even if you win, legal fees can add up and the lawsuit can divert your attention from core business operations which causes further setbacks.

5.    Loss of Competitive Advantage

The fifth significant impact of tortious interference on your business is loss of your company's competitive advantage.  Competitors who intentionally disrupt contracts or business relationships can gain an unfair advantage in the market.  Unfair and deceptive business practices can make it harder for your business to compete, expand, or maintain its customer base.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.