In most business dealings, competition is good. It encourages businesses to find ways to offer their services in cost-effective, more efficient ways.
In the world of contracts, competition sometimes gets out of hand. Construction companies and all businesses that work in the same city or state frequently cross paths. They often compete for the same contracts. Getting those contracts can make (or break) a company.tc
Some businesses will do whatever they can – both legally and illegally – to get a contract. if you manage construction contracts for your business, you need to understand intentional interference of contracts and when competition crosses the line.
Intentional interference of a contract or business relationship
I intentional interference of a contract happens when one party obstructs a financial agreement or a relationship to cause economic damage to the other party. It might seem like that is just being competitive, but those actions can cross legal boundaries.
Interference of a contract could be tortious if it included blackmail, improper incentives or unethical practices. The charges usually happen when someone encourages or forces someone to violate the contract’s terms.
When does interference become illegal?
The court will look at the motivation behind the action. It is not tortious if the person who made the decision did not have an improper motive.
The court will decide if:
- The contract is valid.
- The defendant knew the contract’s details.
- There was actual and/or intended interference?
- The plaintiff suffered damages.
Many construction companies compete for the same contracts. Most are doing it fairly and legally. Yet some intentionally do something illegal to either ensure they get a contract – or that their competitors do not. When that happens, you could have an intentional interference of a contract lawsuit.