Contractual Interference
Claims of interference with the employment relationship or an existing contract being performed by both sides are frequently asserted in cases involving wrongful discharge and other employment contract claims, as a means of avoiding the general rule of contract law which prohibits awards of emotional distress and punitive damages for breach of contract.
To state a claim for interference with contract or prospective economic advantage, four elements must be proved: (1) a contract or protectable right; (2) interference done intentionally and with malice; (3) causation of a loss by the interference; and (4) damages. The improper interference with one’s business trade and/or an employment relationship in good standing has also long been recognized as an appropriate basis for this tort.
The term “prospective economic advantage” requires some explanation. A protectable prospective economic relation is “more than some vague, indefinite or general future employment opportunity.”
To be actionable, the interference must have been done intentionally and with “malice.” Malice is not used in the literal sense requiring ill will toward the victim. Rather, malice in this type of tort claim requires that the harm inflicted must have been intentional and without a justifiable excuse. The interference alleged must be both intentional and legally or ethically improper.
Whether particular conduct is malicious must be determined on a case-by-case basis under a somewhat loose and flexible standard which is focused on the defendant’s actions in the context of the case.
The essence of the case, in its simplest form, is whether what the defendant has done to the plaintiff is legally actionable. The ultimate inquiry is whether the conduct was ‘both damaging and violative of generally accepted standards of employment or commercial behavior. Not only must a defendant’s motive and purpose be proper but so also must be the means by which he/she/it interfered.
Did the Improper Interference Cause the Loss and Are There Economic Damages
The interference by the accused wrongdoer must have caused the loss of contract or prospective economic gain. A plaintiff must show that “if there had been no interference, there was a reasonable probability that the victim of the interference would have received the anticipated economic benefits.
The economic injury caused by the wrongful interference must have resulted in a provable economic injury and loss by the victim. The loss must be real and subject to computation of measurable damages.
The Necessity of an Outsider Who Interferes with the Contract
Tortious interference was created to protect parties to a contract or prospective contract from outside interference; it is not intended to change the terms and obligations governing a contract. “Where a person interferes with the performance of his or her contract, the liability is governed by principles of contract law.
Here is one reported NJ case that illustrates the above point. Plaintiff alleged that corporate officers caused him to be discharged so they could appropriate sales commissions owed him by the corporate employer. The Appellate Division held that while the corporation could not be guilty of interference with its own contract with plaintiff, the individual defendants, “whom the jury found to have acted out of their own greed to procure plaintiff’s commissions for their own economic benefit,” could be found responsible on such claim. Although not expressly stated, the apparent basis for that opinion was that the employees, acting outside the scope of their duties and for personal opinion was that the employees, acting outside the scope of their duties and for personal rather than corporate motives effectively became third parties to the corporation’s employment relationship with plaintiff.
Think you have a case for wrongful interference and contractual damages caused by the wrongdoing of a third party? If so, please contact Fredrick P. Niemann toll-free at (855) 376-5291 or e-mail him at fniemann@hnlawfirm.com. He or a member of the office will be happy to speak and meet with you to address your matter.
Fredrick P. Niemann Esq
New Jersey Contract Attorney serving these New Jersey Counties:
Monmouth County, Ocean County, Essex County, Cape May County, Mercer County, Middlesex County,
Bergen County, Morris County, Burlington County, Union County, Somerset County, Hudson County, Passaic County