Intentional Interference with Contractual Relations
Elements
A Plaintiff must prove:
- a valid and existing contract;
- the defendant’s knowledge of the contract;
- intentional acts intended or designed to disrupt the contractual relationship;
- actual disruption of the contract; and
- resulting damage.
J.J. Indus., LLC v. Bennett, 119 Nev. 269, 274, 71 P.3d 1264, 1267 (2003) Hilton Hotels Corp. v. Butch Lewis Productions, Inc., 109 Nev. 1043, 1048, 862 P.2d 1207, 1210 (1993) Sutherland v. Gross, 105 Nev. 192, 196, 772 P.2d 1287, 1290 (1989) Wichinsky v. Mosa, 109 Nev. 84, 88, 847 P.2d 727 (1993).
Example Cases
Proof
Knowledge
- “Restatement (Second) of Torts § 766 cmt. i (1979) provides that ‘the actor must have knowledge of the contract with which he is interfering and of the fact that he is interfering with the performance of the contract.’ Because interference with contractual relations is an intentional tort, the plaintiff must demonstrate that the defendant knew of the existing contract, or at the very least, establish ‘facts from which the existence of the contract can reasonably be inferred.’ Nat. Right to Life P.A. Com. v. Friends of Bryan, 741 F.Supp. 807, 813 (D.Nev.1990) see also Sebastian Intern., Inc. v. Russolillo, 162 F.Supp.2d 1198, 1204 (C.D.Cal.2001).”
J.J. Indus., LLC v. Bennett, 119 Nev. 269, 274, 71 P.3d 1264, 1267 (2003). - [California case] Intentional interference with contractual relations has its roots in the tort of ‘inducing breach of contract.’ Both are intentional torts. As this court explained in an early case, ‘The act of inducing the breach must be an intentional one. If the actor had no knowledge of the existence of the contract or his actions were not intended to induce a breach, he cannot be held liable though an actual breach results from his lawful and proper acts.
Seaman’s Direct Buying Service, Inc. v. Standard Oil Co., 36 Cal.3d 752, 765, 686 P.2d 1158 (1987).
Intent
- “[T]here can be no doubt that proof of intentional interference is a sine qua non of the tort.”
M & R Inv. Co. v. Goldsberry, 707 P.2d 1143 (Nev. 1985). - “‘The fact of a general intent to interfere, under a definition that includes imputed knowledge of consequences, does not alone suffice to impose liability. Inquiry into the motive or purpose of the actor is necessary. The inducement of a breach, therefore, does not always vest third or incidental persons with a tort action against the one who interfered. Where the actor’s conduct is not criminal or fraudulent, and absent some other aggravating circumstances, it is necessary to identify those whom the actor had a specific motive or purpose to injure by his interference and to limit liability accordingly.’ Nat. Right to Life P.A. Com., 741 F.Supp. at 814 (emphasis in original) (quoting DeVoto v. Pacific Fid. Life Ins. Co., 618 F.2d 1340, 1347 (9th Cir.1980)).”
J.J. Indus., LLC v. Bennett, 119 Nev. 269, 275, 71 P.3d 1264, 1268 (2003). - “[B]ecause the action involves an intentional tort, the inquiry usually concerns the defendant’s ultimate purpose or the objective that he or she is seeking to advance.Thus, mere knowledge of the contract is insufficient to establish that the defendant intended or designed to disrupt the plaintiff’s contractual relationship; instead, the plaintiff must demonstrate that the defendant intended to induce the other party to breach the contract with the plaintiff. Accordingly, the plaintiff must inquire into the defendant’s motive.”
J.J. Indus., LLC v. Bennett, 119 Nev. 269, 275–76, 71 P.3d 1264, 1268 (2003).
Damages
Defenses
[California Case] The tort’s ‘protectionist’ premise, however, is at war with itself. For the person who deserves protection in the acquisition of property is not only the interfered-with party but also the interfering party. Why then should the interfered-with party receive favor, while the interfering party is disfavored, by virtue of their respective status? Why should the interfered-with party’s acquisitive efforts be elevated to a kind of property interest, good against the world, while those of the interfering party are deemed illegitimate? It is ‘often assumed … that interference … should produce liability because it is wrong to interfere. This is, however, very much the same as saying it is wrong because it is wrong.’ (Dobbs,Tortious Interference With Contractual Relationships, supra, 34 Ark.L.Rev. at p. 343 [speaking expressly of interference with contract].) In the words Lord Bramwell spoke in the House of Lords inMogul Steamship Company v. McGregor, Gow & Co., supra, [1892] A.C. 25, 47, affirming Mogul Steamship Company v. McGregor, Gow & Co., supra, 23 Q.B.D. 598, ‘[i]t does seem strange’–and more than strange–’that to enforce freedom of trade, of action, the law should punish’ the interfering party ‘who make[s] … perfectly honest’ arrangements ‘with a belief’ that they are ‘fairly required for [his] protection,’ whereas it rewards the interfered-with party who does likewise. (Italics in original.) Reason supports the conclusion that, even when there is a breach of contract, the interfered-with party should not be preferred over the interfering party: the breach may be ‘efficient.’ (See, e.g., Myers, The Differing Treatment of Efficiency and Competition in Antitrust and Tortious Interference Law, supra, 77 Minn.L.Rev. at pp. 1119-1120; Perlman, Interference With Contract and Other Economic Expectancies: A Clash of Contract and Tort Doctrine, supra, 49 U.Chi.L.Rev. at pp. 78-91; Dobbs, Tortious Interference With Contractual Relationships, supra, 34 Ark.L.Rev. at pp. 360-361.) Reason practically compels the same conclusion when there is no breach because there is no contract. (See Perlman, Interference With Contract and Other Economic Expectancies: A Clash of Contract and Tort Doctrine, supra, 49 U.Chi.L.Rev. at pp. 90-91.)
Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376, 399, 45 Cal. Rptr. 2d 436, 755 (1995) (Mosk, concurring).
Statute of Limitations
“Because we have determined that business interests are personal property, we conclude that intentional interference with these business interests are actions for taking personal property and not actions for injuries to a person. See Clark v. Figge, 181 N.W.2d 211, 216 (Iowa 1970) (concluding that a claim for interference in business relationships was ‘fundamentally proprietary in character although incidental injuries may have been of a different nature’). Thus, we conclude that intentional interference with business interests are subject to the three-year statute of limitations set forth in NRS 11.190(3)(c).”
Stalk v. Mushkin, 199 P.3d 838, 842 (Nev. 2009).
Privilege or Justification
[California Case] “[P]rivilege or justification is an affirmative defense, and the lack thereof need not be shown by the original pleader.”
Della Penna v. Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376, 389, 45 Cal. Rptr. 2d 436, 748 (1995) (quoting Buckaloo v. Johnson, 14 Cal.3d 815, 827-28, 122 Cal.Rptr. 745, 537 P.2d 865 (1975)).
Freedom of Speech
[California Case] Another of these values expresses itself in the guaranty of freedom of speech in the First Amendment to the United States Constitution. [FN2] ‘[S]ociety places a high value on free speech.’ (Perlman, Interference With Contract and Other Economic Expectancies: A Clash of Contract and Tort Doctrine, supra, 49 U.Chi.L.Rev. at p. 74.) ‘ ‘The First Amendment presupposes that the freedom to speak one’s mind is not only an aspect of individual liberty–and thus a good unto itself–but also is essential to the common quest for truth and the vitality of society as a whole.’ ‘ (Blatty v. New York Times Co. (1986) 42 Cal.3d 1033, 1041, 232 Cal.Rptr. 542, 728 P.2d 1177, quoting Bose Corp. v. Consumers Union of U.S., Inc., (1984) 466 U.S. 485, 503-504, 104 S.Ct. 1949, 1960-61, 80 L.Ed.2d 502.) The interfering party, however, often interferes by means of words. It has been said that, ‘so far as tort liability is imposed for the communication of facts, opinions or arguments, that liability is simply inconsistent with the law’s long commitment to free speech.’ (Dobbs, Tortious Interference With Contractual Relationships, supra, 34 Ark.L.Rev. at p. 361; see generally id. at pp. 361-363.) At the very least, the ‘need for limits is acute….’ (Perlman, Interference With Contract and Other Economic Expectancies: A Clash of Contract and Tort Doctrine, supra, 49 U.Chi.L.Rev. at p. 74.) It matters not that the words in question may amount only to so-called ‘commercial speech.’ (See Paradise Hills Associates v. Procel (1991) 235 Cal.App.3d 1528, 1544-1545, 1 Cal.Rptr.2d 514.) That is because ‘commercial speech is not ‘wholly outside the protection of the First Amendment [.]’ ‘ (Linmark Associates, Inc. v. Willingboro (1977) 431 U.S. 85, 91, 97 S.Ct. 1614, 1617, 52 L.Ed.2d 155, quoting Va. Pharmacy Bd. v. Va. Citizens Consumer Council Inc. (1976) 425 U.S. 748, 761, 96 S.Ct. 1817, 1825, 48 L.Ed.2d 346.)
FN2. The First Amendment, of course, is made applicable to the states through the due process clause of the Fourteenth Amendment. (New York Times Co. v. Sullivan (1964) 376 U.S. 254, 277, 84 S.Ct. 710, 724, 11 L.Ed.2d 686.)
Freedom of Association
[California Case] A related value is found in the First Amendment’s guaranty of freedom of association. ‘[O]ne of the foundations of our society is the right of individuals to combine with other persons in pursuit of a common goal by lawful means.’ (NAACP v. Claiborne Hardware Co.(1982) 458 U.S. 886, 933, 102 S.Ct. 3409, 3436, 73 L.Ed.2d 1215.) But when individuals join with each other to achieve an objective and undertake to act in the economic sphere, they run the risk that they will collectively be deemed an interfering party. Thus it happened to labor unionists, in the decades before and after the turn of the century, as they engaged in struggle over the terms and conditions of employment. (S’ee, e.g., Note, Tortious Interference With Contractual Relations in the Nineteenth Century: The Transformation of Property, Contract, and Tort, supra, 93 Harv.L.Rev. at pp. 1529-1537 [dealing with torts including that of intentional interference with prospective economic advantage]; Sayre, Inducing Breach of Contract (1923) 36 Harv.L.Rev. 663, 690-696 [same].) And thus it has happened in the present day as members of minority groups have sought to secure and exercise their political and civil rights. (See, e.g., NAACP v. Claiborne Hardware Co., supra, 458 U.S. at pp. 888-906, 102 S.Ct. at pp. 3413-3421.) It follows that associational freedom, too, calls for the limitation of liability under the tort.
Right to Petition the Government
[California Case] Still another value inheres in the First Amendment’s guaranty of the people’s right to petition the government for redress of grievances. This protection is one of our ‘great, … indispensable democratic freedoms,’ and occupies a ‘preferred place … in our scheme.’ (Thomas v. Collins (1945) 323 U.S. 516, 530, 65 S.Ct. 315, 322, 89 L.Ed. 430.) The interfering party, however, may interfere by raising his voice and expressing his views to governmental authorities. (See Matossian v. Fahmie (1980) 101 Cal.App.3d 128, 135-137, 161 Cal.Rptr. 532;see also Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1133, 1135, 270 Cal.Rptr. 1, 791 P.2d 587.) To be sure, the ‘grievances for redress of which the right of petition was insured’ include ‘religious [and] political ones’ and others of that stature. (Thomas v. Collins, supra, 323 U.S. at p. 531, 65 S.Ct. at p. 323.) But they may embrace as well even such as relate merely to ‘business or economic activity.’ (Ibid.) Thus, the right of petition also calls for the limitation of liability under the tort. (Carpenter, Interference With Contract Relations, supra, 41 Harv.L.Rev. at pp. 751- 752.)