Tortious Interference With Economic Relations In New York: Elements & Defenses

• Published date: 09 October 2023
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Criminal Law, Contract of Employment, Personal Injury, Crime
• Law Firm: KI Legal
• Author: Mr Andreas Koutsoudakis and John Flouskakos

I. Elements

What is tortious interference? Tortious interference is a common law tort that most often arises in commercial litigation when one party damages another party's contractual or business relationship with others. Most jurisdictions recognize separate claims for tortious interference with contract and tortious interference with business relationships.

The claim for tortious interference with economic relations has four elements. To establish a claim for tortious interference with economic relations or prospective business advantage, a plaintiff must demonstrate that:

1. The plaintiff had business relations with a third party;
2. The defendant interfered with those business relations;
3. The defendant acted with the sole purpose of harming the plaintiff or by using unlawful means; and
4. There was resulting injury to the business relationship."¹

While a similar standard and claim compared to tortious interference with a contract, tortious interference with economic relations is generally harder to prove in court. This is because unlike proving tortious interference with a prospective economic relationship, proving tortious interference with economic relations is often more difficult than proving tortious interference with a contract because courts are more protective of existing contracts than potential opportunities.

The Plaintiff Had Business Relations With a Third Party

The first element, as stated above, is that the plaintiff had business relations with a third party. In this case, a third party is any person or entity who is not the plaintiff or defendant. Where a plaintiff can show a valid contract, the interference need not be independently unlawful to be actionable. Prospective relationships, in contrast, can fail for many legitimate reasons, such as economic competition.² Courts thus set a high bar before they impose liability on third parties for a prospective relationship's failure.³ One such example of a prospective business relationship is an employer recruiting an employee and preparing to offer an employment contract.

The Defendant Interfered with Those Business Relations

The second element, as stated above, is the defendant must interfere with the relationship. The plaintiff must show that the defendant induced or otherwise caused the economic relationship between the plaintiff and third party to breakdown or prevented such relationship from occurring.⁴

The Defendant Acted with the Sole Purpose of Harming the Plaintiff or by Using Unlawful...