The Business Litigation Blog

What Is Tortious Interference with Contract In Illinois?

Contracts are the lifeblood of most businesses. Contracts are omnipresent in business and represent stability and predictability as businesses go about their everyday operations. Depending on the business, of course, contracts can determine almost every aspect of the business, including the cost and availability of materials, employment terms, production schedules and more. When contracts are breached, a variety of issues may arise. After a breach, the conflict is typically contained between the contracting parties. What happens, though, where a third party is instrumental in getting one of the parties to breach the contract for the third party’s benefit?

Tortious Interference with Contract

Illinois recognizes tortious interference with contract as a cause of action. Simply put, tortious interference with contract happens when a third party induces a breach of a contract to which it is not a party. While many people in business may not have heard of it, tortious interference happens all too frequently.

Elements of Tortious Interference

Illinois courts typically require five elements to be proven to sustain a verdict for tortious interference of contract. They are as follows:

●       There must be a valid and enforceable contract between the plaintiff and another party;

●       The party alleged to have interfered must have knowledge of the contract;

●       The defendant must have intentionally and unjustifiably induced breach of the contract;

●       The subsequent breach of the contract must have been caused by the defendant’s actions; and

●       The plaintiff must have suffered damages.

An example might be helpful. Suppose Joe makes computer chips.  He agrees to sell them to Bob for $100 apiece and they enter a contract where Joe will provide 1,000 per month for the next two years.  Steve, Bob’s competitor, finds out about the contract from Joe.  Steve then tells Joe that he will take all Joe’s production for the next two years and will pay him $125 each and none of the production can be sold to Bob.  Joe then agrees to supply Steve and breaches his contract with Bob because Steve is buying his entire production run.  Bob then must go out and get his chips from another supplier for $150 apiece.  Steve, here, has likely committed tortious interference with contract.

While it is rare to see a case as simple as the example above, it illustrates the elements necessary to sustain a case.

There must be a word or two of caution, though.  If a business competitor is luring clients away to the detriment of your business, it most likely does not rise to the level of tortious interference with contract.  There is a distinct difference between reasonable business practices (like taking a billboard across the street from a competitor) and what happened in the example above.  Also, the plaintiff must show that they were in compliance with the terms of the contract at the time of the breach or their noncompliance could be used to show that the breach was justified.

Business contracts and the litigation that they can cause can be very complex.  It takes a seasoned and experienced attorney to navigate these complexities successfully.  The skilled professionals at the Patterson Law Firm have years of experience helping Chicago area business clients get the results they deserve when contracts are breached.  If you are in a situation where you believe that your business has been a victim of tortious interference, call us today at (855) 875-3552 to set up your initial consultation and have us analyze your facts within the legal framework we know so well.  Let us help you compete on a level playing field.

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