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What is Tortious Interference in TX?

broken contract

You have a business deal all set up. You’ve hammered out the details, you’ve agreed on a price and the services to be rendered. The deal might even pertain to an existing arrangement and you are simply continuing your trend of stellar deliverables. Then, inexplicably, your business associate cancels the deal. You find out that an old employee went to your business associate and concocted some outrageous lies about you and your company, causing them to choose to rescind the deal. By the time you correct the falsehood (if they ever believe you), they’ve already made a deal with another party. Do you have any options? There was arguably fraud, but the fraudulent statements weren’t made to you–they were made to maliciously ruin your business deal.

If you have a contract that is ruined by a third party, you might have a claim for tortious interference. Continue reading to learn about tortious interference in Texas, and call a seasoned Houston business lawyer for help with a Texas business law matter.

Elements of Tortious Interference

Tortious interference is a relatively unknown legal claim. Tortious interference is meant to help parties to a contract fulfill their obligations without interference by a third party. There are a number of different ways in which tortious interference can occur, and proving that third-party conduct was actual tortious interference rather than simple competitive behavior (e.g., offering a better deal) can be tricky.

There are two main types of tortious interference: interference with existing contracts and interfering with prospective contracts or business relationships. Interference with existing contracts is far easier to prove. The plaintiff must show:

  • There was a contract between you and another party,
  • A third party willfully and intentionally interfered with that contract, and
  • You suffered damages as a result.

The defendant need only have intended to cause the consequences of their actions, not that they actually intended to cause injury. Their actions must have proximately caused your injury, by persuading the other party to breach the contract or by making performance to be more difficult or to be of less value.

It’s much more difficult to prove tortious interference with a potential future contract. Under Texas law, the plaintiff must show:

  • There is a reasonable probability that you and another party were going to reach an agreement or business relationship,
  • A third party committed a willful act of interference,
  • The act of interference was “independently tortious,” and
  • You suffered damages as a result.

“Independently tortious” means conduct that would give rise to a legal claim already, such as fraud, misrepresentation, trespass, or violation of a non-compete agreement.

Common acts of tortious interference in Texas include blackmail, violation of a non-compete agreement, lying about someone’s business to drive away customers or business partners, deliberate interference with a party’s ability to perform their contractual obligations, or even inducing someone to breach a contract by offering to sell goods below market price.

Remedies for Tortious Interference

If you can prove tortious interference of a contract by a third party, you may be able to recover damages from that party. Typically, you can recover economic damages for lost profits and other monetary damages provably caused by the tortfeasor’s interference. Proving that you lost income as a result of a contract that had yet to be enacted is likewise more difficult, while proving interference with an existing agreement renders it easier to show direct damages.

Additionally, if you can demonstrate that the third party intentionally and maliciously ruined your business dealings, you might also be able to collect punitive damages. Punitive damages are awarded on top of compensatory damages and are intended to punish a wrongdoer for deliberately malicious acts. You can also obtain a court order preventing the third party from benefiting from their tortious behavior.

If you need legal assistance with a Texas business law matter, contact the experienced and professional Texas business law attorney Leigh Meineke at the Houston offices of Stephens | Domnitz | Meineke PLLC by calling 832-706-0244.

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