What do business owners need to prove wrongful interference?

| Dec 2, 2020 | business litigation

Building relationships is an important part of any business strategy, which takes time and careful effort to establish these relationships or business partnerships.

What happens, however, if a competitor interferes with a business relationship? Business owners can take legal action against wrongful interference, but they must know what elements are necessary to prove such interference occurred.

THE FOUR ELEMENTS OF WRONGFUL INTERFERENCE

Evidence plays the most critical role in these lawsuits. Even if business owners know that a competitor interfered with their contractual relationship or partnership, it is critical to gather and save evidence.

There are four factors that business owners must prove in these cases, and the evidence collected should reflect these factors, which include:

  1. There was a valid contract: Business owners should obtain a copy of the legal contract proving the business maintained a commercial relationship or partnership.
  2. The third-party knew of the contract: This element may be more challenging to prove. Business contracts are rarely public records, and the third party might deny they had any knowledge of the contract to avoid legal penalties.
  3. The third-party interfered: There are two parts to this factor. Business owners must prove that the third party: 1) intended to interfere with the business relationship, and 2) did interfere. For example, the third-party persuaded the partner to end the current business partnership and become a partner of the third party’s instead.
  4. The business suffered damages: The business must have suffered economic damages from this interference. Business owners will generally have financial records of these damages and losses to provide as evidence.

Proving these elements can be challenging. It is often beneficial for California business owners to consult a trusted attorney if they wish to pursue damages for wrongful interference.