Business Interference

In general, tortious interference with an existing contract not terminable at will requires four elements. 1) A valid contractual relationship; 2) knowledge of the relationship by the interferer; 3) intentional interference; and 4) damage to the relationship.

A terminable at will contract requires the additional element of “improper methods.”  Duggin v. Adam, 234 Va. 221 (1987).

Illegal methods are considered improper, but improper methods do not have to be illegal.  They can include fraud, misrepresentation, misuse of inside information, breach of a fiduciary relationship, violation of an established standard of trade, unethical conduct and unfair competition.

The statute of limitations for tortious interference with contract is 5 years.  Dunlap v. Cottman Transmission Sys. 287 Va. 207 (2014).  The measure of damages is the lost profits resulting from the defendant’s actions.  Multi-Channel v. Charlottesville Quality, 65 F.3d 1113 (CA4 1995).

There are defenses to tortious interference with contract, which can loosely be described as “justification or privilege.” Legitimate business competition, financial interest, responsibility for the welfare of another, directing business policy and giving requested advice may be defenses to tortious interference with contract.  Chavez v. Johnson, 230 Va. 112 (1985).

For the defense of financial interest to apply, one must actually posses the financial interest to be protected.  Commerce Funding v. Worldwide, 249 F.3d 204 (CA4 2001).

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