Tortious interference is a category of economic tort recognized primarily in common-law jurisdictions (the United States, United Kingdom, Canada, Australia). It allows a plaintiff to sue a third party who intentionally and improperly disrupted either an existing contract or a prospective business relationship, even though the third party was not itself a party to that contract.
The doctrine generally splits into two branches:
- Tortious interference with contract: The defendant knew of an existing valid contract between the plaintiff and another party and intentionally induced a breach, causing damages.
- Tortious interference with prospective economic advantage (sometimes called interference with business expectancy): The defendant disrupted a reasonably expected business relationship that had not yet been reduced to a binding contract. Most U.S. jurisdictions require the plaintiff to show the interference was "independently wrongful" — for example, involving fraud, defamation, or threats.
The U.S. Restatement (Second) of Torts §§ 766–767 sets out the widely cited elements and factors courts weigh, including the nature of the defendant's conduct, motive, the interests interfered with, and the social interests at stake. Lawful competition is typically a defense: a competitor who offers a better price to lure away a customer is not liable absent improper means.
While the tort is domestic, it surfaces in international and policy contexts. Foreign sovereigns and state-owned enterprises have occasionally been named as defendants, raising questions under the U.S. Foreign Sovereign Immunities Act (1976). Sanctions compliance also intersects with the doctrine: companies that withdraw from contracts to comply with U.S. or EU sanctions regimes sometimes face interference claims from disappointed counterparties, and may invoke government compulsion or force majeure as defenses.
For Model UN and IR researchers, the concept matters when analyzing extraterritorial application of national law, secondary sanctions, and the boundary between aggressive commercial diplomacy and actionable misconduct by states or multinational firms.
Example
In *Pennzoil Co. v. Texaco, Inc.* (1987), a Texas jury awarded Pennzoil more than $10 billion after finding Texaco had tortiously interfered with Pennzoil's agreement to acquire Getty Oil.
Frequently asked questions
Typically: a valid contract or business expectancy, the defendant's knowledge of it, intentional and improper acts causing breach or disruption, and resulting damages. Exact elements vary by jurisdiction.
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