Tortious Interference with Prospective Contractual Relations as a Cause of Action in New York

In a competitive marketplace, businesses often form relationships with potential clients, customers, or partners even before a formal contract is signed. When someone intentionally disrupts those developing relationships, New York law may provide a remedy under the cause of action known as tortious interference with prospective contractual relations. This claim is designed to protect future or expected business opportunities from unfair interference. To win such a claim, a plaintiff must prove each of the following elements.

A Business Relationship with a Third Party

The first element requires that the plaintiff had a business relationship with someone else—this could include ongoing negotiations, future plans to enter into a contract, or a regular course of dealings. While it does not have to be a binding contract, there must be more than just a hope or vague possibility of doing business. Courts look for evidence that the relationship was real, identifiable, and had a likelihood of resulting in a financial benefit to the plaintiff.

Defendant’s Knowledge of That Relationship and Intentional Interference

Next, the plaintiff must show that the defendant knew about the business relationship and took deliberate steps to interfere with it. This interference must be intentional, not accidental. It is not enough that the defendant happened to do something that caused the relationship to fall apart; the interference must have been aimed at disrupting or preventing the relationship from continuing or developing.

Malice or Improper or Illegal Means Amounting to a Crime or Independent Tort

The third element is what sets this claim apart. The plaintiff must prove that the interference was carried out with either malice or through conduct that was improper or illegal. This includes actions that rise to the level of a separate legal wrong, such as fraud, defamation, threats, or other wrongful behavior that would itself be considered a crime or a civil wrong. Simply competing for the same business is not enough, New York law allows fair competition. The plaintiff must show that the defendant crossed the line into wrongful conduct.

Injury to the Relationship with the Third Party

Finally, the plaintiff must show that they suffered harm as a result of the interference. This usually means a lost deal, a contract that never materialized, or some other concrete financial loss connected to the damaged relationship. The injury must be directly tied to the defendant’s interference.

Conclusion

Tortious interference with prospective contractual relations is a focused legal claim that gives businesses and individuals a way to protect valuable opportunities from wrongful disruption. It is not aimed at everyday competition but at those who use improper means or malicious intent to sabotage someone else’s business prospects. By requiring proof of both a real business relationship and improper interference, New York courts aim to strike a balance between protecting fair competition and punishing unfair tactics.

Find the Law

“The elements of tortious interference with prospective contractual relations are 1) a business relationship with a third party; 2) defendant’s knowledge of that relationship and intentional interference with it; 3) malice or improper or illegal means amounting to a crime or independent tort; and 4) injury to the relationship with the third party.”Change Healthcare Operations, LLC v. WebMD Health Corp., 2017 N.Y. Slip Op. 32725, 18 (N.Y. Sup. Ct. 2017)