When a competitor, former partner, or outside party deliberately damages one of your business relationships, California law may give you a claim. It's called tortious interference — and it's one of the more misunderstood theories in business litigation. This guide explains what it is, the two forms it takes, and what you actually have to prove.
This article is general information, not legal advice. If you think someone has interfered with your business, speak with a business litigation attorney about your specific facts.
Two kinds of tortious interference
California recognizes two related but distinct claims: (1) intentional interference with contractual relations — someone disrupts an existing contract you have with a third party; and (2) intentional interference with prospective economic advantage — someone disrupts a relationship that hadn't yet become a contract but was likely to produce economic benefit.
The difference matters, because the second claim is harder to prove. Courts protect signed contracts more strongly than they protect deals that were merely probable.
Interference with an existing contract
To succeed on a claim for intentional interference with contractual relations, a plaintiff generally must prove five things (see Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118):
- a valid contract between you and a third party;
- the defendant's knowledge of that contract;
- the defendant's intentional acts designed to induce a breach or disruption of the contract;
- an actual breach or disruption of the contractual relationship; and
- resulting damages.
In plain terms: someone who knew about your contract set out to blow it up, and succeeded, and it cost you money.
Interference with a prospective relationship
When the relationship hadn't yet become a binding contract, California adds an important requirement. Under Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134 and Della Penna v. Toyota Motor Sales (1995) 11 Cal.4th 376, a plaintiff must show:
- an economic relationship with a third party that carried a probable future economic benefit;
- the defendant's knowledge of the relationship;
- intentional acts designed to disrupt it;
- actual disruption;
- economic harm caused by the defendant's conduct; and
- that the defendant's conduct was independently wrongful — that is, wrongful by some legal measure beyond the interference itself.
That last element is the one that trips up most claims. Aggressive competition is legal. To turn interference into a tort, the conduct usually has to violate some other standard — fraud, defamation, a statute, or a breach of an independent duty.
What counts as "wrongful" conduct?
Courts have found conduct independently wrongful when it involves things like misrepresentation, threats, defamation, trade-secret misappropriation, or violating a statute or professional duty. Simply offering a better price, or persuading a customer to choose you fairly, does not.
Remedies
A successful claim can recover the economic losses the interference caused — lost profits, the value of the disrupted deal, and related damages. Where the conduct was especially egregious, punitive damages may be available. In some cases a court can also issue an injunction to stop ongoing interference.
What to do if you think you have a claim
Interference claims live and die on evidence of intent and knowledge, and that evidence tends to disappear. If you suspect someone has deliberately damaged a contract or a pending deal:
- preserve emails, texts, and documents showing what the other party knew and did;
- note the timeline — who knew what, and when; and
- avoid confronting the interfering party before you've spoken with counsel.
Tortious interference sits at the center of many business disputes, and the right claim often depends on subtle facts. If this sounds like your situation, a business litigation attorney can tell you quickly whether you have a case worth pursuing.
Frequently asked questions
Is tortious interference hard to prove in California?
Interference with an existing contract is more straightforward. Interference with a prospective relationship is harder, because you must also show the conduct was independently wrongful — not just competitive.
Can I sue a competitor for taking my customer?
Only if they did something legally wrongful to do it — fraud, misrepresentation, breach of a duty, or the like. Winning business through fair competition, including better pricing, is not actionable.
What's the deadline to file?
California applies a limited window to these claims, and the clock can start earlier than people expect. Talk to an attorney promptly to avoid losing the claim to the statute of limitations.