Lesson 37: Interference with Prospective Economic Advantage

Interference with prospective economic advantage, also known as interference with prospective business advantage, is a tort that involves the intentional disruption of a plaintiff's potential business relationships or economic gain.

Understanding the Elements

To establish a claim for interference with prospective economic advantage, the plaintiff must typically prove the following elements:

1. The existence of a prospective economic relationship or advantage between the plaintiff and a third party.
2. The defendant's knowledge of this relationship or advantage.
3. Intentional and wrongful acts by the defendant designed to disrupt this relationship or advantage.
4. Actual disruption of the relationship or advantage.
5. Economic harm to the plaintiff caused by the defendant's wrongful acts.

  1. The existence of a prospective economic relationship or advantage between the plaintiff and a third party.
  2. The defendant's knowledge of this relationship or advantage.
  3. Intentional and wrongful acts by the defendant designed to disrupt this relationship or advantage.
  4. Actual disruption of the relationship or advantage.
  5. Economic harm to the plaintiff caused by the defendant's wrongful acts.

Example Scenario

Consider a situation where Company A has been in negotiations with a potential client for a lucrative contract. Company B, a competitor, learns about the negotiations and intentionally spreads false rumors about Company A's financial instability to the potential client. As a result, the client decides not to proceed with the contract with Company A and instead chooses to engage with Company B. Company A may have a valid claim for interference with prospective economic advantage against Company B.

For a humorous take on similar scenarios, check out "Law and Economics in a Nutshell" by Jeffrey L. Harrison.

Mermaid Diagram: Elements of the Tort

graph TD A["Prospective Economic Relationship"] --> B["Defendant's Knowledge"] B --> C["Intentional and Wrongful Acts"] C --> D["Actual Disruption"] D --> E["Economic Harm to Plaintiff"]

Legal Insights

Courts often require the plaintiff to demonstrate that the defendant's actions were not only intentional but also independently wrongful. This means that the defendant's conduct must violate some legal standard, such as a statute or established public policy.

Defenses

Common defenses against a claim for interference with prospective economic advantage include:

  • Justification or Privilege: The defendant's actions were legally justified, such as protecting a legitimate business interest.
  • Absence of Intent: The defendant did not intend to disrupt the plaintiff's prospective economic relationship.
  • Absence of Wrongful Conduct: The defendant's actions were not independently wrongful.

Further Reading

For more information on related topics, consider reading our articles on Interference with Contractual Relations and Defenses to Economic Torts.

To understand how this tort fits within the larger context of torts law, check out our introductory article on What is Torts Law?.

For a deeper dive into torts law, consider reading "Understanding Torts" by John L. Diamond.

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