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It’s Not Personal. It’s Business. Or is it…


It’s not personal. It’s business. Ah… the Godfather, of course you shed some light on tort law in North Carolina. This is actually not a bad way to think about these first two business torts in North Carolina. Parties can interfere with deals – or prospective deals – in a lawful manner so long as it is done for a significant business interest without being subject to tort liability. However, when it gets personal – and no the “it’s always personal to me, it’s MY business” claim is not going to be effective – companies should be aware of the business tort of tortious interference with prospective economic advantage.

Tortious interference with prospective economic advantage is the next stop on our dizzying run through North Carolina’s business torts. The primary difference between tortious interference with contract and tortious interference with prospective economic advantage is the presence of a contract. What the “prospective economic advantage” refers to is where a competitor maliciously acts to keep a party from entering into a contract which they would have entered into if not for the actions of that third party. For example, A and B are about to enter into a contract. A’s competitor C tells B untrue disparaging facts about A. B backs out of its deal with A. A would have a claim against C for tortious interference with prospective economic advantage.

So here’s what a business would have to prove in order to state a claim on these grounds. The business would have to show that 1) that the Defendant induced a third party to refrain from entering into a contract; 2) without justification; 3) that would have been entered into but for the Defendant’s conduct.

The key for a business being charged with tortious interference with a prospective economic advantage is whether or not there was a legitimate business purpose associated with their actions. So long as the act is A) lawful; and B) done to further the interests of their own business, the defendant company would be in the clear.

The steps are very similar to the tortious interference with contract claim discussed earlier this week. And if there is some dispute about whether or not there was a contract between A and B at the point that C interfered, a business could sue on both of these grounds as an alternative remedy.

The most important thing to remember for these first two business torts is the justification requirement. Plaintiff businesses will have to show that the actions which harmed them were malicious and had nothing to do with business. Defendant businesses will attempt to show that their actions were done simply to further their own company’s interests. It’s nothing personal, they’ll say, just business. If that’s true – and the act itself was lawful – there would be no claim.

If your business is involved in a dispute with a competitor regarding actions by one of the companies, contact Maginnis Law, PLLC to discuss your next steps. Maginnis Law is based in Raleigh, but also practices in Cary, Morrisville, Wake Forest, Holly Springs and the rest of the Triangle area. Contact the firm at 919.526.0450 or visit our website at www.maginnislaw.com for more information.

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