Interference: Overview, definition, and example
What is interference?
Interference refers to any action that disrupts, obstructs, or negatively impacts another party’s rights, business, or contractual obligations. It can occur in various legal and business contexts, such as contract disputes, business operations, or employment relationships.
Interference is often categorized into two main types:
- Tortious interference – When a third party unlawfully disrupts a contract or business relationship between two other parties.
- Interference in performance – When one party hinders another’s ability to fulfill their contractual obligations.
Interference can lead to legal liability, including financial damages, if it results in lost opportunities, reputational harm, or breach of contract.
Why is interference important?
Preventing interference is crucial in maintaining fair business practices, protecting contractual rights, and ensuring smooth business operations. When interference occurs, it can result in financial losses, damaged relationships, and legal disputes.
For example, if a competitor wrongfully persuades a client to break an existing contract with another business, the affected party may have grounds for a legal claim based on interference. Similarly, a landlord interfering with a tenant’s business operations in a leased space could be held liable for financial damages.
Understanding interference through an example
Imagine a company signs a contract with a supplier to provide raw materials for manufacturing. A competitor, aware of this deal, offers the supplier a higher price to stop supplying materials to the company. As a result, the supplier breaks the contract, causing production delays and financial losses.
In this case, the competitor has committed tortious interference by deliberately disrupting an existing contractual relationship. The affected company could pursue legal action to recover damages from the competitor.
An example of an interference clause
Here’s an example of how interference might be addressed in a contract:
“Each Party agrees not to interfere, directly or indirectly, with the contractual, business, or financial relationships of the other Party. Any actions that cause disruption, obstruction, or breach of contractual obligations shall be considered a material violation of this Agreement and may result in legal action and damages.”
Conclusion
Interference can lead to serious legal and financial consequences if it disrupts contracts, business operations, or relationships. Protecting against interference helps businesses maintain stability and enforce their contractual rights.
Before entering into agreements, ensure there are protections against interference—because preventing disruptions today can safeguard business success tomorrow.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.