Large corporations with significant financial resources and influence sometimes exploit their power at the expense of smaller businesses. One common tactic is interfering with contracts between smaller companies to gain a competitive edge or marginally increase their profits—often without regard for the damage they cause. However, small businesses are not without recourse. The legal theory of intentional interference with business relationships exists to protect companies from such unfair practices. If your business has been harmed by the deliberate actions of a larger entity, you may have the right to seek compensation and hold them accountable under this law.
To protect small businesses from unfair practices, it is essential to understand the key elements of the legal theory known as intentional interference with business. First, there must be a valid and enforceable contract between the small business (the plaintiff) and a third party. Second, the defendant must be aware of this contract and understand its significance. Third, the defendant must have intentionally interfered with the contractual relationship. Finally, the small business must have suffered damages as a result of that interference. All four elements must be clearly established for a small business to seek legal protection and compensation under this theory.
There are many situations where large corporations interfere with smaller companies’ contracts with third parties. Here, I will provide a common scenario. In this example, a large corporation (Company A) hires a smaller business (Company B) for IT consulting purposes. Then, Company B hires a subcontractor (Person C) who specializes in this area of consulting.
If a company intentionally causes someone to break a contract with another business, it may be liable for intentional interference with contractual relations. For example, if Company A learns that Person C is under contract with Company B but still offers Person C a direct deal that leads them to breach their agreement with Company B, Company A could be held responsible for interfering. In such cases, Company B may seek compensation for damages such as lost profits, lost customers, and the loss of benefits originally expected from the contract. This type of interference is a serious legal matter, and businesses affected by it should consult a lawyer immediately to understand their rights and pursue appropriate remedies.
In conclusion, it is important to understand one’s rights to protect your interests and prevent major damages. Having knowledge about the intentional interference with business theory can help you prevent larger businesses from taking advantage of you or your business.