Tortious Interference with Contract Claims in Business and Commercial Litigation

Our Chicago Business Litigation Attorneys have prosecuted and defended business tort claims in many different types of Chicago Business Dispute lawsuits. We successfully defended Joseph Gentile for whom Loyola University’s basketball arena is named after when the fired coach claimed Gentile had caused his termination. We obtained a dismissal of that suit. You can read about our successful record in business litigation here and can view testimonials from our past clients here.

The requisite elements of tortious interference with contract claim are: (1) the existence of a valid and enforceable contract between plaintiff and another; (2) defendant’s awareness of the contractual relationship; (3) defendant’s intentional and unjustified inducement of a breach of the contract; (4) a subsequent breach by the other caused by defendant’s wrongful conduct; and (5) damages.

Exercising of constitutional free speech rights to justifiably and in good faith express a negative opinion, such as when our client Joseph Gentile expressed his dissatisfaction with the then Loyola basketball coach, cannot give rise to a tortious interference with contract claim. In re Estate of Albergo, 275 IllApp3d 439 (2nd Dist. 1995) (giving honest advice is constitutionally privileged and cannot give rise to a claim for tortious interference with contract); Audition Div., Ltd. v. Better Business Bureau, 120 IllApp3d 254 (1st Dist. 1983) (same).

Wrongful or illegal conduct, such a defaming a product or a sellers’ services with false negative characteristics, must be shown to win a claim for tortious interference with contract. Litigation that is unfounded, use criminal extortion or violence, bribery or fraud and deceit, or conduct that violates anti-trust laws to cause a breach of contract also give rise to tortious interference claims. The conduct must constitute unfair competitive conduct. On the other hand, conduct consistent with aggressive competition, such as, discontinuing a product or ending a contractual relationship where such termination or discontinuance is not accompanied wrongful or illegal conduct designed specifically cause the plaintiff financial harm—is not actionable. It is simply expected conduct in a free market economy.

There are a host of privilege defenses to tortious interference claims. Interference can be privileged when the defendant is motivated to protect a substantial interest based on an objectively reasonable and good faith belief that defendant’s interest will be harmed by performance of the contract and the defendant does not employ improper, deceptive or other unjust means to interfere.

A qualified privilege also bars liability for tortious interference claims against corporate officers and directors. HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill2d 145, 157 (1989). Illinois courts recognize a privilege for corporate officers and directors to use their business judgment and discretion on behalf of their corporations. The duty of corporate officers and directors to their corporations’ shareholders outweighs any duty they may have towards parties contracting with the corporation. IOS Capital, Inc. v. Phoenix Printing, Inc., 348 IllApp3d 366, 371 (4th Dist 2004). Because officers and directors owe fiduciary duties to the corporation and its shareholders, their freedom of action aimed toward corporate benefit should not be curtailed by undue fear of liability. Directors and officers must be free to act in pursuit of what they faithfully believe to be in their corporation’s best interests.

To overcome the qualified privilege of a corporate officer, a plaintiff must show that the corporate officer’s action was done without justification or with actual malice. MGD, Inc. v. Dalen Trading Co., 230 IllApp3d 916, 920 (1st Dist 1992). The Illinois Supreme Court “has repeatedly stated that where the conduct of a defendant in an interference with contract action was privileged, it is the plaintiff's burden to plead and prove that the defendant's conduct was unjustified or malicious”. HPI Health Care, 131 Ill2d at 156, 545 NE2d at 677; Citylink Group, Ltd. v. Hyatt Corp., 313 IllApp3d 829, 840, 729 NE2d 869, 877-878 (1st Dist 2000) (“To overcome the privilege, plaintiffs must allege or prove that a defendant acted in its own interests and contrary to the interests of its principal, or engage in conduct totally unrelated or antagonistic to the interest giving rise to the privilege.”).

“Actual malice” is a positive desire or intent to injure another, and in the context of a charge of tortious interference with a contractual relationship, the plaintiff must show that the desire to harm was unrelated to the interests of the corporation. MGD, Inc., 230 IllApp3d at 920, 596 NE2d at 17-19. Bare allegations of actual malice, unsupported by facts, are not sufficient to negate the protections of privilege or unjustified conduct. Id.; Clarage v. Kuzma, 342 IllApp3d 573, 586 (3rd Dist 2003).

A complete privilege from being sued for tortious interference exists for an attorney who advises a client not to perform on a contract, even if the advice turns out to be wrong. n advice to a client that the client need not perform the alleged contractual obligation, even if the advice is and subjects the client to liability. Gold v. Vasileff, 160 Ill. App. 3d 125 (5th Dist. 1987).

Lubin Austermuehle’s Chicago Business Litigation Attorneys with offices in Chicago, Wilmette and Elmhurst have extensive experience litigating business tort claims for unfair competition, trade libel, tortious interference with contract and tortious interference with prospective business relations. We have defended and prosecuted such claims on behalf of our business clients and officers and directors of a number of corporations. We successfully achieved dismissal of tortious interference with contract claims brought against the President of a very large Chicago area real-estate developer. You can view our record as Chicago Business Litigation Lawyers here and can see client testimonials here. Call of our Chicago Business Dispute Attorneys for a free consultation at our toll-free number 630-333-0333. You can also contact us online.

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