Using Tortious Interference As A Justification For Litigation Against A Director

When prospective shareholders are forming an agreement, this is referred to as an "incorporation agreement" and leads to the formation of a corporation. However, there are also agreements that a corporation can enter into with a third party. When there is a breach of contract, the third-party would normally sue the corporation itself. However, there is one circumstance where the third-party can sue a director or third-party instead.

The Responsibilities of Running a Corporation

The day-to-day activities of a corporation are not run by shareholders. Instead, they are typically run by others within the organization. If the shareholders interfere with operations in any way or cause a breach of contract, they may be responsible for "tortious interference." 

To be guilty of tortious interference, the party must have a valid contract and the defendant must be aware of this contract. The defendant must intentionally procure the breaching of the contract without justification. The contract must then be breached and damages must result. 

There are no criminal penalties for tortious interference. Instead, those who engage in these actions are punished through a state contract and tort laws. The focus is only on remedying the situation after the actions of someone who is a non-party to the agreement.

Remedies for Tortious Interference

If you are the victim of tortious interference, you'll want to speak to a corporate lawyer about this so you can seek compensation for your injuries. You may be able to file more than one type of claim of tortious interference so that one claim might succeed if the other fails.

For example, you might believe that there was an interference with prospective economic advantage. In this case, you would argue that the third-party interfered with an economic arrangement even if this arrangement was not in the form of a contract. The third-party would need to know about the relationship. Then, using wrongful means, the third party would need to interfere with the contract. This interference would need to cause harm to your relationship.

If the third-party attempts to interfere with the purchasing of another business, for example, and they end up causing the deal to fall through, you may be able to receive compensation for the loss. However, your corporate lawyer will need to prove that the form of interference was improper. For example, a third party is allowed to compete with you but you may be able to prove that their actions crossed the line.

Contact a company, such as Carter and West law firm, for more information.