Business Litigation In New Mexico

Interference with Prospective Contracts in New Mexico

While tortious interference deals with claims made when a contract is already in place, there is another category for relationships that have not yet been made official. Interference with prospective contracts deals with just that—attempting to prevent a contract from being agreed to by two parties. As business disputes go, such conduct is illegal.

Interference with Prospective Contracts

It is difficult enough to start a new business but having a third party intentionally interfere with a new business with the intent to injure it is wrong. To prevail on a claim for tortious interference with prospective business relations or what is sometimes referred to as Interference with Prospective Contracts, the plaintiff must establish: 1) there was a reasonable probability that the plaintiff would have entered into a business relationship with a third party; 2) the defendant either acted with a conscious desire to prevent the relationship from occurring or knew the interference was certain or substantially certain to occur as a result of the conduct; 3) the defendant’s conduct was independently tortious or unlawful; 4) the interference proximately caused the plaintiff injury; and 5) the plaintiff suffered actual damage or loss as a result.

New Mexico Business Lawyers Assisting With Interference with Prospective Business Claims

Many different kinds of unfair business practices can harm small businesses and larger companies alike in New Mexico, and it is important to seek advice from an experienced Santa Fe business law attorney if another person or entity attempts to intentionally interfere with a business relationship you have established by using unlawful methods. One way in which a person or entity might try to intentionally interfere with one of your business relationships in an unlawful manner is through interference with prospective contracts, or interference with prospective economic advantage. If your business has an existing relationship with a third party that is likely to benefit your business economically, you may be able to file a claim if another person or entity interferes with that relationship and affects your ability to profit economically from the business relationship in the future. Our New Mexico interference with prospective contracts lawyers are here to help. 

What is Interference With Business?

The term “interference with prospective contracts” is one used in business law to refer to a particular kind of unfair business practice where an outside person or entity intentionally interferes with a business relationship that your company has developed and that is likely to be financially profitable for your business in the future. In many situations, this type of claim is also described as “intentional interference with prospective economic relations,” and you may also see it identified as “intentional interference with prospective business advantage” or “intentional interference with prospective contractual relations.” Depending upon the circumstance and the case, the language used to describe this type of unfair business practice may combine language from these various terms.

It is important to know that interference with prospective contracts or economic advantage is similar to but distinct from the related claim of interference with contractual relations. To have a claim for interference with prospective contracts or prospective business advantage, the business owner does not need to show that a contract already exists (which is a required element of a claim for interference with contractual relations, or inducing a breach of contract).

Elements of a Claim for Interference With Prospective Business

What are the claims for intentional interference with prospective contracts or prospective economic advantage? Under New Mexico law, a plaintiff is required to show that “there was an actual prospective contractual relation which, but for the defendant’s interference, would have been consummated.”

What does a business need to show in order to prove that “there was an actual prospective contractual relation which, but for the defendant’s interference, would have been consummated”? Generally speaking, a plaintiff must be able to show the following elements:

  • The plaintiff had a business relationship with the person or entity with whom there was the prospect of a contract; and
  • It was reasonable for the plaintiff to believe that a future, financially profitable relationship with that person or entity would have been profitable;
  • The defendant knew about the plaintiff’s business relationship;
  • The defendant acted with the intention of disrupting the plaintiff’s business relationship;
  • The plaintiff’s business relationship was disrupted due to the defendant’s interfering actions; and
  • The plaintiff suffered economic or other business harm as a result of the defendant’s interference.

To be clear, there is a need to show that a prospective contract was likely, rather than the existence of an actual business contract.

Damages for Interference With Prospective Business

Monetary damages are most common in these types of cases, which can include compensation for actual losses, as well as attorneys’ fees and court costs. Punitive damages are awarded only rarely in contract law cases, but it may be possible to seek punitive damages if the defendant’s actions were particularly egregious and malicious.

Contact Our Experienced Santa Fe Business Lawyers

Businesses spend a significant amount of time, energy, and money to develop strong relationships with clients and customers that are likely to be economically profitable in the short-term and in the long-term. Indeed, many businesses in New Mexico rely on strong relationships with third parties for their companies to remain in business and to continue serving the community. When another party attempts to interfere with future, economically profitable dealings between your business and a party with whom your business has developed a relationship, it may be possible to file a claim for interference with prospective contracts.

You should seek advice from our dedicated Santa Fe business law attorneys today to learn more about your options. Contact Slate Stern Law for more information about filing a claim for interference with prospective contracts or with prospective economic advantage.