Tortious Interference with Contractual Relations in Maryland

While most people are aware that you can successfully sue someone for breaching a contract with you, most people are unaware that you can successfully sue a third party for interfering with your contract with a different entity or person. Maryland law, like many other states such as Washington, DC, includes a legal cause of action known as tortious interference with contractual relations (also known as intentional interference with contractual relations). Through Maryland’s tortious interference with contractual relations, a party can seek damages in court against a person or entity that has caused one of their contractual relationships to be terminated. To establish tortious interference with contractual relations in Maryland, a plaintiff must show:

1. The existence of a contract;
2. The defendant’s knowledge of the existence of the contract;
3. Intentional and improper conduct by the defendant which induced a third party to breach the contract or make the contract impossible to perform;
4. The third party’s ultimate breach or non-performance of the contract; and
5. Damages resulting from the breach or non-performance of the contract.

Some important points to note about tortious interference with contractual relations in Maryland include:

• “Tortious or deliberate intent to harm a plaintiff’s business relationship is not alone sufficient to support an intentional interference claim.” Lyon v. Campbell
• For an intentional interference with contractual relations claim to defeat summary judgment in Maryland, a plaintiff must provide some support for the fact that the defendant’s conduct was “independently wrongful or unlawful, quite apart from its effect on the plaintiff’s business relationships.”
• “Unlike some jurisdictions, the [Maryland] Court of Appeals has required not only a specific purpose to interfere but also that the interfering conduct be independently wrongful or unlawful.” Thacker v. City of Hyattsville
• For one to recover for tortious interference with contractual or economic relations, “the interference must have been wrongful or unlawful.” Travelers Indemnity v. Merling
• In describing the types of acts that are considered “wrongful or unlawful,” the Maryland Court of Appeals has stated that “Wrongful or unlawful acts include common law torts and violence or intimidation, defamation, injurious falsehood or other fraud, violation of criminal law, and the institution or threat of groundless civil suits or criminal prosecutions in bad faith.” Alexander & Alexander Inc. v. B. Dixon Evander & Associates, Inc.
• Further, to sustain an action for intentional interference of contractual relations, “the improper or wrongful conduct must induce the breach or termination of the contract.”  Macklin v. Robert Logan Associates
• “[A] competitor who intentionally causes a third person not to continue an existing contract terminable at will does not improperly interfere with the contractual relation if no wrongful means are employed.”  Macklin v. Robert Logan Associates
• “[U]nder Maryland law, one who, regardless of motive, causes harm to another merely by refusing to continue a business relationship terminable at will is not liable for that harm.” Lyon v. Campbell
• A defendant cannot tortiously interfere with another’s contractual relations if that defendant was unaware of the plaintiff’s existence, or the existence of the alleged contractual relationship..

There is also a cause of action in Maryland for interference with business relations. This cause of action is similar to tortious interference with contractual relations; however, the existence of a contract is not necessary. Under this Maryland tort, a prospective plaintiff must show (1) that a defendant performed intentional or willful acts, (2) that the acts were reasonably calculated to cause damages to plaintiff’s business, (3) that the acts were done with the unlawful purpose to cause damages without cause, and (4) that actual damages resulted from the acts.

Overall, it is important to note that this business-related cause of action for interfering with another’s contractual relations exists in Maryland (as well as most other states including Washington, DC). However, it is also important to realize that many proper defenses exist to challenge to such interference allegations, and Maryland Courts have described these various legal defenses which are available to someone accused of intentional interference with contractual relations.

 

Adam Van Grack and the other business litigation attorneys at Longman & Van Grack have represented many parties related to interference of contract disputes, interference with business relations, and all types of contract disputes in Maryland and Washington, DC. Call (301) 291-5027 to speak with Mr. Van Grack or one of our other contract attorneys at Longman & Van Grack’s Bethesda, Maryland; Rockville, Maryland; or Washington, DC offices.