When a third party wrongfully and intentionally interferes with the contractual relations or legitimate business expectancies of another, we recommend meeting with our team of Virginia civil litigation lawyers at MartinWren, P.C. for assistance. The law provides that such actions are tortious and become legally prohibited interference.
Virginia Law Regarding Contracts
Under Virginia law, if a contract is for a stated period or duration, the parties have defined rights and responsibilities, and the law has low tolerance for third-party interference. A claim of tortious interferences requires evidence of:
- the existence of a contract or business expectancy;
- knowledge of that contract or expectancy by a third party;
- intentional interference by the third party inducing or causing a breach or termination of the relationship or expectancy; and
- resulting damages.
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Terminable At Will Contracts
If the contractual parties can end the contractual relationship at any time, the contract is “terminable at will,” and Virginia law is much more forgiving of interference with the relationship. For disputes over such contracts, getting representation from Tortious Interference Attorneys in Virginia may be necessary in order to find a resolution or seek damages.
Improper Interference
Examples of improper means or methods of interference include violence, threats or intimidation, bribery, unfounded litigation, fraud, misrepresentation or deceit, defamation, duress, undue influence, misuse of inside or confidential information, or breach of fiduciary relationship. Courts may also explore whether the method of interference violates a professional or trade standard.
How Tortious Interference Happens
Tortious interference with a contract may happen in a variety of ways. It could occur when a vendor intentionally induces a purchaser to breach an agreement with another vendor in order to usurp the business opportunity or simply to financially punish a competitor. Tortious Interference Attorneys in VA can offer legal advice if a third party convinced an employer to breach its employment agreement based on false statements about the employee. Another example may be where a holdover tenant intentionally prevents the new lessee from taking possession of the property.
Claims for tortious interference often arise in the employment context when an employee is subject to a non-compete agreement or a non-solicitation agreement. If a competitor hires that employee to work in a manner that violates the non-compete agreement, the former employer may sue the competitor for tortious interference.
Unfair Competition Laws
Unfair competition is defined as using wrongful or deceptive business practices that result in harming other businesses or consumers. There are Federal and state laws in place to protect the creative, economic, and intellectual investments that a business makes when creating their product and the persona of their business. These laws were created to prevent other businesses from participating in any unfair practices that occur in a business setting.
Fair competition between businesses is good for the consumer and for our market as a whole. This is one reason our free market system protects legitimate competitive economic activity. Trademark infringement, copyrights, and false advertising are often covered under federal laws while states take the role of governing other forms of unfair competition. If the situation covers both state and Federal laws, the Federal law will supersede the state law. Here are other facets addressed under the unfair competition laws:
The Exhaustion Doctrine
This law lets a distributor market a product in its original, branded state. The distributor is also allowed to advertise this product. However, the distributor must properly clarify the connection to the owner of the product. For example, a beer that is distributed by another company must display on the label “distributed by…”. If this distinction is not clearly marked, the owner of the brand could take legal action against the distributor.
Express Reverse Passing Off
This happens when an individual or company remove the branding from a product that is for sale, trying to make the product look like another product. The individual or company then rebrand the item to make it look like it was their own.
Unfair Competition Examples
Economic torts (civil wrongs) or business torts are rules or laws that address liability in business transactions concerning interference with business or economic relationships that can result in economic losses. Virginia Tortious Interference Attorneys from MartinWren, P.C. can explain to clients about the several business torts included under the unfair competition umbrella:
- False Advertising: Misrepresenting a product by exaggerating its benefits or claiming a product has certain healing qualities when it obviously does not.
- False Representation of Services of Products: Guaranteeing the quality or performance of a product or service or not making good of a guarantee or warranty.
- Trademark Infringement: Using someone else’s trademark on a product or service that clearly does not belong to that business.
- Trade Secret Misappropriation: Using someone else’s recipe or protected ingredients and using them for your own financial gain.
- Bait and Switch: Substituting a lower-cost product from one brand for a costlier higher-quality product.
- Trade Dress Violation: Copying the packaging and/or physical appearing of a product to trick a consumer into purchasing it.
- Breach of a Restrictive Covenant: An example of this is the breach of a non-compete clause.
- Unauthorized Substitution of One Brand or Product for Another
- Counterfeiting or Imitation
- Selling Below Cost
Damage Considerations and Remedies
The court will look at several factors when determining what type of damage to award the plaintiff if they are successful in an unfair competition lawsuit:
- How many previous violations
- The seriousness and nature of the violation
- Length of time of the violation
- Did the defendant willfully violate unfair competition laws?
- What is the defendant’s net worth?
Tortious interference is a somewhat complicated tort, and there are many valid defenses that may apply. Independent legal advice and analysis from VA Tortious Interference Attorneys at MartinWren, P.C. is important when a business is facing a claim that they have tortiously interfered with a contract. And suits for tortious interference usually involve allegations of collusion by parties, which may form the basis for business conspiracy and similar claims.
If your business is suffering due to another’s interference with contractual relations or business expectancy, or if you or your business have been accused of interfering in such a way, call our law firm immediately. Serving professionals and the business community, our team has extensive experience in these businesses claims among competitors, disgruntled former employees, and others who may be involved in a tortious interference matter with existing or prospective business relationships. Contact Tortious Interference Attorneys in Virginia at MartinWren, P.C. today by dialing 434-817-3100, and ask for either Robert E. Byrne, Jr. or John B. Simpson.
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