Securing a new contract with another company can require months of negotiations and careful preparation. Growing businesses may invest heavily in competing for a contract with an outside party.
When the time comes to sign the final agreement, everything may fall apart with minimal prior warning. In some cases, a business partner disappointed by a contract that never materialized may eventually learn that their partner interfered with the organization’s contract acquisition.
If they have an interest in another business or a professional practice, they may have acquired the opportunity for themselves at the expense of the business. That misconduct might necessitate litigation to terminate the partnership and address the losses generated.
Tortious contract interference is actionable
Intentionally interfering in business operations for personal gain can constitute a business tort. While there are no rules outright preventing business executives and partners from seeking opportunities for other businesses in which they have invested or a professional practice, they should not use their position within an organization to gain insight or leverage.
They also need to avoid acts that breach their fiduciary duty to the company. The decision to intervene in a contract almost secured for the company for personal gain can constitute an actionable breach of fiduciary duty and a serious business tort.
Partners frustrated when they discover that someone they trusted undermined their company’s success may need to take legal action in response. Reviewing the investments made to secure a contract and the conduct of their partner can help remedy the situation and prevent future breaches of duty that could further harm the organization. Business litigation to resolve the dispute may be the best option available.
