Tortious Interference with Prospective Contractual Relations

The Restatement Second of Torts § 766B sets forth an explanation of a claim for tortious interference with prospective contractual relations. Section 766B states,

one who intentionally and improperly interferes with another’s prospective contractual relation is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relations, whether the interference consists of: a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or b) preventing the other from acquiring or continuing the prospective relation.

Under Minnesota law the elements of a claim for tortious interference with prospective contractual relations are,

1) the existence of a reasonable expectation of economic advantage,

2) the defendant had knowledge of that expectation of economic advantage,

3) the defendant wrongfully and without justification interfered with the plaintiff’s reasonable expectation of economic advantage or benefit,

4) that in the absence of the wrongful act of the defendant it is reasonably probable that the plaintiff would have realized his economic advantage or benefit, and

5) that the plaintiff sustained damages as a result of this activity.

Harbor Broadcasting, Inc. v. Boundary Waters Broadcasters, Inc., 636 NW 2nd 560, 569 (Minn. App. 2001).

Reasonable Expectation of Economic Advantage or Benefit Belonging to the Plaintiff

There are not many cases that discuss this element. However, a mere loss of unspecified business does not establish the intentional interference with prospective business relations. H. Enters Int’l, Inc. v. Gen. Elec. Capital Corp., 833 F.Supp 1405, 1417 (D. Minn. 1993). A plaintiff must give evidence of an inference that the plaintiff did indeed have a reasonable expectation of economic advantage or benefit before any interference by the defendant.

Defendant’s Knowledge of the Expectation of Economic Advantage

This element is similar to a defendant’s knowledge in a tortious interference with contract claim. Both the knowledge of a defendant in a tortious interference with contract claim and a tortious interference with prospective contractual relations are analyzed similarly. So, to establish a defendant’s knowledge of the prospective contractual relations, a plaintiff must show that the defendant had knowledge of facts which, if followed by a reasonable inquiry, would have led to the complete disclosure of the prospective contractual relation. Similarly to the knowledge element under the tortious interference of contract claim, it is not necessary for a plaintiff to show that the defendant possessed actual knowledge of the prospective contractual relation. Constructive knowledge of the prospective contractual relation is sufficient.

Interference with the Reasonable Expectation of Economic Advantage or Benefit

This element requires evidence that a defendant’s interference with the economic advantage or benefit was intentional and without justification. Any evidence showing merely negligent interference with a business relationship is not enough. This element heavily turns on the facts of every circumstance. It is important to keep in mind, however, that some conduct from a defendant that seems to interfere with a plaintiff’s reasonable expectation of economic advantage is permitted because it is done in the interest of promoting competition, which Minnesota law favors.

Reasonable Probability that a Plaintiff Would Realize Economic Advantage But For the Defendant’s Wrongful Act

It is not enough for a plaintiff to show that a defendant interfered. A plaintiff must also provide evidence that there is a reasonable probability that they would have realized economic advantage or benefit in the absence of the defendant’s wrongful act. Pure speculation regarding a plaintiff’s advantage or benefit is not enough to satisfy this element.

Damages

Lastly, a plaintiff must establish that they have been injured or suffered damages because of the interference of the defendant. A way to satisfy this element is for a plaintiff to show that they lost business revenue because of the acts of the defendant.