TOPIC OF THE DAY
- THE MEANING OF INTERFERENCE WITH CONTRACTS
- THE ELEMENTS OF INTERFERENCE WITH CONTRACTS
- THE DEFENCES FOR INTERFERENCE WITH CONTRACTS
- THE REMEDIES FOR INTERFERENCE WITH CONTRACTS
THE MEANING OF INTERFERENCE WITH CONTRACTS
Interference with contracts refers to actions that intentionally disrupt contractual relationships between parties. It typically involves a third party enticing, inducing, or persuading one of the contracting parties to breach the contract. This interference can take various forms, such as providing incentives to breach, making false statements about the contract, or exerting pressure to terminate the agreement. See the case of Lumley v. Gye (1853) which stablished the principle that inducing breach of contract can lead to legal liability, the case of Mogul Steamship Co. v. McGregor Gow & Co.(1892) which highlighted the concept of lawful competition versus actionable interference and Allen v. Flood (1898) which established the principle of lawful competition as a defense against interference claims.
THE ELEMENTS OF INTERFERENCE WITH CONTRACTS
Interference with contracts involves certain key elements, including:
1. Existence of a Valid Contract: There must be a legally binding contract between two parties.
2. Intentional Interference: The interference must be deliberate and purposeful, aiming to disrupt the contractual relationship.
3. Causation of Breach: The interference must directly cause one of the parties to breach the contract.
4. Damages: The breach must result in damages to the non-breaching party, such as financial loss.
THE DEFENCES FOR INTERFERENCE WITH CONTRACTS
Defenses for interference with contracts include:
1. Justification: If the interfering party had a valid reason or justification for their actions, such as protecting their own rights or responding to unlawful behavior by the other contracting party.
2. Legitimate Competition: If the actions were part of legitimate competition in the market and did not involve wrongful or malicious conduct.
3. No Knowledge of Contract: If the interfering party was unaware of the existence of the contract and did not intentionally interfere with it.
4. Privilege: In certain circumstances, such as situations involving public policy considerations or legal duties, the interfering party may have a privileged status.
THE REMEDIES FOR INTERFERENCE WITH CONTRACTS
Remedies for interference with contracts aim to compensate the injured party and may include:
1. Damages: Monetary compensation to cover financial losses resulting from the interference, such as lost profits or expenses incurred due to the breach.
2. Injunctions: Court orders prohibiting the interfering party from further actions that could harm the contractual relationship, such as continuing to induce breach of contract.
3. Specific Performance: In cases where monetary damages are inadequate, the court may order the breaching party to fulfill their contractual obligations as originally agreed.
4. Rescission: The contract may be declared void if the interference renders it impossible or impracticable to continue, and parties may be restored to their pre-contractual positions.