Inducement of Breach of Contract vs. Intentional Interference with Business Relationships
Tennessee recognizes two distinct causes of action for a third parties' attempt to interfere in the relationship between a business and its clients. The first, Inducement of Breach of Contract, is a creature of statute. It applies where an individual induces the breach of an existing contract and subjects the liable party to treble damages. T.C.A. 47-50-109.
The second, Intentional Interference with Business Relationships, was recently recognized by the Tennessee Supreme Court. This tort applies where the plaintiff can show (1) there is an existing business relationship with a specific party or a prospective relationship with an identifiable class of persons, (2) the defendant has knowledge of that relationship and not simply an awareness of the plaintiff's business dealings with others in general, (3) the defendant's intent is to cause the breach or termination of the business relationship, (4) the defendant has an improper motive or utilized improper means, and (5) damages resulted from the tortious interference. Trau-Med of America Inc. v. Allstate Ins. Co., 71 S.W.3d 691, 701 (Tenn. 2002).
One or both of these causes of action may be available to a company who suffers damages from tortious interference.