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What is Interference with Business Relations in Massachusetts?

The tort claim of interference with business relations allows a wronged plaintiff to recover damages in situations where a third party defendant causes a breach of contract or otherwise interferes with business dealings between two people or entities.

Take the following scenario as an example:

A nonprofit organization in Massachusetts hired a contract lobbyist to advance legislation and regulatory change in alignment with the mission of the nonprofit organization’s work. As such, the nonprofit organization and the lobbyist had a signed and valid contractual relationship. When the relationship was formed, another nonprofit organization learned of the new relationship and became angry and jealous for two reasons. First, the lobbyist was deeply connected and had significant power in the legislative arena. Finally, the organization was upset that the nonprofit organization with the lobbyist might become more politically powerful.

Out of spite and because of fear, some of the members of the nonprofit organization without the lobbyist began to act in harmful ways. Specifically, one of the employees began to spread lies about members of the nonprofit organization with the lobbyist and some of the members within it. Additionally, the spiteful members of the organization began to speak negatively toward the members of the nonprofit organization with the lobbyist, describing to everyone and anyone that the organization and its members is “out of touch” or “extreme” or “immature.”

In addition, the spiteful organization also began to talk with the nonprofit organization’s donors in an effort to usurp them. These spiteful members allege that they acted within the scope of their responsibilities and that there efforts were related to a legitimate corporate interest. As a result of this chaos, the members of the legislature as well as donors and other stakeholders began to question the legitimacy and character of the nonprofit organization. This resulted in no legislative or regulatory success. It also resulted in a lowered donation rate from their donors. Can the nonprofit organization with the lobbyist find any recourse?

Massachusetts law supports the relief from the interference with business relations. The legal standard is as follows:

  • First, there must be a valid contractual relationship between one party and another party, or a valid business expectancy of the party, or plaintiff.

  • Second, the defendant must have knowledge of a relationship between one party and the other party. Or, the defendant must have knowledge about the expectancy by the party.

  • Third, the defendant must intentionally interfere with the relationship or expectancy. The defendant must act with improper motive or means so as to interfere. If the defendant is a corporate official acting within the scope of responsibilities, the victim party (plaintiff) must show actual malice. Actual malice means that the defendant had a spiteful or malignant purpose for interfering. This purpose must be unrelated to legitimate corporate interests.

  • Finally, the victim party (plaintiff) must have damages.

In the case above, the nonprofit organization that hired the lobbyist may have a solid case against the spiteful organization. As the facts establish, the nonprofit organization had a valid contractual relationship with the lobbyist that it hired. Also, the spiteful organization knew that the lobbyist had been hired by the organization. This angered some of the members of the spiteful organization. Because of this relationship and the fear that the nonprofit organization and the lobbyist might become too powerful, the spiteful group acted with improper motive to interfere with this relationship and the success that the nonprofit organization might have in effecting legislative or regulatory change. This improper motive was to better itself. The improper means was by spreading defamatory words to elected leaders, donors, and other stakeholders. As a result of the interference, the nonprofit organization lost strength and monetary support. Because of this, the nonprofit organization with the lobbyist may have a solid case against the spiteful organization or members working for the organization who acted in these ways.

One challenge in this type of matter is the showing the amount of damages. As damages are typically an objective measure, the loss of reputation might be hard for many individuals or entities to prove. If, however, someone submits an affidavit stating that he or she would have donated but for the words spread by the spiteful organization, then that might address any concerns related to damages.

If you have any questions about issues involving tort law, business law, or other injuries, you should contact a competent attorney licensed to practice law in Massachusetts. Our experienced professionals may be able to work on your behalf. Please contact our offices at your earliest convenience by phone at 978-225-9030 or complete a contact form on our website, and we will respond to you as early as possible.

The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

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