Economic Torts

What is meant by an economic tort?

Economic torts concern intentional harm to a person’s or firm’s business interests and are frequently in the context of industrial disputes or unfair competition.  A cause of action based on an economic tort is usually made in addition to another claim and it is very unusual for it to be the primary basis of a claim.

What are the Economic Torts?

Deliberate interference with another party’s interests is usually broken down into the following categories, the so called economic torts:

  • Inducement to breach contract – this can be done directly or indirectly

  • Intimidation

  • Conspiracy – this included conspiracy to commit an unlawful act or to use unlawful means and conspiracy to injure

  • Unlawful interference with economic business interests

Inducement to breach contract

What is meant by Inducement to breach a contract?

This is whereby one individual has caused harm to a third party by persuading a contract involving that third party to be broken.

Inducement to breach a contract can be broken down into the following three scenarios:

  1. The defendant persuades a third party to break a contract with the claimant. This usually occurs when the third party is offered more money to fulfil a similar contract elsewhere.

  2. By unlawful means the defendant prevents performance of the contract. A good example of this is where the defendant may have hidden the tools of the claimant thereby rendering him unable to fulfil the contract.

  3. The defendant has induced a fourth party to break his contract with a third party who as a consequence is unable to perform his contract for the claimant. An example of this is where a union may instruct employees (the fourth party) of the third party not to handle the goods of the claimant. The contract is between the third party and the claimant with the fourth party the employees of the third party induced to break their contract of employment.*

*For this third case to occur the defendant must be aware of the contract between the claimant and the third party and endeavour to cause a breach by contacting the fourth party.

Intimidation

What is meant by Intimidation?

In order to succeed with a claim of intimidation the following four elements need to be established:

  1. A threat to the third party that is coercive in nature and which is said to be more than a mere warning

  2. The threat to do something must be unlawful, for example a crime, tort or breach of contract

  3. The third party must have complied with the threat and have done what was asked

  4. There must be damage suffered due to the threat

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For more information on:

  • Conspiracy
  • What is meant by Conspiracy?
  • Two or more persons
  • Agreement
  • Unlawful Act
  • Lawful Act by unlawful means
  • Unlawful Interference with Economic Business Interests
  • What is meant by unlawful interference?
  • Passing Off
  • Remedies