In business litigation, it is common for parties to assert claims of breach of contract and, in the alternative, claims of tortious interference with a “business relationship.” Tortious interference is often asserted as a “back up” in case the contract claim fails. Tortious interference with an advantageous business relationship is essentially a claim that the opposing party engaged in unfair competition. Florida law, however, gives broad latitude to competitors to engage in competition, so long as the competitor uses lawful means and is not trying to unlawfully restrain trade. Peter Mavrick is a Fort Lauderdale business litigation attorney, and represents clients in business litigation in Miami, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.
In Jay v. Mobley, 783 So.2d 297 (Fla. 4th DCA 2001), the plaintiff (Jay) unsuccessfully tried to purchase a parcel of real property in West Palm Beach from the owner of the property (Mobley). Jay and Mobley exchanged letters concerning Jay’s purchase of the property. Before Jay could close on the property, Mobley’s tenant, Nugent, made an offer to buy the property, which Mobley accepted. Jay was upset that he did not acquire the property, and so he sued Mobley for breach of contract. The appellate court, however, determined that the exchange of letters between Jay and Mosely lacked too many essential terms to create binding contract. As one Florida appellate court has explained, “[t]he courts are simply not authorized to draft a contract for the parties when the parties themselves have failed to reach agreement on essential details.” Craig R. Weiner Assocs., Inc. v. Sherden, 444 So.2d 431 (Fla. 4th DCA 1983).
Although Jay lost on the breach of contract claim, he also sued the tenant, Nugent, for tortious interference with an advantageous business relationship. Jay’s tortious interference claim was based on an alleged business relationship between Jay and Mobley which “gave rise to an understanding” that “in all probability would have been completed” had Nugent not interfered. To win on this claim, Jay had to prove Nugent’s conduct was not “unjustified” within in the definition of the tort. In ISS Cleaning Servs. Group, Inc. v. Cosby, 745 So.2d 460 (Fla. 4th DCA 1999), Florida’s Fourth District Court of Appeal explained the elements of a tortious interference claim: “A party … must show 1) the existence of a business relationship, 2) knowledge of the relationship on the part of the defendant, 3) an intentional and unjustified interference with the relationship, and 4) damage to the plaintiff as a result of the tortious interference with the relationship. An action for tortious interference with a prospective business relationship requires a business relationship evidenced by an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered.”
Courts deciding business litigation claims of tortious interference do so by balancing two competing interests, i.e., on the one hand, the desire to protect the reasonable expectations of the parties to a business relationship, and on the other hand, the need to avoid excessive restrictions on the freedom of competition. Florida law recognizes competition between competitors, and if there is an interference with a non-exclusive right, this is a privileged interference (in other words, a lawfully allowed interference). Florida courts rely on section 768 of the Restatement (Second) of Torts (1979), which provides that: “(1) One who intentionally causes a third person not to enter a prospective contractual relation with another who is his competitor … does not interfere improperly with the other’s relation if (a) the relation concerns a matter involved in the competition between the actor[,] … (b) the actor does not employ wrongful means[,] … (c) his action does not create or continue an unlawful restraint on trade[,] and (d) his purpose is at least in part to advance his interest in competing with the other.” Based on these legal principles, Jay v. Mobley explained that Nugent was Jay’s competitor. As such, Nugent had the legal right to approach Mobley with a competing offer to buy the property. Because Nugent did not undertake any unjustified or wrongful interference, Jay failed to prove tortious interference.
Peter Mavrick is a Fort Lauderdale business litigation lawyer, and represents business litigation clients in Miami-Dade, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.