Interference with Relationships
Deliberate Interference with Contractual Rights
Generally, persons and corporates are entitled to compete in business in any way they see fit. However, certain deliberate acts may be unlawful and leave the party concerned liable to compensate a third party who has suffered economic loss as a result.
It is a civil wrong to interfere, deliberately, with a third party’s contractual relations. The scope of the civil wrong is limited because many legitimate business actions will have the consequence that a third party’s business or contractual interests may be adversely affected.
There is a distinction between advising and giving information and pressurising for and procuring a breach of contract. A person may be advised to terminate his employment in breach of contract. This is legitimate. Where, however, he is actually induced, persuaded or procured to breach his, the civil wrong may be committed.
Where a contract may be terminated by notice, it is not a civil wrong to induce a person to terminate his contract lawfully by notice. However, if the contract is, in fact, breached the person inducing the breach may be liable to the other party to the contract, even though it could have been terminated lawfully.
It is necessary to show knowledge and intention on the part of the defendant. Actual or so-called constructive (imputed or implied) knowledge of the contract will suffice. Constructive knowledge means that a reasonable person would have known that a contract existed. The defendant must intend or be reckless as to whether the contract will be breached.
Nature of Interference
The interference may manifest itself in different ways. Active persuasion or enticement to breach the contract are clear examples.
The wrongful act may be more indirect. It may involve actions or conduct, which is designed to prevent or interfere with the performance of the contract.
Indirect procurement can happen when a person induces a third party, who is not a party to the contract to d0 something which prevents the performance of the contract. This issue arises in relation to trade union disputes. For example, the blocking of an employer’s premises, so as to prevent deliveries or contract being performed may constitute a civil wrong. The breach of contract must have resulted as a direct result of the exhortation.
There is civil immunity for these civil wrongs, where there is industrial action in the course of lawful strike action. Where strike action is not lawful (e.g. unofficial action; no ballots) civil liability may arise. The issue may also arise in relation to secondary picketing at supplier’s premises or an all-out embargo seeking a boycott, which is generally beyond the scope of the immunity.
Inducing Breach of Contract,
A person who has unlawfully induced breach of contract is liable to compensate the innocent party to the contract for the losses arising as a natural and probable consequence of his actions. The other party is under a duty to mitigate.
The plaintiff must suffer loss and damage in consequence of the breach of contract. General principles of damages apply.
A recent Irish case has restated the key elements of the tort of inducement of breach of contract;
- that the defendant knew of the existence of the contract and intended to procure its breach;
- that the defendant definitely and unequivocally persuaded a party to breach the contract, with the intention of procuring the breach of the contract;
- that the person so persuaded, induced or procured, did, in fact, breach the contract; and
- that the breach ensued as a necessary consequence of the breach of the contract of employment.
Although the tort has most commonly arisen in the context of trade disputes, which commonly involve inducements of breach of employment of contract, it is not limited to contracts of employment. In principle, it may apply to any deliberate interference with a contractual relationship.
Inducement
Inducement involves persuading or encouraging a party to the contract to breach that contract. This may arise from a threat or ultimatum which causes the other party to breach. Some lesser inducement, having the same effect may suffice. There must be some positive procurement by way of pressure or persuasion. The communication of information in itself or knowledge of a statement of affairs is not sufficient.
It may be difficult to determine whether and what point, a person goes beyond advice or communication. The words used or conduct must be considered. Words, which in one context could be communicative, may in another context, constitute persuasion and inducement. Giving information or advice that incentivises the other to breach a contract in itself, is unlikely to constitute inducement of breach of contract.
Breach of Contract
There must be a breach of contract. Persuasion or inducement to another to terminate his contract in accordance with its terms is not sufficient. Most contracts are terminable on giving reasonable notice, in the absence of specific provision for a longer duration.
If an apparent contract is void, voidable or non-existent, then there cannot be a breach. Where there are relieving grounds either by general law or by the terms of the contract, termination will not constitute a breach, provided the right is properly invoked and used.
State of Knowledge and Intention
Courts usually take a subjective approach to whether the defendant had the requisite knowledge of the existence of the contract and that what he did, constituted an inducement to breach that contract. Generally, where a reasonable person would have been aware or should have been aware, this is strong evidence that the defendant was so aware. However, the defendant may be able to show that he was not in fact so aware.
Recklessness or wilful blindness may be sufficient to establish liability. It is not necessary that the person knows the specific terms of the contract. Knowledge of the broad types of terms which such contracts usually contain is likely to suffice. He may not deliberately disregard facts, particularly where he is in a position to ascertain the true position. Wilful blindness in this sense, is not a defence.
Some courts have held the respondent to be liable, where he ought to have known the existence and broad terms of the contract, in circumstances short of recklessness and wilful blindness.
A person may come on notice that there is a contract and that his actions constitute an inducement or persuasion to breach it. In this case, liability may be incurred, once the requisite knowledge or means of knowledge arises. A person may discover in the course of dealing, the existence of the other contract. Indeed, the party to the contract or the another may specifically inform him.
Although the person need not know the details of the contract, some knowledge that what is induced or persuaded, constitutes a breach of contract with legal consequences, appears to be necessary.
The degree of intention required is not completely settled. At one end of the spectrum, some courts have indicated that there should be a targeting by the defendant of the plaintiff. This approach has not been favoured and is likely to be too narrow. It appears that intention or recklessness as to whether there will be a breach of contract suffices for the purpose of establishing liability.
Defences I
A number of defences exist to the civil wrong of deliberate interference with contractual rights. In certain circumstances, there may be justification based on legitimate family or personal reasons.
There are a number of defences to the procurement of breach of contract. Historically, malice was an element of the tort. This has now been encompassed in the modern formulation of intention. Motive or ill will is not generally relevant.
There may be a number of defences by way of justification in respect of what would otherwise the tort. A personal interest or family connection may justify what would otherwise create liability. Persons may be persuaded, due to a familial interest in the welfare, care and future of a person, to undertake a particular course or to dissuade him from a particular course of action.
Where a person has a legitimate interest in protecting his own position, such as his own contractual rights, he may be justified in persuading another to do that which protects his own existing legal position and relationship, notwithstanding that this equally constitutes a breach of another inconsistent contract.
Where a person has entered two inconsistent contracts, the other party may insist on his contractual right even though this inevitable causes breach of the other contract. Where B as a result of a threat form A breaches his contract with C, C has no right to retaliate by inducing another person to breach his contract with A.
Defences II
Exceptionally, the public interest may be a justification.ublic interest may be a defence. In a famous case, a representative body failed to establish justification, in persuading employees who were highly exploited, to leave their employment. However, the courts are unwilling to allow public interest, other than in very exceptional, particular circumstances.
Public authorities or associations may be able to exercise a duty to protect the public. A private interest is only legitimate in limited circumstances.
Depriving Employers of Employees
There is an ancient legal action, whose modern status has not yet been clarified which arises where a person deprives an employer of the benefit of an employer, typically by causing him injury. Loss or damage must be shown. There are arguments that be action only applies to so-called menial employees or servants. The action was abolished in England and Wales in 1982
It may be that the legal action no longer survives in modern times. It was orignally based on the employee having property rights in his employee. There is a view that a might be regarded as unconstitutional in the modern context.
However, there is another view that the legal action still has a role in protecting a legitimate interest in a modern setting. For example, an employer may have invested in an employee so that if he deprived of his service by wrongful imprisonment or injury, the employer is thereby deprived of his services and suffers loss. An argument may be made that the employer has a legitimate right to be compensated by the third party which has committed the wrong.
Interference with Familial Relations
The Family Law Act 1981 abolished certain old long-standing civil wrongs; criminal conversation, enticement and harbouring of spouses. It also abolished an action for breach of contract to marry. The civil wrongs reflected the historically subordinate status of women. They no longer protect any legitimate interest in modern times.
Some older potentially anomalous torts still exist. The action for loss of consortium is a common law an action which a husband can / could take for a loss of his wife’s company and services. The claim applies to both a partial and complete loss of consortium. The surviving scope of the tort is unclear. Some aspects of it may be unconstitutional.
The English courts refused to extend the tort, to make it be available to a married woman in the 1950s, on the basis that it was already anomalous and should not be extended.
The Irish Supreme Court has upheld the tort in the 1990s, in a claim by a spouse and extended it to a married woman. In that case, the Supreme Court by a majority of two to one allowed a wife of a member of the Defence Forces who had been injured in an explosion causing sterility and impotence, to maintain a claim for consortium.
Later claims which sought to extend the tort to cover interference with familial relationships on the death of a parent have been rejected.
At common law, a husband could recover for medical expenses incurred by reason of an injury to his wife and the loss of domestic services. He could recover the cost of hiring domestic servant in substitution for a spouse’s services. These quantifiable losses were easily ascertained. However general damages are allowed for loss of a wife’s company. The loss of company might be constituted by separation.
The Supreme Court has suggested in one case that in the case of the fatal injury case, it should be an element of the special limited claim for non-material losses (capped at €35,000 arising on death for family members in aggregate, by reason of a civil wrong. This approach was later criticised and the case has been interpreted narrowly. Later cases indicate that there was not intended to be a fixed ceiling and in fact and awards have been made in excess of these ceiling afterwards.
The Law Reform Commission has considered the tort of loss of consortium. They recognise that despite of its anomalous historical nature, that it does protect legitimate family relationships.
Seduction
Seduction is an old and somewhat anomalous tort. It provides a civil action for the family of an unmarried female, who has had a child outside marriage, to obtain compensation from the child’s father. It also applies where the female had been removed from her family.
It is based on a notional service relationship between the parent and the role of the women concerned. The Law Reform Commission recommended its abolition over 30 years ago. It is not clear if the action is consistent with the Constitution.
Enticement
Enticement is similar anomalous common law tort. It applies where a person entices a child away from his parents or parent’s control. The action is open to the parents based on the notional loss of service.
The only precedents are old English precedents of considerable antiquity. It is necessary to show that the child left her home and that the defendant induced the child to do so.
The Law Reform Commission proposed amendments over 35 years ago which were not enacted. It is not clear if the tort is consistent with the Constitution.
Child’s Services
There is a common law claim for loss of child services caused by injuries inflicted or damage caused by another to the child. Its constitutional status is open to question.
Once again, it is based on notional domestic services provided by the child. Where actual services are provided, such as where a person is looking after the family member, that family member may have an action in damages on ordinary negligence principles.
The Law Refom Commission has proposed that the tort to be reformed into a civil action based on loss of family rights.