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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: May 17, 2021

Tortious Interference with Prospective Business Relations Claim Fails for Lack of Factual Allegations of Bad Conduct

On March 1, 2021, Justice DeStefano of the Nassau County Commercial Division issued a decision in A.D.E. Sys., Inc. v. Gil-Bar Indus., Inc., 2021 NY Slip Op. 31552(U), holding that a tortious interference with prospective business relations claim failed for lack of factual allegations of bad conduct, explaining:

To state a cause of action for tortious interference with business relationships, a plaintiff must show that the defendant interfered with the plaintiffs business relationships either with the sole purpose of harming the plaintiff or by means that were unlawful or improper. Although his status as a competitor does not protect the interferer from the consequences of his interference with existing contract; it may excuse him from the consequences of interference with prospective contractual relationships, where the interference is intended at least in part to advance the competing interest of the interferer, no unlawful restraint of trade is effected, and the means employed are not wrongful.

ADE’s allegations that Gil-Bar’s interference with the ADE I Energy Lab’s relationship was for the purpose of harming ADE, done with malicious intent and constituted criminal conduct and/or an independent tort, fraud and misrepresentation, are conclusory and thus insufficient to withstand dismissal. Having failed to sufficiently allege that Gil-Bar’s interference was with the sole purpose of harming” ADE or by means that were unlawful or improper, the cause of action for tortious interference with prospective business relations is dismissed.

(Internal quotations and citations omitted).

In New York, there are circumstances where someone can be held liable for causing someone else to break their contract with you (tortious interference with contract), and they can even be held liable for causing someone not to enter into a contract with you in the first place (tortious interference with prospective business relations). Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client think someone has interfered with your rights relating to a contract.

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