Intentional Torts of Economic Relations: Definition and Elements

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Agency Relationship: Definition, Principles & Problems

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
Your next lesson will play in 10 seconds
  • 0:05 Intentional Torts of…
  • 1:00 Injurious Falsehood
  • 2:50 Interference with…
  • 5:29 Intentional…
  • 7:07 Lesson Summary
Save Save Save

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Log in or Sign up

Speed Speed Audio mode
Lesson Transcript
Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

Economic relations torts affect three categories of interference or injury that result in monetary loss. They are injurious falsehood, interference with contractual relations and interference with prospective advantage.

Intentional Torts of Economic Relation

Today's economy drives people to be very competitive. Businesses scan the environment looking for innovative ways to keep ahead of their competition. Some businesses develop new products and services that outperform their competition. Some businesses may engage in intentional interference with economic relations that cause financial harm to others, like stealing a valued employee, publishing false information or even interfering with a business' future economic gains.

Let's break it down. The three types of tortuous behaviors that can affect another party's business conditions are:

  • Injurious Falsehood
  • Interference with Contractual Relations
  • Interference with Prospective Advantage

All three talk about different behaviors but share one common thing: they all cause economic losses.

Injurious Falsehood

When a party publishes or states an injurious falsehood, what they are really doing is making a widespread statement that defames or tarnishes another person's reputation. The statements must be so damaging that in itself causes another economic loss. Before we review an example, it is important to know that certain conditions must be present and proven by the plaintiff:

  • The defendant actually made a false statement about another party's business.
  • Someone other than the plaintiff was made aware of the statement.
  • It can be proven that the statement was made intentionally and to cause harm.
  • An economic loss by the plaintiff can be proven.

In Harwood Pharmacal Co. v. National Broadcasting Company (1961), the plaintiff, Harwood Pharmacal, alleged that the defendant, National Broadcasting Company (NBC), broadcasted a television show in which the defendant contended that a product manufactured by Harwood was dangerous. A sleep aid, called Snooze, manufactured by Harwood came under fire during an NBC broadcast. During the broadcast, it was said that Snooze was addicting and contained so many different types of drugs, one would need to go to a hospital to kick the habit.

The outcome of the broadcast - Harwood's sales decreased, causing an economic loss. Harwood argued that the comments made during the broadcast were defamatory, malicious and intentional. The defendant, on the other hand, stated that they never meant harm. The court maintained that the language used in the broadcast was enough to damage one's reputation and ruled in favor of the plaintiff.

Interference with Contractual Relations

Another economic relations tort deals with interference with contract relations. Sometimes called tortuous interference, interference with contractual relations occurs when a third party intentionally interferes with the contractual relationship of two other parties. A case may help explain. First, let's review the elements needed to make this allegation:

  • The plaintiff had a contract with another party.
  • The defendant had knowledge of the contract.
  • The defendant intentionally enticed the contract party to breach the original contract.
  • There was no justification for the breach.
  • The plaintiff suffered damages because of the breach.

On appeal, White Plains Coat and Apron Co., Inc. v. Cintas (2007) taught us a lesson about competition and the application of elements for tortuous interference. In this case, White Plains Coat and Apron and Cintas Corporation competed for the same customers. In the course of business, it was customary to advertise through mailings and other means to attract new business.

White Plains Coat contended that Cintas lured their customers to breach contracts for services and join Cintas in contractual relations for the same or similar products. White Plains contacted Cintas with a list of customers that they felt breached and ordered Cintas to stop advertising to its customers. When Cintas refused, White Plains filed suit, first in state court and then in appeals court. This was to no avail.

State court believed that Cintas was merely advertising to customers via proper channels and with no intention of interfering with any existing contractual agreements. What had not been established was a pre-existing relationship between Cintas and breaching customers prior to the breach. In layman's terms, the court did not see that Cintas knew specifically of a contractual agreement between any specific parties when they launched their advertising campaigns. So, the question is whether Cintas's interest in generating more business can be viewed as interference with White Plains Apron's contracts with its customers? Both state and appellate courts ruled no, it did not.

Interference with prospective advantage works a little different than this tort. Although interference remains the same, the next tort deals with a third party causing future economic damage to another.

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account