CHAPTER 7: TORTS RELATED TO BUSINESS

I. Introduction. In a large number of cases businesses have their own separate torts. For example, a company who
has spent a considerable amount of money and time on a new drug would want to protect that investment.

A. Example. Or a company who has built a large customer list would want to protect that list. This will
usually come into play when an employee leaves the company and starts competing against his former
employer.

B. Business Tort Defined. The text defines business torts as wrongful interference with another's business
rights. We will cover the five causes of action list on page 78. They are:

1. Wrongful Interference with a Contractual Relationship.

2. Wrongful interference with a business relationship.

3. Wrongfully entering into business.

4. Infringement of trademarks, trade names, patents, and copyrights.

5. Disparagement of Property or Reputation.

II. Wrongful Interference with a Contractual Relationship.

A. Element which will Constitute Wrongful Interference with a Contractual Relationship. The text list three
elements which are necessary to prove that a wrongful interference with a contractual relationship exists.
They are:

1. A valid, enforceable contract must exist between the parties.

2. A third party must know that this contract exits.

3. The third party must "intentionally" cause either of the parties to the contract to break the
contract.

B. Example. Floyd has been training Gomer to become a barber. In fact, Gomer has become so good at
cutting hair that Floyd and Gomer entered into a contract. The contract states that Gomer will cut hair
only in Floyd's shop.

1. Howard Sprange recognizes Gomer's talent and he was also aware of the contract between Floyd
and Gomer. Howard persuades Gomer to cut hair in his new barber shop. What's the result.

Answer. Howard has interfered with the Contract between Floyd and Gomer because:

a. There was a valid contract between Floyd and Gomer

b. Howard knew about the contract

c. Howard intentionally caused Gomer to break the contract when Gomer came to work for
him.

C. Texaco, Inc. v. Pennzoil Co.

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