Business partners should work cooperatively to build up the company they’ve started and run together. Each has a fiduciary duty to the organization, meaning that they should act in its best interests. They also have a duty to one another to uphold the terms of the partnership agreement that they signed with each other.
While many business partners are eager to see their companies thrive, some have secondary priorities that can interfere with a company’s long-term success. One partner might use their position to funnel projects and funds to a side project, such as an independent professional practice they run.
Sometimes, one business partner may invest weeks of effort into developing a new opportunity or securing a contract with an outside party. Despite their efforts, the project or contract may fall through at the 11th hour. They may then discover that their business partner played a role in poaching that contract or business opportunity. In such cases, it may be possible to pursue litigation.
Tortious interference can be grounds for a lawsuit
A business tort involves conduct that causes damage to a company’s intangible resources. Tortious interference with business operations or a contract occurs when one party leverages their position to interfere in a company’s plans or prevent the organization from securing a contract.
If one partner learns that the other has negotiated a highly favorable and profitable arrangement for the company, they might seek to secure that opportunity for themselves as an individual or for a second business that they help run. Doing so diminishes the opportunities and revenue for the joint business venture.
In cases where there was a clear opportunity, not just an expectation, and one partner intentionally interfered for their own benefit, their conduct could warrant litigation. Their actions not only harm the company, but may also constitute a breach of their fiduciary duty to the organization.
Reviewing a partnership agreement, a project or contract that fell apart and a partner’s role in that disappointment can help business leaders take appropriate action. Leaders can seek injunctions or damages to address the impact of the interference or may even be able to pursue a buyout over the breach of fiduciary duty that occurred.
Pursuing business litigation over tortious contract interference is a reasonable response to a partner interfering in a company’s projects and pending contracts. Seeking legal guidance is often the most straightforward and effective way to learn more.