Competition drives business forward and pushes companies to improve their products and services. Healthy rivalry benefits everyone, including customers.
However, some competitors cross ethical and legal boundaries in their quest to win. When that happens, you may have grounds for a tortious interference claim.
Fair competition vs. interference
Tortious interference happens when a competitor knowingly uses improper methods to damage your existing business relationships or contracts. Texas law requires several elements as proof:
- A valid contract or business relationship exists
- Competitor’s knowledge of the business relationship
- Actions caused actual damage
Courts look at whether your competitor had actual business goals or just wanted to hurt your company. The key factor involves how and why your competitor acts, not just the result.
Red flags that your competitor has crossed the line
Watch for these warning signs that indicate willful sabotage:
- Paying or pressuring your clients to break agreements with you
- Spreading lies about your company, products or financial situation
- Offering rewards to your employees to steal your client information
- Temporarily selling at extreme low prices just to put you out of business
- Using your top secret information to target your clients
- Phisically blocking access to your business or disrupting your deliveries
- Scaring customers or suppliers to stop them from working with you
These actions go beyond fair competition and demonstrate intentional efforts to damage established business relationships. Documenting these behaviors immediately strengthens your potential claims.
Protecting your business relationships
A competitor’s actions can go from fair to malicious once they start using improper or unfair methods. Knowing where the line sits helps you identify when someone violates your rights.
Learning the difference between aggressive competition and unlawful sabotage helps you to take action and protect your company right away. Remember, waiting too long to address such issues can make the damage worse and even weaken your claims.