3rd Party Interference With a Contract – Arizona Laws on Suing for Damages

A contract is an agreement between two or more people. It may be written or oral. If a third party interferes with a con­tract, the third party may be liable for money damages result­ing from his interference.

This claim is known as interference with contract. To estab­lish this claim, the injured person (the “plaintiff”) must show:

1. that he had a contract with another person
2. that a third person (the “defendant”) knew about the contract
3. that the defendant intentionally interfered with the plaintiff’s contrac­tual relationship with the other person, which caused a breach or termination of that relationship
4. that the defendant’s conduct was improper; and
5. that the plaintiff suffered damages caused by the breach or termination of the plaintiff’s contractual relationship with the other person.

This claim is available to any person who suffers a loss as a result of another person’s improper interference with his con­tractual relationship, regardless of the subject matter of the contract. In the area of employment law, this claim may be asserted by an employee against a third person who improp­erly interferes with his employment agreement. It may also be asserted by an employer against a third person who improp­erly interferes with an agreement between the employer and an employee.

If a person improperly interferes with another person’s contract, then the wrongdoer will have to pay money damages to the injured person (i.e., the plaintiff). These damages will consist of the net profit or benefit that the plaintiff would have received had the contract been performed, damage to the plaintiff’s reputation, and any emotional suffering sustained by the plaintiff. A judge or jury will determine the amount of the damages, based on the facts of the case.

The time limit to file a lawsuit for interference with contract is two years from when the cause of action accrues.