New York tort law recognizes claims for tortious interference with both existing contracts and prospective business relations.1 To maintain robust, legitimate competition, however, New York courts apply the economic interest defense to such claims, which generally provides a complete defense where the interference arose through the exercise of defendant’s equal or superior right in the breaching party’s business.2 It has long been the case that existing contracts receive greater protection than prospective contracts, out of respect for individual contract rights. Although both types of claims require a showing of improper interference, plaintiffs seeking to recover for interference with prospective business relations must show a higher level of culpability, specifically malice or wrongful means.3
Whether economic self-interest is sufficient to establish the defense, in claims for both tortious interference with contract and tortious interference with business relations, has been the subject of significant judicial activity, both in the Court of Appeals and the Commercial Division. Following a recent Court of Appeals decision clarifying the breadth of the economic interest defense, the Commercial Division has had the opportunity to revisit its application. These recent decisions highlight the distinction the courts make between claims for tortious interference with contract and tortious interference with business relations. They also reflect that, although the Commercial Division may be limiting the situations in which self-interest justifies interference with an existing contract, it continues to apply the economic interest defense broadly to defendants who interfere with prospective business relations for their own direct benefit.
Court of Appeals Clarifies
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