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Legal Memorandum: Interference with Prospective Economic Advantage

Issue: What are the elements of a valid claim for interference with prospective economic advantage?

Area of Law: Business Organizations & Contracts
Keywords: Negligent interference with prospective economic advantage; Valid claim
Jurisdiction: California
Cited Cases: 63 P.3d 937; 110 Cal. Rptr. 2d 45; 59 Cal. App. 4th 764; 29 Cal. 4th 1134; 283 Cal. Rptr. 917; 90 Cal. App. 4th 1116; 69 Cal. Rptr. 2d 466; 138 Cal. App. 4th 1215; 232 Cal. App. 3d 1060
Cited Statutes: None
Date: 01/01/2007

The tort of negligent interference with prospective economic advantage is established when the plaintiff demonstrates that (1) an economic relationship existed between the plaintiff and a third party that included a reasonably probable future economic benefit or advantage to the plaintiff; (2) the defendant knew of the existence of that relationship and was aware or should have been aware that, if it did not act with due care, its actions would interfere with this relationship and cause the plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to the plaintiff, in that the relationship was actually interfered with or disrupted, and plaintiff lost at least part of the economic benefits or advantage reasonably expected from the relationship.  N. Am. Chem. Co. v. Superior Court (1997) 59 Cal. App. 4th 764, 786, 69 Cal. Rptr. 2d 466. 

Similarly, the elements of a claim for intentional interference with prospective economic advantage are: (1) an economic relationship between the plaintiff and a third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of that relationship; (3) an intentional act by the defendant, designed to disrupt that relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant’s wrongful act.  Korea Supply Co. v. Lockheed Martin Corp. […]

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