The Massachusetts Appeals Court recently handed down a decision that touched on both defamation and contract law, particularly tortious interference in a contract, or when a party wrongfully mingles with another party's business opportunities.

Bad Business Review Leads to Litigation

The facts of the case, B.C. Construction v. Johnson Roberts Associates, were fairly simple: An architectural firm had a bad experience dealing with a construction company and then, when the architectural firm was consulting a subsequent client, that same construction company secured the lowest bid. The architectural firm did its due diligence and put together a report for the client that included lots of negative reviews and a history of projects that required dispute resolution and litigation.

The client found the construction company's low bid to be “not responsible” and hired another company.

The construction company sued the architectural firm, claiming that it had tortuously interfered with its contract with the client, and defamed the company.

The trial court ruled for the architectural firm at the summary judgment stage and the construction company appealed.

Tortious Interference with a Contract

Tortious or intentional interference with a contract is the legal claim that Party A had a contract or a business opportunity with Party B, but Party C unlawfully interfered with it. Person A would then have to show four things:

1. It had an advantageous relationship with Party B,
2. Party C knowingly induced Party B to forgo the business relations,
3. The inducement was improper in motive or means, and
4. Party A was harmed by the interference.

According to business and contract lawyer David S. Katz, “In this case, as in many others, the key question is whether the inducement was improper in motive or means.”

An improper motive is when Party C intended specifically to harm Party A, unrelated to any legitimate business purpose. However, it is well-established that there is not an improper motive when the interference was part of giving honest advice after being asked for it, which is exactly what the architectural firm did.

Therefore, the appeals court upheld the ruling against the construction company on this claim.

The Common-Interest Privilege to Defamation

The construction company's defamation claim fared no better, with the appeals court pointing to the common-interest privilege.

According to the court, “a person may possess a conditional privilege to publish defamatory material if the publication is reasonably necessary to the protection or furtherance of a legitimate business interest.” Some exceptions apply, like acting out of malice or knowing that the statements were false, but the construction company presented no evidence that any of them were in play. Because the architectural firm and the client were doing business together, this meant that the bad reviews the firm gave about the construction company were privileged and the firm could not be held liable for them.

Contract and Defamation Lawyers at the Katz Law Group in Massachusetts

Business disputes like these are infamous for implicating a wide variety of legal fields. This is why the business lawyers at the Katz Law Group have built a reputation for effective legal representation in numerous areas, including contract law and defamation law.

Contact them online or call their law office in central Massachusetts at (508) 480-8202.