Construction is a highly competitive industry. Bidding wars and aggressive marketing are a part of daily operations. But what happens when a business feels unfairly pushed out of a deal? Or when a competitor blocks a potential business relationship from forming? All these can cost a construction company money and opportunities.
On the one hand, a company can file an interference claim. Also known as “tortious interference” or “intentional interference” claims, companies can file these claims when they believe another party has wrongfully interfered with their business deals or contracts. However, sometimes construction is simply a tough industry where everyone wants to win. So, how do you tell the difference between fair play and foul?
Intention matters
The intent behind the actions is crucial. Fair competition is about trying to succeed in the business. To do this, a company might offer better processes or improve its services to win contracts. There’s no specific intent to harm a competitor or breach any contracts—simply to do well themselves.
When it comes to interference, the intent is not just to compete. Rather, they deliberately try to disrupt or damage another’s business relationships. There is usually an awareness of existing contracts or business relationships that their actions might affect. This might involve targeting specific contracts or clients known to be working with competitors, with the primary goal of disrupting those relationships rather than winning business on merit.
Methods must be ethical
How did the company go about their actions? Were their methods considered normal business practices, or did they cross ethical lines? While actions in the name of fair competition involve offering competitive pricing and improving work quality and customer service, tortious interference can involve:
- Spreading false information about competitors, such as rumors about financial instability or project failures
- Coercion or intimidation of clients or suppliers, including threats to withhold future business
- Deliberately breaching contracts to harm others, like backing out of a subcontractor agreement to prevent a competitor from completing a project
- Illegally accessing competitor’s confidential information or trade secrets
- Offering bribes to win contracts or influence decision-makers
These actions go beyond normal business practices and can lead to legal issues, damage to reputation and potential industry sanctions.
There are two sides to every situation
If you find yourself questioning whether a competitor’s actions cross the line, it’s wise to seek professional legal advice.