Sec. 126. Duty Not To Interfere With Contract Rights

A third person has a duty not to interfere to induce another to break his contract, unless done in good faith, in the exercise of fair competition. If he does so wrongfully interfere, he may be sued in tort by the party to the contract whom he has thus wronged.

While the law upon this subject is not uniform in all its phases in all jurisdictions, the subject may be stated generally as follows: That a contract between parties imposes a duty upon strangers thereto, toward each party not to induce the other party to break off his contractual relationships, unless he does it in good faith and by way of fair competition.

Example 78. Horn was employed by A. S. & Co., as foreman; he was injured and made a claim against A. S. & Co., for damages. A. S. & Co. carried liability insurance in the L. G. Co., covering this injury. The agent for the L. G. Co. threatened to procure H's discharge unless he would settle for a sum offered. He refused it and the Insurance Company did procure his discharge. He brought suit against the L. G. Co. for interfering with his contract with A. S. & Co. Held, he had a case in tort on this ground, as there was no legal excuse in this case. The Court put emphasis on the fact that this was not a case of competition.166

166. London Guarantee Co. v. Horn, 206 111. 493If the breach is obtained in the exercise of fair competition, it is lawful, as where a dealer offers better service or better prices, and thus succeeds in getting trade from a competitor.

But the competition must be real, not simulated competition established to injure one,167 and there must neither be promises of indemnity168 nor false reports about the rival.169

Sec. 127. Contract For Indefinite Period

By the better view it is immaterial whether the contract is for a fixed period or not if its discontinuance is caused by the unlawful interference.

In the Horn case stated above, the employe was employed under no definite contract of employment. He could have been discharged at any time. But he would not have been discharged except for the interference of the Insurance Company. And, therefore, his case was not defeated by that character of his contract. To so hold would be to introduce a technicality which would defeat justice.

Sec. 128. Prevention Of Future Contracts

If a person is reasonably certain to make a contract with another, and a third person without valid excuse interferes to prevent it, he may be held in damages.

If one may interfere with an existing contract, he may certainly, under the same circumstances, prevent

167. Tuttle v. Buck, 107 Minn. 145.

168. Amer. Law Book Co. v. Edw. Thompson Co., 84 N. Y. Supp. 225.

169. Evanson v. Spaulding, 150 Fed. 517; Sperry v. Weber, 161 Fed. 219.

one, as where a person successfully gets a contract which his competitor would have procured. But if the interference is without legal justification, a suit may be maintained.170

170. Lewis v. Bloede, 202 Fed. 7.