People who undermine other people’s business deals in Nevada may be liable for “intentional interference with prospective economic advantage.” The victim may be eligible for compensatory damages to make up for its lost profits. The court may award punitive damages as well.
The components of a Nevada claim of “intentional interference with prospective economic advantage” are:
- the plaintiff is likely to enter into a contract with another person or company;
- the defendant knows about this future contract;
- the defendant intends to harm the plaintiff by preventing the contract from going forward;
- the defendant has no legal justification to get involved; and
- the defendant causes the plaintiff to lose money
The time limit for bringing this type of lawsuit in Nevada is three (3) years. Often, these matters settle through negotiations.
In this article, our Nevada personal injury attorneys answer frequently-asked questions about ruining a prospective business deal in Nevada, including legal definitions, standards of proof, and statutes of limitations. Click on a topic to jump to that section:
- 1. What is “intentional interference with prospective economic advantage” in Nevada?
- 2. What money can I get if I sue?
- 3. Whom can I sue?
- 4. How do I prove that someone else caused my business deal to fall through?
- 5. When can I sue?
- 6. How can the defendant fight back?
- 7. Related claims
One commits this tort by deliberately hindering a person or company from entering into a valid contract (or business deal) with another party. “Intentional interference with prospective economic advantage” has five (5) elements that the plaintiff must prove in order to win in court:
- a prospective contractual relationship between the plaintiff and a third party;
- knowledge by the defendant of the prospective relationship;
- intent to harm the plaintiff by preventing the relationship;
- the absence of privilege or justification by the defendant; and
- actual harm to the plaintiff as a result of the defendant’s conduct.1
Various types of misconduct can qualify as wrongful meddling in a business deal: These include defaming one party to the other, destroying important documents, or falsely impersonating one of the parties. Las Vegas personal injury attorney Neil Shouse gives an example:
Example: Henry was recently fired from his software engineering job in Las Vegas for stealing office supplies. He knows his former employer is in talks to merge with another company, and he knows his former boss’s email password. So out of revenge he logs in to the boss’s account and deletes all the emails from the other company. When the other company never hears back from the boss, the business deal falls through. Since Henry’s former employer lost business because of Henry’s willful meddling, Henry could be liable in a court of law.
Plaintiffs may seek “compensatory damages” for all the money they would have earned had the contract gone through.
Additionally, plaintiffs may be able to recover “punitive damages,” which courts award to punish the defendant. Typically, the amount of punitive damages is capped at three (3) times the compensatory damages. (If the compensatory damages are less than $100,000, then the punitive damages limit is $300,000.)2
The plaintiff may sue anyone who deliberately hindered the plaintiff’s business relationships.
Any written or recorded materials that document the defendant’s intent would be valuable. Examples include:
- Emails, texts, letters, online comments, or other written communications;
- Internal notes;
- Audio or video recordings; and/or
Additionally, the plaintiff needs to show a reasonable basis for computing his/her lost earnings. Acceptable evidence may include historical data, market surveys, a financial expert witness, and what similar businesses under similar conditions earned.
4.1. Burden of proof
Plaintiffs have to prove in court that it is “more likely than not” that the defendant harmed the plaintiff. The legal term for this is “by a preponderance of the evidence.”3
The plaintiff has three (3) years after he/she discovers the defendant’s interference to sue.4
Typical defense strategies include the following:
- No intent. The defendant is not liable unless the defendant intended to botch the business deal.
- No actual damages. The defendant is not liable if the plaintiff lost no money from the broken business deal.
- No business relationship. There are no grounds for a lawsuit if the plaintiff had only a contemplated or potential business relationship with a third party. Unless there were serious business negotiations in the works, the defendant should not be found liable for meddling.
There are many grounds for suing people who have sabotaged a business deal. For more information, see our web articles:
- Defamation lawsuits in Nevada
- Business disparagement lawsuits in Nevada
- Harm to reputation lawsuits in Nevada
- Intentional interference with contractual relations lawsuits in Nevada
From California? See our article on California law for intentional interference with prospective economic relations.
- Custom Tel., Inc. v. Int’l Tele-Services, Inc., 254 F. Supp. 2d 1173, 1180-81 (Nev. 2003); Wichinsky v. Mosa, 109 Nev. 84, 88, 847 P.2d 727 (1993); Leavitt v. Leisure Sports, Inc., 103 Nev. 81, 88, 734 P.2d 1221, 1225 (1987); this claim is also called tortious interference or “intentional interference with prospective contractual relationship.”
- NRS 42.005.
- See Leslie J. Shaw v. CitiMortgage, Inc., No. 3:13-CV-0445-LRH-VPC. United States District Court, D. Nevada. August 17, 2016.
- Stalk v. Mushkin, 199 P.3d 838, 842 (Nev. 2009)(“Because we have determined that business interests are personal property, we conclude that intentional interference with these business interests are actions for taking personal property and not actions for injuries to a person…Thus, we conclude that intentional interference with business interests are subject to the three-year statute of limitations set forth in NRS 11.190(3)(c).”)