CACI 2200 Inducing Breach of Contract

California Civil Jury Instructions CACI

2200 Inducing Breach of Contract

[Name of plaintiff] claims that [name of defendant] intentionally caused [name of third party] to breach [his/her/nonbinary pronoun/its] contract with [name of plaintiff]. To establish this claim, [name of plaintiff] must prove all of the following:

1.That there was a contract between [name of plaintiff] and [name of third party];

2.That [name of defendant] knew of the contract;

3.That [name of defendant] intended to cause [name of third party] to breach the contract;

4.That [name of defendant]’s conduct caused [name of third party] to breach the contract;

5.That [name of plaintiff] was harmed; and

6.That [name of defendant]’s conduct was a substantial factor in causing [name of plaintiff]’s harm.

Directions for Use

If the validity of a contract is an issue, see the series of contracts instructions (CACI No. 300 et seq.).

Sources and Authority

“[C]ases have pointed out that while the tort of inducing breach of contract requires proof of a breach, the cause of action for interference with contractual relations is distinct and requires only proof of interference.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1129 [270 Cal.Rptr. 1, 791 P.2d 587], internal citations omitted.)

“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co.supra, 50 Cal.3d at p. 1126, internal citations omitted.)

“[A] cause of action for intentional interference with contract requires an underlying enforceable contract. Where there is no existing, enforceable contract, only a claim for interference with prospective advantage may be pleaded.” (PMC, Inc. v. Saban Entertainment, Inc. (1996) 45 Cal.App.4th 579, 601 [52 Cal.Rptr.2d 877].)

“The act of inducing the breach must be an intentional one. If the actor had no knowledge of the existence of the contract or his actions were not intended to induce a breach, he cannot be held liable though an actual breach results from his lawful and proper acts.” (Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 37 [112 P.2d 631], internal citations omitted.)

“ ‘To recover damages for inducing a breach of contract, the plaintiff need not establish that the defendant had full knowledge of the contract’s terms. Comment i to Restatement Second of Torts, section 766, … states: “To be subject to liability [for inducing a breach of contract], the actor must have knowledge of the contract with which he is interfering and of the fact that he is interfering with the performance of the contract.” ’ ” (Jenni Rivera Enterprises, LLC v. Latin World Entertainment Holdings, Inc. (2019) 36 Cal.App.5th 766, 783 [249 Cal.Rptr.3d 122].)

“It is not enough that the actor intended to perform the acts which caused the result—he or she must have intended to cause the result itself.” (Kasparian v. County of Los Angeles (1995) 38 Cal.App.4th 242, 261 [45 Cal.Rptr.2d 90].)

“The question is whether a plaintiff must plead and prove that the defendant engaged in wrongful acts with the specific intent of interfering with the plaintiff’s business expectancy. We conclude that specific intent is not a required element of the tort of interference with prospective economic advantage. While a plaintiff may satisfy the intent requirement by pleading specific intent, i.e., that the defendant desired to interfere with the plaintiff’s prospective economic advantage, a plaintiff may alternately plead that the defendant knew that the interference was certain or substantially certain to occur as a result of its action.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1154 [131 Cal.Rptr.2d 29, 63 P.3d 937], original italics.)

“The actionable wrong lies in the inducement to break the contract or to sever the relationship, not in the kind of contract or relationship so disrupted, whether it is written or oral, enforceable or not enforceable.” (Pacific Gas & Electric Co.supra, 50 Cal.3d at p. 1127.)

“ ‘[I]t may be actionable to induce a party to a contract to terminate the contract according to its terms.’…‘[I]t is the contractual relationship, not any term of the contract, which is protected against outside interference.’ ” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289 [185 Cal.Rptr.3d 24], internal citation omitted.)

“[T]he tort cause of action for interference with a contract does not lie against a party to the contract. [Citations.] [¶] … The tort duty not to interfere with the contract falls only on strangers-interlopers who have no legitimate interest in the scope or course of the contract’s performance.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514 [28 Cal.Rptr.2d 475, 869 P.2d 454], internal citations omitted.)

“[I]nterference with an at-will contract is actionable interference with the contractual relationship, on the theory that a contract ‘at the will of the parties, respectively, does not make it one at the will of others. [Citations]’ ” (Pacific Gas & Electric Co., supra, 50 Cal.3d at p. 1127, internal citations and quotations omitted.)

“Because interference with an existing contract receives greater solicitude than does interference with prospective economic advantage, it is not necessary that the defendant’s conduct be wrongful apart from the interference with the contract itself.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55 [77 Cal.Rptr.2d 709, 960 P.2d 513], internal citations omitted.)

“ ‘[A] person is not justified in inducing a breach of contract simply because he is in competition with one of the parties to the contract and seeks to further his own economic advantage at the expense of the other. [Citations.]’ This is because, ‘[w]hatever interest society has in encouraging free and open competition by means not in themselves unlawful, contractual stability is generally accepted as of greater importance than competitive freedom.’ A party may not, ‘under the guise of competition actively and affirmatively induce the breach of a competitor’s contract.’ ” (I-CA Enterprises, Inc., supra, 235 Cal.App.4th at p. 290, internal citations omitted.)

“We conclude that a plaintiff seeking to state a claim for intentional interference with contract or prospective economic advantage because defendant induced another to undertake litigation, must allege that the litigation was brought without probable cause and that the litigation concluded in plaintiff’s favor.” (Pacific Gas & Electric Co., supra, 50 Cal.3d at p. 1137.)

Secondary Sources

5 Witkin, Summary of California Law (11th ed. 2017) Torts, §§ 842–853
3 Levy et al., California Torts, Ch. 40, Fraud and Deceit and Other Business Torts, §§ 40.110–40.117 (Matthew Bender)
49 California Forms of Pleading and Practice, Ch. 565, Unfair Competition, § 565.132 et seq. (Matthew Bender)
12 California Points and Authorities, Ch. 122, Interference, § 122.20 et seq. (Matthew Bender)