Colorado recognizes the tortious interference with a contract and interference with prospective business relation. A third party may be liable when, by inducement or other means, the person either (1) intentionally and improperly procures the breach of a contract, or (2) prevents the formation of a contract.
To prove tortious interference with a contract under Colorado law, a plaintiff must show: (1) a valid contract; (2) the defendant knew or reasonably should have known of the contract; (3) the defendant intended to induce a breach of the contract; (4) action by the defendant that induced a breach of the contract; (5) the defendant's interference was improper; and (6) the defendant's interference caused damages.
Tortious interference with a prospective business relation requires proof of essentially the same elements as tortious inference with contract, except that it does not require an existing contract. Tortious interference with a prospective business relation is defined as:
One who intentionally and improperly interferes with another's prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of (a) inducing or otherwise causing a third person not to enter into a contractual relation or (b) preventing the other from acquiring or continuing the prospective relation.
The most common defense to a tortious interference claim is the competitor’s privilege. This defense requires proving that the alleged interference was in a matter involving competition between plaintiff and defendant; the defendant did not employ wrongful means; the actions of defendant does not create or continue an unlawful restraint of trade; and the purpose of the alleged interference is at least in part to advance their interest in competing with the other.
Colorado law allows recovery for damages necessary to make the plaintiff whole. Damages may include: (1) the loss of the benefits of the contract or the prospective relation (including lost profits); (2) consequential losses for which the interference is the legal cause; and (3) emotional distress or actual harm to reputation, if they are reasonably expected to result from the interference.Punitive damages and injunctive or other equitable relief may be appropriate depending on the circumstances.