Chapter 15 - § 15.2 • THE CONTRACT ELEMENT

• Jurisdiction: Colorado

§ 15.2 • THE CONTRACT ELEMENT

§ 15.2.1—Basic Contract Principles

Establishing the first element of a claim of interference with contract requires proof that a contract existed between the plaintiff and a third party. Grimm Const. Co., Inc. v. Denver Bd. of Water Comm'rs, 835 P.2d 599, 601 (Colo. App. 1992); see also American Express Fin. Advisors, Inc. v. Topel, 38 F. Supp. 2d 1233, 1241-42 (D. Colo. 1999). Basic contract principles of offer, acceptance, and consideration are applicable to this determination. In the employment context, a contract may be express or implied based upon the employer's verbal promises, offer letter, policy statements, handbook, practices, and, of course, a written contract of employment. See Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo. 1987); Adams County Sch. Dist. No. 50 v. Dickey, 791 P.2d 688 (Colo. 1990); Gomez v. Martin Marietta Corp., 50 F.3d 1511 (10th Cir. 1995); Herrera v. Int'l Brotherhood of Elec. Workers, 228 F. Supp. 2d 1233, 1239 (D. Colo. 2002) (anti-discrimination policy).

§ 15.2.2—Prospective Contracts

If the contract between the plaintiff and a third party was only prospective at the time of the defendant's interference, no cause of action can be stated for interference with contract. Plaintiff may, nevertheless, have a claim under the companion tort theory of interference with prospective contract or business advantage. Nutting v. RAM Southwest, Inc., 106 F. Supp. 2d 1121, 1128 (D. Colo. 2000); Seidl v. Greentree Mortgage Co., 30 F. Supp. 2d 1292, 1302 (D. Colo. 1998); Clancy Sys. Int'l, Inc. v. Salazar, 117 P.3d 1235 (Colo. 2008); Amoco Oil Co. v. Ervin, 908 P.2d 493 (Colo. 1995); Omedelena v. Denver Options, Inc., 60 P.3d 717, 721 (Colo. App. 2002); Dolton v. Capitol Fed. Sav. & Loan Ass'n, 642 P.2d 21, 23 (Colo. App. 1981). To establish liability for interference with a prospective contract, the plaintiff must show intentional and improper interference by the defendant that prevented the formation of a contractual relation. See Restatement (Second) of Torts § 766B (1979); Montgomery Ward & Co., Inc. v. Andrews, 736 P.2d 40, 47 (Colo. App. 1987); Dolton, 642 P.2d at 23. See also Wasalco, Inc. v. El Paso County, 689 P.2d 730 (Colo. App. 1984).

The plaintiff need not show either that a contract existed or that a formal contract was contemplated. "It is not necessary that the prospective relation be expected to be reduced to a formal, binding contract. It may include prospective quasi-contractual or other restitutionary rights or even the voluntary conferring of commercial benefits in recognition of a moral obligation." Amoco Oil Co., 908 P.2d at 500 (quoting Restatement (Second) of Torts § 766B, cmt. c (1979)). But interference with a prospective contractual relation "is tortious only if there is a reasonable likelihood or reasonable probability that a contract would have resulted." Tara Woods Ltd. Partnership v. Fannie Mae, 731 F. Supp. 2d 1103, 1120 (D. Colo. 2010) (a purchase offer to buy real estate is "sufficient to allege a prospective business advantage . . . "); MDM Group Assocs., Inc. v. CX Reinsurance Co. Ltd., 165 P.3d 882, 886 (Colo. App. 2007) (citing Klein v. Grynberg, 44 F.3d 1497 (10th Cir. 1995)); Plaza Esteban v. La Casa Nino, Inc., 738 P.2d 410 (Colo. App. 1987) (lack of a firm offer of a contract defeated tortious interference claim), rev'd on other grounds, 762 P.2d 669 (Colo. 1988).

Practice Pointer
Where the employment relationship was still under negotiation at the time of the interference, a claim of interference with prospective contract or business advantage is appropriate.

§ 15.2.3—Void Contracts — Oral And Illegal Employment Agreements

Although intentional interference with a voidable contract is actionable, where the contract is void, rather than voidable, there can be no liability for inducing its breach. Dolton, 642 P.2d at 22-23; see also Falcon Broadband, Inc. v. Banning Lewis...