One who, without a privilege to do so, induces or otherwise purposely causes a third person not to perform a contract with another, or enter into or continue a business relation with another, is liable to the other for the harm caused thereby. The first clause relates to those cases in which the purposeful interference of a third party induces or causes a breach of an existing and valid contract relationship. The second clause, that of a business relation, embraces two types of situations. One is that in which the interferor purposely induces or causes a party not to enter into a business relationship with another. The second is where a business relationship, terminable at the will of the parties thereto, exists, and the intermeddler purposely induces or causes a termination of such relationship. The distinction between the situations propounded by both clauses lies not so much in the nature of the wrong, as in the existence or nonexistence, and availability as a defense, of privilege or justification for the interference.
Mrs. Henderson, as the executrix of her husband’s will, hired Harry Calbom (plaintiff) as the attorney who would handle the probate proceedings. She also consulted with Halvor Knudtzon (defendant), an accountant, to handle the tax-related issues of her husband’s estate. During consultation, Knudtzon asked Henderson if she hired an attorney, to which the latter answered in the affirmative. In response, Knudtzon shook his head as an indication that Calbom was a poor choice. He then proceeded to recommend other attorneys to replace Calbom, one of whom Henderson ultimately hired as a replacement. In response, Calbom brought suit against Knudtzon for intentional interference with his contract with Henderson. The trial court ruled in favor of Calbom.
Was an accountant's interference with an attorney's contract with the accountant privileged, thereby barring an action by the attorney after the accountant persuaded the client to hire another attorney?
On appeal, the court ruled in favor of the trial court. It found that an attorney-client relationship did exist, which established the necessity of a contract in order to assert interference. Neither was the contract against public policy. Lastly, the defendant was likewise aware of this relationship. As such, Knudtzon did not have a valid privilege that would justify his interference.