A distributor contended that a manufacture interfered with a contract between itself and a third party for the exclusively distribution of its products, including products manufactured together with the distributor.
The Court held that the manufacturer did not commit tortious interference of the contract with the third party. The prima facia tort of tortious interference with a contractual relationship requires the existence of five elements: The existence of a binding contract; breach of the contract; awareness on the part of the tortfeasor of the existence of the contract and that its actions could lead to its breach; a causal connection between the tortfeasor's actions and the breach of the contract; and the lack of sufficient justification for the tortfeasor's actions. A fundamental condition for the tort is the existence of a binding contract. The fact that exclusivity arises from the business logic of the contract does not by itself create the grounds for the tort. Here, the contract limited the exclusivity to certain products only, the contract does not include a minimum period of exclusivity and can be terminated at any time by giving notice within a reasonable time, the exclusivity clause is subject to meeting purchase targets, meaning that such right is not absolute, and the contract stipulates that another party may distribute the products, creating a partnership rather than an exclusivity realtionship. Although without exclusivity it would be possible to bypass the distributor and work directly with the manufacturer but the business logic alone does not constitute exclusivity and thus there is no contract and no tortious interference with a contractual relationship.