Wrongful Interference. California Consumers Co purchased from S. L. Coker an ice distributing business in the city of Santa Monica. In the purchase agreement, Coker agreed that he would not engage in the business of selling or distributing ice either

Question

directly or indirectly in Santa Monica, so long as the purchasers or any later purchasers remained in the business. Imperial Ice Co acquired the ice distributing business from California Consumers. Coker subsequently began selling ice in the same territory. The ice was supplied to him by a company owned by Rossier and Matheson on very attractive terms, because they wished to break into that area. Imperial Ice sued to obtain an injunction to restrain Coker from violating his original contract. Did Rossier and Matheson induce Coker to violate his contract, and were they therefore guilty of the tort of wrongful interference with contractual relations?

Answer 1

Wrongful interference
Yes, if inducement was shown. This case illustrates the general rule that a person is not justified in inducing a breach of contract simply because he or she is in competition with one of the parties to the contract and seeks to further his or her own economic advantage at the expense of the other. The act of inducing the breach of contract between Coker and Imperial Ice (the purchaser of the ice distribution company from California Consumers) was clearly intentional. Had the defendants, Rossier and Matheson, merely sold the ice to Coker without actively inducing him to violate his contract, his distribution of the ice in the "forbidden" territory—Santa Monica—in violation of his contract would not then have rendered the defendants liable. Also, if they had not known that he had promised not to sell ice, they would not have been liable.