Arizona Contract Law

Tortious Interference With Contract In Arizona

A contract, in its simplest terms, is a written or oral agreement between two or more people.  Most people understand that a party to a contract may be liable if they fail to live up to their contractual obligations. It is also true, however, that if a third party interferes with the parties' contractual expectations, the third party may also be liable based on his or her interference with the contract.

To establish an interference with contract claim, the injured party must show five things:

1. That he or she had a contract with one or more other persons;
2. that the defendant knew about the contract;
3. that the defendant intentionally interfered with the plaintiff’s contractual relationship, causing a breach or termination of that relationship;
4. that the defendant’s conduct was improper; and
5. that the plaintiff was actually harmed and suffered damages due to the breach or termination of the contractual relationship.

Individuals or businesses who believe they may have tortious interference with contract claims in Arizona should contact and Arizona contract attorney as soon as possible because the time limitations to file a lawsuit for most interference with contract claims is two years from when the wrongdoing occurred.

The Duty Of Good Faith And Fair Dealing

Arizona law stands for the proposition that every contract includes an implied covenant of good faith and fair dealing.  This covenant, or duty, requires that the parties to a contract implicitly agree to act in good faith and deal fairly with the other.

The cases interpreting this duty state that the duty of good faith and fair dealing means that one party to a contract should not try in bad faith to cheat the other party of the benefits he or she expected to receive when making the contract.

The Statute of Frauds and Arizona Real Estate Contracts

Absent some statutory exception, Arizona contract law generally requires nothing more than the existence of an offer, acceptance, consideration, and sufficient specificity of the terms in order to have an enforceable contract. This means that oral contracts are just as enforceable as written contracts, though frequently more difficult to prove.

This is not true where the contract concerns the purchase and sale of real estate. There, the Statute of Frauds, codified in Arizona at A.R.S. Section 44-101(6), requires that contracts for the sale of real property be written and signed to be enforceable.

It is important to note, however, that the Arizona courts have consistently held that only the signature of the "party to be charged" is required. In other words, the contract must be signed by the party against whom enforcement is sought but does not necessarily have to be signed by the charging party. For example, a seller of real estate who never signed the sales contract may successfully maintain an action against a buyer who did sign the contract.

Any amendments to the contract must also be written and signed to be enforceable. Because of the requirements of the Statute of Frauds, parties buying or selling real estate in Arizona are advised to demand written confirmation of all the terms and conditions of the real estate transaction. Frequently, agents and brokers may make representations and assurances to buyers and sellers and suggest that a written modification is unnecessary. Buyers and sellers should avoid the temptation to rely upon such assurances and ensure that all important matters are reduced to writing and signed by the other party.

Notwithstanding the above, there are exceptions to the Statute of Frauds.  Many Arizona real estate contracts are not written and/or signed and one or more parties find themselves with a need to seek relief from another party. If you find yourself facing such a situation you should consult with an experienced Arizona real estate lawyer as soon as possible to determine whether an exception to the Statute of Frauds might apply, or if some other legal recourse is available.