Top Business Litigation Cases And Their Impact On Local Businesses

A business’s reputation is crucial – a good reputation can build customer confidence and trust, directly impacting business performance. Like other relationships, disputes can sometimes arise in a business environment and can include disputes related to contracts, intellectual property, employment, and partnerships.​​​​​​A dispute can sometimes escalate to a lawsuit, potentially attracting unwanted consequences for your business. Business litigation can disrupt small firms, leading to reputational damage, operational disruption, and financial strain.

Having a reputable commercial litigation attorney for legal guidance can help you avoid costly business disputes or effectively defend your company. In this article the law team from Xander Law Firm explores the different business litigation cases and how they might impact your business.

Contract Disputes

Most business partnerships are formalized through a contract that outlines the nature and rules of engagement. Lack of compliance by one party can often form the basis of a lawsuit on contract breach. Three elements form the basis of such a lawsuit:

1. Proof of damage suffered
2. A legitimate contract
3. Proof of non-compliance by the other party

In some instances, the consequences of a contract breach are indicated in the contract. A breach of contract suit has severe implications for any business. In addition to the financial compensatory damages you incur, your personal life and business reputation may also suffer.

Understanding a contract’s language and content before signing is crucial to avoiding breaches. Consider investing in a business lawyer to interpret and make sure each party understands their roles and expectations. Carefully selecting the companies or people you partner with can also prevent you from possible contract disputes. Always do your due diligence by researching their legal history, professional reputation, and if they have had any past contract lawsuits.

Intellectual Property Disputes

Intellectual property protects businesses from any form of original or artistic creation. Misappropriation of intellectual property processes and products can involve your business in a dispute. Common intellectual property lawsuits include:

• Copyrights
• Trademarks
• Patent protection
• Trade secret
• Industrial confidential information
• Protected publicity rights
• Commercial patterns

Businesses should implement measures to prevent intellectual property infringement. You can consult a reputable attorney to help your company protect its intellectual property before a dispute arises. or during litigation.

Business Fraud

Business fraud occurs due to false statements, omission of material facts, or misrepresentation. Once you detect fraudulent activities, immediately consult an experienced business lawyer to investigate, and assist you in moving forward.

Any business can be susceptible to fraud and a business attorney can help your company implement protections and strategies to counter fraud and reduce damages. Business strategies that a reputable attorney may offer you include reviewing contracts and agreements, financial analysis to discover fraud, investigating business partners and ex-employees, conducting due diligence reviews, and computer forensics to analyze potential fraud.

Non-Compete Cases

When employees sign contracts agreeing not to work for a competitor for a specific period, the agreement may be subject to litigation if breached. Non-compete disputes arise in two contexts, namely:

1. Breach of non-competition agreements by former employees.
2. Interference of former employers with business relationships of a new business of a former employee

Each non-compete agreement entails restrictions on parties, which must be adhered to to avoid litigation. A non-compete lawsuit has dire implications for a business, so it’s advisable to consult an attorney before signing one. A professional will guide you in structuring the agreement to minimize potential unfair competition from ex-employees.

Breach of Fiduciary Duty

Fiduciary duty is the legal responsibility of a party to act in the best interests of another. This duty signifies a high level of trust and responsibility, and a person with a fiduciary duty is obligated to maintain it. For this reason, legal expertise is necessary when analyzing complex business disputes to avoid any breaches. Several factors are considered before claiming a violation of fiduciary duty, including:

• Adequate proof of the existence of a fiduciary connection
• Proof of its violation
• Proof of the damages caused by the violation

Breaching fiduciary duties can damage relationships among business partners and cause financial losses. Litigation to address the breach through lawsuits can significantly drain the business’s resources and damage your company’s reputation. You can avoid litigation impacts through clear communication and documentation of all the business partners’ activities. A lawyer may help you regularly review each other’s roles and responsibilities to ensure you understand and respect your fiduciary duties.

Insurance Coverage Disputes

Business owners should seek guidance from attorneys specializing in insurance coverage disputes and complex contract negotiations. Various factors could be a source of insurance disputes, such as:

• Contract and language interpretation
• Indemnification requirements
• Third-party insurance
• Contract definitions such as “damage”, “loss”, and “property”.
• Timing of the claim
• Questions of law
• Negligence
• Proof of loss
• Contract breach
• Due diligence of the insured party
• Mitigation of damages