Business Litigation FAQs

Business litigation refers to the process of resolving disputes that arise in the context of commercial and business relationships. These disputes may involve two or more businesses, individuals, or entities and often center on contracts, partnership agreements, employment issues, or regulatory compliance. Business litigation can include lawsuits related to breach of contract, fraud, intellectual property disputes, shareholder disagreements, employment disputes, and violations of federal or state regulations.

Yes, many business disputes can be resolved without the need to go through a full trial. While litigation in court is sometimes necessary to protect legal rights, alternative methods of dispute resolution offer faster, less adversarial, and often less expensive options. Two of the most common alternatives are mediation and arbitration.

Courts often encourage or require mediation or settlement conferences before setting a case for trial, especially in business and commercial matters where ongoing relationships or complex contractual arrangements are involved. By resolving disputes outside the courtroom, businesses can avoid the uncertainty, time, and costs associated with litigation.

Choosing between mediation, arbitration, and litigation depends on the nature of the dispute, the parties’ goals, contractual agreements, and the desired outcome.

• Mediation involves a neutral third party, known as a mediator, who facilitates communication between the parties to help them reach a voluntary agreement. The mediator does not have the authority to impose a decision; instead, their role is to assist the parties in finding common ground and crafting a mutually acceptable resolution.
• Arbitration is a more formal process in which one or more arbitrators, who act as private judges, hear evidence and make a binding decision.
  Arbitration is typically less formal and quicker than a court trial, and parties often select arbitrators with experience relevant to their dispute.
• Litigation refers to the process of resolving disputes in court. It is governed by established procedural rules, is usually a matter of public record, and culminates in a binding judgment by a judge or jury.

A breach of contract occurs when one party fails to perform any term of a contract without a legitimate legal excuse. This failure can involve not completing a job, not paying on time, not delivering goods or services as promised, or otherwise not fulfilling the obligations outlined in the agreement.

The legal requirements for establishing a breach of contract generally include:

• Existence of a valid and enforceable contract,
• Proof that the plaintiff performed their contractual obligations,
• Evidence that the defendant failed to perform as required,
• Resulting damages suffered by the non-breaching party.

When a breach of contract occurs, the injured party is entitled to remedies that are intended to place them in the position they would have been in had the contract been performed as promised.

Common remedies for breach of contract include:

• Compensatory Damages: Financial compensation for actual losses caused by the breach.
• Consequential Damages: Damages for losses that were a foreseeable result of the breach.
• Liquidated Damages: A predetermined amount agreed upon in the contract, payable if a specific breach occurs.
• Specific Performance: A court order requiring the breaching party to perform their contractual duties, typically used when monetary damages are inadequate (common in real estate contracts).
• Rescission: Cancellation of the contract, with both parties excused from further obligations.
• Restitution: Restoring the injured party to the position they were in before the contract was formed, often involving the return of money or property.

The type of remedy available depends on the nature of the breach, the terms of the contract, and applicable state law.

Generally, oral contracts can be legally enforceable in court, provided they meet the essential requirements of a valid contract: offer, acceptance, consideration, and mutual intent to be bound. However, certain contracts must be in writing to be enforceable.

Enforcing oral contracts can be challenging because proving the terms and the existence of the agreement may rely heavily on witness testimony, emails, text messages, or other circumstantial evidence. While courts do enforce oral contracts when the necessary elements are present, written contracts provide stronger evidence and are generally easier to enforce.

Yes, if a contract has been breached, the non-breaching party is typically entitled to recover damages as compensation for their losses. The goal of contract damages is to make the injured party “whole” by awarding a sum that puts them in the position they would have been in if the contract had been properly fulfilled.

The amount and type of damages recoverable depend on several factors, including the terms of the contract, the nature and foreseeability of the damages, and the steps the injured party took to mitigate (reduce) their losses.

Contract litigation involves the legal process of resolving disputes arising from contracts through the court system. This process typically begins when a party files a lawsuit alleging that another party failed to fulfill their contractual obligations. Contract litigation can address a wide range of issues, including nonpayment, failure to deliver goods or services, misrepresentation, or disagreement over contract terms.

Yes, contracts can generally be modified or terminated after they have been signed, provided both parties agree to the changes. A contract modification alters one or more terms of the original agreement, while termination brings the contractual relationship to an end.

Modifications must meet the same requirements as the original contract, offer, acceptance, and consideration, and are usually made in writing to avoid misunderstandings or disputes. Many contracts contain clauses specifying how modifications must be made, such as requiring written amendments signed by both parties.

Contracts may also be terminated under certain circumstances, including:

• Mutual Agreement: Both parties agree to end the contract.
• Performance: Both parties fulfill their obligations, and the contract is completed.
• Breach: One party fails to perform, allowing the other party to terminate the agreement.
• Impossibility or Frustration of Purpose: Unforeseen events make performance impossible or undermine the contract’s purpose.
• Termination Clauses: The contract itself specifies the circumstances under which it can be ended.

Modifying or terminating a contract should always be documented in writing to ensure clarity and legal enforceability.

Non-compete clauses, also known as restrictive covenants, are provisions in contracts that restrict a party (often an employee or seller of a business) from engaging in certain competitive activities for a specified period within a defined geographic area. The enforceability of non-compete clauses depends on state law, the reasonableness of the restriction, and the circumstances surrounding the agreement.

In many states, non-compete clauses are enforceable if they are:

• Necessary to protect legitimate business interests (such as trade secrets or client relationships),
• Reasonably limited in duration and geographic scope,
• Not overly restrictive or contrary to public policy.

Homeowners have the right to bring a lawsuit against their Homeowners Association (HOA) if the association has failed to fulfill its legal obligations, violated its own governing documents, or infringed on a homeowner’s rights.

The governing documents of the HOA, including the Declaration of Covenants, Conditions, and Restrictions (CC&Rs), Bylaws, and rules and regulations, often set out the procedures for raising disputes and the types of legal action available. Some states require homeowners to exhaust internal dispute resolution procedures, such as mediation or arbitration, before filing a lawsuit.

Intellectual property (IP) encompasses a variety of intangible assets that a business or individual creates, owns, or utilizes in commerce. The most common types of IP that can be protected under U.S. law include trademarks, copyrights, patents, and trade secrets.

Securing and maintaining IP protection often involves registration with government agencies, contractual agreements, and internal company policies to safeguard confidential information.

Detecting intellectual property infringement can sometimes be straightforward, but it often requires careful monitoring and analysis.

Signs that someone may be infringing on your IP include:

• Use of identical or confusingly similar names, logos, or slogans on competing or related goods/services, which may cause consumer confusion.
• Reproduction, distribution, public display, or performance of your protected work without authorization, or the creation of derivative works based on your original content.
• Making, using, selling, or importing your patented invention without your permission, or offering a product that performs the same patented function.
• Unauthorized disclosure or use of confidential business information obtained through improper means or breach of a duty to maintain secrecy.

If you suspect a violation, it is advisable to consult with an attorney experienced in intellectual property law who can assess the situation, review the evidence, and recommend appropriate next steps.

While both copyright and trademark laws protect valuable business assets, they serve distinct purposes and are enforced under different legal frameworks.

• Copyright infringement occurs when someone copies, distributes, displays, performs, or creates derivative works based on an original work of authorship without permission.
• Trademark infringement involves unauthorized use of a mark, such as a logo, brand name, or slogan, that is likely to cause confusion about the source of goods or services.

Copyright law safeguards creative works from unauthorized copying, while trademark law protects brand identifiers from misuse that could mislead consumers.

Enforcing intellectual property rights involves several strategic steps, which may vary depending on the type of IP and the nature of the alleged infringement:

• Documentation: Collect evidence of your ownership and registration (where applicable) of the intellectual property. This includes registration certificates, contracts, and dated records of creation or use.
• Investigation: Identify the infringing party and the scope of the violation. Document all instances of unauthorized use and obtain copies of infringing materials or products.
• Cease and Desist Letters: Often, the first step is to send a formal cease and desist letter demanding that the infringer stop the unauthorized activity. This letter may serve as evidence of your attempt to resolve the matter amicably.
• Administrative Complaints: For domain name or online marketplace infringements, you may file a complaint with platforms or use procedures like the Uniform Domain-Name Dispute-Resolution Policy (UDRP).
• Litigation: If informal resolution fails, you may file a lawsuit in state or federal court. The court can grant injunctions to stop ongoing infringement and award damages where appropriate. For copyright, trademark, and patent matters, federal courts typically have jurisdiction.
• Customs Enforcement: Registering trademarks and copyrights can help prevent the importation of infringing goods.

The damages available in an intellectual property lawsuit depend on the type of IP right involved and the nature of the infringement. Common forms of recoverable damages include actual damages, profits, statutory damages, injunctive relief, and attorney’s fees and costs. The remedies available in your case will depend on the specific facts and legal theories asserted.

Dissolution of a partnership is the legal process by which a business partnership comes to an end. It involves terminating the relationship between partners, settling outstanding debts and obligations, distributing remaining assets, and completing any required filings with government agencies.

Dissolution can be voluntary (initiated by the partners themselves), judicial (ordered by a court), or administrative (triggered by failure to comply with legal requirements). Once dissolution is complete, the partnership ceases to exist as a legal entity.

Partnership disputes can arise from a variety of sources, often jeopardizing business operations and personal relationships.

Common causes include:

• Breach of Partnership Agreement: Disagreements over duties, profit sharing, decision-making authority, or other terms outlined in the partnership agreement.
• Mismanagement or Misconduct: Allegations of financial mismanagement, fraud, or violation of fiduciary duties.
• Unequal Contributions: Conflicts about capital contributions, workload, or compensation.
• Changes in Circumstances: Illness, retirement, death of a partner, or a partner’s desire to exit the business.
• Admission of New Partners: Disputes over bringing in new partners or transferring ownership interests.
• Business Direction: Conflicting visions for the future of the business or significant strategic decisions.

Addressing disputes early and according to the terms of the partnership agreement can help minimize disruption and potential liabilities.

When a partnership dissolves, the partners must wind up the business by paying off outstanding debts, collecting receivables, and liquidating or distributing assets. If the partnership’s assets are insufficient to cover its liabilities, the partners may be personally liable for the remaining debts, depending on the structure of the partnership and the laws of the state.

When partnership disputes cannot be resolved internally, several legal remedies are available to protect your interests and ensure a fair resolution:

• Negotiation and Mediation: Many disputes can be resolved through direct negotiation or alternative dispute resolution methods like mediation, which help partners reach a mutually acceptable agreement without going to court.
• Buyout of Partner Interests: One or more partners may buy out the interests of the partner(s) wishing to exit or causing conflict, as provided for in the partnership agreement.
• Accounting: Courts can order a formal accounting of partnership assets, liabilities, and profits to ensure an accurate distribution of assets.
• Dissolution and Winding Up: In cases of irreconcilable disputes, a partner may seek judicial dissolution of the partnership, after which the court oversees the winding up of affairs and asset distribution.
• Damages: If a partner breaches the partnership agreement or fiduciary duties, the injured party may seek monetary damages to compensate for losses.
• Injunctive Relief: Courts may issue orders to prevent a partner from engaging in certain conduct or to preserve the partnership’s assets during litigation.

The best remedy depends on the specific facts of the dispute, the language of the partnership agreement, and applicable state law.