If you are the owner or manager of a business, then you know the value of having competent legal representation for your company. But even if you have a top-tier business litigation attorney on retainer, you should have a basic understanding of business litigation, so that when the day comes, you aren’t going in blind.
Common Reasons for Business Litigation
Many people view lawsuits as a “necessary evil,” but that’s not always the case. In fact, if you’re the injured party, a lawsuit may be the best recourse for you to recover damages. These are some of the reasons that companies and business owners sue:
- Breach of contract – This is a catchall for many different types of business lawsuits, including failure to perform, non-payment, lease violations, etc.
- Non-payment – When another party owes you money and will not work out a payment plan, this may be the way for you to recover what you’re owed.
- Non-performance – Contracts bind parties to certain actions. When one of the parties doesn’t live up to their end of the obligation, the injured party can sue for non-performance.
- License violation – Companies often license other businesses or parties to use their name, logo, or other intellectual property. Not adhering to the terms of the licensing could be grounds for a lawsuit.
- Intellectual property appropriation – It is illegal to use patented, copyrighted, or trademarked property without permission. When this happens, the plaintiff can sue for damages.
- Criminal malfeasance – When a party steals assets from a company, they can be charged criminally, but they may also be sued for damages.
This is by no means a comprehensive list. Contact a business litigation attorney for more information about business lawsuits.
Grounds for a Business Litigation Suit
Just because someone breaches a contract doesn’t mean that there are grounds for a lawsuit. In order for a plaintiff to have grounds for a lawsuit, the following three conditions must exist:
- There must be a breach of contract or some other violation of the plaintiff’s rights
- The breach or violation must be material
- The breach or violation must have caused damages
Time-Table for a Civil Lawsuit
There are often other actions a business attorney can take to avoid litigation. These may include negotiation, mediation, and arbitration. But when all else fails, you may have to sue another party (or you may be sued by another party). Civil litigation can be frustratingly slow. You may be looking at one to three years before seeing the inside of a courtroom.
There are times when a business dispute cannot wait for the lengthy process of a lawsuit. For instance, if someone is violating your patent and undercutting you on the sale of your product, can you really wait years for a judge to order them to stop? Of course, not. A business litigation attorney may be able to get an emergency injunction ordering the defendant to cease and desist. Injunctions are not usually permanent solutions, so you may still have to continue with the lawsuit, but they can be invaluable in many situations.
Mediation and Arbitration
Mediation and arbitration are processes that are employed to avoid courtroom litigation. The main difference between the two is that arbitration is binding and mediation isn’t. Parties may agree to mediation as a good-faith effort to resolve their differences outside of court. In arbitration, the two parties agree to adhere to the decision of the arbitrator.
If you have a business dispute that you can’t resolve with another party, then you should contact a professional business litigation attorney in your area.