Business Litigation: The Basics of Each Type Explained

Business litigation is sweeping the nation. 36% to 53% of small businesses deal with a lawsuit every year.

Some of these lawsuits are legitimate, while others are fraudulent. Nearly all lawsuits can get avoided if the two sides are aware of the law and their rights.

What exactly occurs with a breach of contract? What issues can arise with a non-competition clause? What is intellectual property, and what can a company do to protect its ideas?

Answer these questions and you can avoid costly business disputes with simple steps. Here is your quick guide.

Breach of Contract

Breaches of contract inspire many business disputes. Two people can enter into a written or verbal agreement with each other.

Any term within that agreement can be violated. One person may fail to provide a product that the other person asks for. Someone may not deliver goods in a timely fashion, or they may not pay someone for their work.

You can avoid many breaches from ever occurring. Get everything you need for a successful business partnership in writing. Write a description of the expectations you have for a position and include several agreements in the document.

You should specify what your steps will be if the person has a dispute over the contract. You can go into mediation or arbitration, and you can talk about the legal jurisdiction. If a breach of contract occurs, you should contact business lawyers so you can protect your rights.

Non-Competition Issues

Many contracts have a non-competition clause within them. An employee cannot work for a competing company for a few years after they leave their current job. They cannot share classified information like client lists with their new company.

A number of non-competition issues can occur. An employee may violate the clause and work for a competing company after leaving their job. But the clause itself may be poorly worded, or a company may file an improper lawsuit.

A company must be careful when they draft their clauses. They should run them by a team of business litigation attorneys. An employee who is about to sign a contract should contact a lawyer to see if the clause holds legal weight.

Non-competition lawsuits move quickly because they involve current business practices. Both sides want to resolve the conflict as fast as possible.

This may mean that one side offers the other a settlement. Both sides should take time to write the terms of the settlement and devise approaches to avoid future conflicts.

Insurance Disputes

Most insurance disputes occur after a provider refuses to cover a claim. They may refuse because they have misrepresented their services. But they may refuse because the client violated the policy through malpractice or negligence.

On rare occasions, a company may refuse to extend insurance to its employees. This has become a problem with the COVID-19 pandemic. Some companies refuse to extend workers’ compensation coverage to employees who acquired COVID-19 at work.

It is very important that business owners review the terms of their insurance agreements. They must run the agreements by attorneys before signing onto them. Any interpretation differences or ambiguous language must get smoothed out.

Breach of Duty

A duty is a high standard of care that someone should naturally expect from someone else. A customer can expect that a company will prioritize safety. They will keep their information confidential and they will provide a safe space to meet with employees.

A customer or vendor can sue for breach of duty when this standard is not met. A breach of duty can include aspects of civil and business law like sexual harassment and privacy violations. This means that you should find a lawyer with experience in different kinds of laws.

Fraud

A fraud lawsuit can occur after numerous incidences. Someone may deceive another person, selling a counterfeit product. Someone may misrepresent themselves, claiming they have more experience than they actually have.

An employee may commit fraud against their own company. This can involve stealing from the company or concealing an accident.

Fraud can damage an entity’s reputation and lead to criminal penalties. The two parties involved in the litigation should be careful and spend plenty of time talking to each other. Lawyers should investigate the relevant issues and determine if the fraud has criminal dimensions.

Intellectual Property

Intellectual property covers copyright, patents, and trademarks. It can also extend protection to trade secrets, even though a company cannot register them. Google “hayes hunter trade secrets” to figure out how you can protect your secrets.

An employee can leak trade secrets to the media, which violates the company’s intellectual property. A company may steal someone else’s copyright, reproducing their original works.

Intellectual property lawsuits can be expensive and lengthy. Defendants have lost millions of dollars at trial for violating someone’s copyright protections.

You need to protect your own intellectual property by filing for protection. You should apply to the government for patents and trademarks. You should also talk to any vendors who will reproduce your products so they do not steal your ideas.

The Essentials of Business Litigation

Business litigation covers many business practices. A breach of contract occurs when the terms of a contract get violated.

Non-competition and insurance issues are breaches of contract. They can be costly, so both sides need lawyers.

A breach of duty relates to the expectations of a service provider. A customer expects a company to protect them, and they can sue the company when it doesn’t. Fraud and intellectual property violations can devastate a company.

The more you are aware of your rights, the more you can defend yourself. Find additional legal guides by following our coverage.