While businesses and their owners usually can resolve their differences informally, sometimes matters end up in court. Since litigation is expensive, time consuming and often distractive from business operations, it is something to be avoided. However, sometimes there is no better option.
The most common types of commercial litigation are contractual claims, including alleged breach of contract. These can result from disagreements over contractual terms. Sometimes the contract itself is unclear or does not specifically address the issue in dispute. In other cases, the parties dispute the meaning of the contract language or whether one party’s contractual obligations have been excused for some legitimate reason. Contracts may include liquidated damages clauses, which are designed to limit financial exposure for contractual breaches. However, the validity of these clauses is often challenged, either by a party sued for breach or by a party seeking damages beyond what the clause provides.
Another major source of litigation is commercial collections. To the average person, ignoring bills in the five- or six-figure range is unthinkable. However, payment delay in the commerce realm is a frequent occurrence. Some companies, for whatever reason, do not pay bills unless vigorously prompted or threatened with formal collection action. Cases that end up in court typically involve debtors who have unjustifiably defaulted or who are financially insolvent. The latter situation may entail litigating claims in bankruptcy court.
A good percentage of commercial litigation involves insider disputes among employees and/or owners. Employment discrimination, sexual harassment and retaliation claims are common in medium to large size businesses. In smaller, closely held businesses, there are often disputes over ownership rights, partner compensation and retirement packages.
Other common types of commercial litigation are these:
- Business defamation — This involves a company defending its reputation against allegedly false and injurious statements by a competitor or other party.
- Tortious interference — A company may sue a third party for actions that interfere with its contractual or business relationships.
- Theft — A company may seek damages for losses caused by theft of trade secrets, patents or other intellectual property.
- Negligence — A business may be sued for injuries arising from accidents occurring on its premises or caused by its employees’ conduct.
- Breach of fiduciary duty — Owners and directors of businesses, and particularly smaller enterprises, are often sued by owners/employees for failing to carry out the duties they owe to shareholders and others within the enterprise.
- Vexatious litigation — Occasionally, someone will bring a lawsuit against a business without cause or for an improper purpose. If the targeted business prevails, it can bring a claim of vexatious litigation, seeking reimbursement of attorneys’ fees, costs and other damages.
Clay Parker, Esq. in Orlando is a prominent business and commercial litigation law firm serving clients throughout central Florida. Feel free to contact us online or call us at 407-216-2504 to arrange a consultation.
