Business lawsuit cases can stem from various business-related issues and may involve many different parties. For the purposes of this article, however, we will focus on business lawsuit cases that arise between two businesses. The most common reason that a business may sue another business is for a breach of contract.
For instance, suppose a business enters into a contract wherein it agrees to purchase a certain amount of products from another business to be delivered at a certain date. If the other business fails to deliver those products despite already receiving payment, then the business purchaser can sue the business deliverer for breach of contract.
Litigation is not the only way that businesses can resolve their issues. Businesses can also choose to settle business disputes outside of the courtroom, using informal negotiation tactics and alternative dispute resolution methods.
In order to successfully settle business disputes, the parties will need to identify the best method to use to resolve their particular dispute. They should also hire an attorney for general advice, representation at the settlement conference, and to draft the final or review the final agreement if one is reached.
Additionally, parties who are involved in a business settlement should strive to keep an open mind, treat the opposing party with respect, and be prepared to compromise.
What Are Some Common Business Lawsuits?
There are many reasons as to why a business may take legal action against another entity. In the majority of such cases, the business filing the lawsuit is typically seeking some form of relief (usually monetary damages). A business may also request injunctive relief when they are trying to prevent further damage to their reputation, profits, or some other valuable asset related to the business.
Some common legal claims that might form the basis of a business lawsuit include:
- Breach of contract: As demonstrated by the example in the first section, many businesses will sue over a breach of contract when a party does not satisfy its legal duties in accordance with the terms of a contract. It is important to note that courts view businesses as being savvier than laypersons. Thus, the law affords businesses fewer protections when it comes to contract disputes.
- Intellectual property: Violating intellectual property laws (e.g., trademark, patent, and/or copyright laws) is a sure way to provoke a lawsuit. These laws help to protect owners of such properties. Thus, any infringement on the owner’s rights can result in a lawsuit. A business who infringes on another company’s intellectual property may need to pay damages for any economic harm they caused or may have to comply with an injunction.
- Mergers and Acquisitions: Although the sale of a business is mainly handled through contracts, there are some laws that business owners need to be aware of when they wish to merge, sell, or purchase another entity. Many of these regulations stem from antitrust laws, which are enforced by the Federal Trade Commission (“FTC”). A violation of antitrust laws can lead to serious civil and criminal penalties.
- Unfair competition lawsuits: These lawsuits are meant to protect consumers from injuries that result from unfair business practices, such as discriminating against customers and misrepresenting products when advertising to customers. If a business engages in practices that are unethical or harmful to consumers, then they may be facing a lawsuit.
- Unfair competition lawsuits can also protect employees, such as when they enter into an employment contract that contains an unreasonable “non-compete” clause.
- Securities and stocks: Corporations or financial establishments that issue securities (e.g., stocks and bonds) must adhere to certain state and federal laws that govern financial transactions involving securities and security interests. Companies that violate these laws may face a class action lawsuit brought by their investors.
Are Business Settlements And Security Settlements The Same?
Business settlements and security settlements are two different types of settlements. A business settlement is a generic term that is used to refer to settlements that involve a wide range of various business activities, including negotiating agreements, resolving disputes, and satisfying payments on a particular transaction.
On the other hand, a security settlement is a type of business settlement that specifically deals with the delivery of a security (e.g., stocks, bonds, futures, options, etc.) or a security interest in order to fulfill a contractual obligation (usually in lieu of money). For example, when a buyer purchases a set amount of shares, the seller must deliver that amount of shares upon payment.
Thus, if a settlement does not involve the delivery of securities like stocks and bonds, then it is more likely that the settlement is a standard business settlement.
How Do Business Settlements Happen?
Legal issues over business matters arise between parties all the time. Fortunately, there are a number of different techniques that parties can use to resolve conflicts without ever having to go to court.
For instance, the parties may choose to participate in informal negotiations to determine how to compensate a wronged party. If the parties can successfully reach a compromise, then a final agreement can be drafted and formally executed in far less time and legal fees than it would cost to complete a trial.
Another increasingly common way in which business parties can resolve issues is by using alternative dispute resolution methods. Some examples of methods of alternative dispute resolutions include arbitration (e.g., binding or non-binding), mediation, and facilitation. Similar to informal negotiations, these tactics can help each side not only save in legal fees, but also in time and other resources.
One other important benefit that settlements can offer is that parties may incorporate confidentiality and release of liability clauses in their final agreement. These can prevent future legal disputes and to keep certain issues as quiet as possible.
It should be noted, however, that settlement agreements must be written in compliance with both federal and state statutory regulations. Hence why it is crucial to seek legal assistance when negotiating and/or before signing a settlement agreement.
Parties should strive to settle business disputes out of court whenever possible. A lawsuit’s impact on a business can have devastating effects, such as bankrupting a business, exposing trade secrets that could give its competitors an advantage, and revealing scandalous information that might cause it to lose customers.
If the parties to a business settlement cannot reach an agreement, however, they may have no other choice than to go to court. For example, if there was a mutual misunderstanding over the terms in a business contract and the parties refuse to compromise on how to settle each side’s lack of performance, then they may need a judge to decide which party should receive relief and what type of relief they should receive if any.
Do I Need An Attorney To Help With My Business Settlement?
All legal matters can present challenging issues that may require hiring a lawyer to resolve them. This is especially true when it comes to matters like business settlements, which often involve complex legal issues and even more complicated laws. There is also a lot more at stake with business settlements than there is for other types of legal actions, including large sums of money and a person’s livelihood.
Thus, if you have any questions or concerns regarding a business settlement, then it may be in your best interest to speak to a local business attorney for further advice. An experienced business attorney will be able to help you navigate the business settlement process and can serve as your negotiator at a settlement conference. Your lawyer can also help you draft an agreement that places you in the best possible position based on the facts of your matter.
Additionally, if the issue is not resolved during the business settlement process or if a related issue arises that requires a judge to render a ruling on it, your lawyer can also provide representation in court.
