A business dispute lawsuit is a type of legal action that a party can take when they have a disagreement about a business-related matter or with the business itself, and that disagreement violated the law. Business dispute lawsuits can arise from various business law issues and may involve many different parties. For example, a business can be sued by a consumer, a client, another business, or by a state or federal government agency. 

The following is a list of some common examples of the types of claims that can provide the basis of a business dispute lawsuit. These include:

  • Breach of a business contract or a specific provision within that contract;
  • Unfair competition lawsuits;
  • Disputes over debt and debt collection; 
  • Fraud or misrepresentation of facts;
  • Insider trading issues or violations of other securities laws;
  • Infringement of intellectual property (e.g., trademarks, trade secrets, copyrighted materials, or patents);
  • Breach of a confidentiality or non-disclosure agreement (“NDA”);
  • Zoning and land use disputes;
  • Damage to the reputation of a business;
  • Distribution of business assets (e.g., when dissolving a company);
  • Data breaches;
  • Antitrust lawsuits; and/or
  • Disputes over the sale or transfer of a business (e.g., mergers and acquisitions). 

As is evident from the above list, businesses are vulnerable to a lot of potential legal risks and liability. Each one of those claims can be combined into a single lawsuit, increasing the likelihood that the business will be liable for some kind of damages or will receive some sort of legal penalty. 

On the other hand, if you are the individual or entity who is filing the business dispute lawsuit, each one of those claims have different laws, deadlines, and requirements that you must comply with or else the case can be dismissed. If you miss a filing deadline or a court dismisses your case, then you could potentially lose your chances of recovering damages or other forms of relief (e.g., injunctions). 

In order to protect your business from being held liable or to ensure that you will have a fair chance to argue your case and recover damages, it is strongly recommended that you consult a local business attorney for further advice. 

Depending on the facts of your case, your lawyer will be able to either help your company file a lawsuit or defend your business against one, can discuss the types of remedies your business can receive or the damages that your company might be liable for, and can advise you on your legal options and inform you of your legal rights under the relevant laws.

How are Business Dispute Lawsuits Litigated?

The majority of business dispute lawsuits are not litigated, but rather result in settlements that take place outside of the courtroom.

The reason as to why more business dispute lawsuits end up as out-of-court settlements and not in front of a judge or jury, is because many companies have business contracts that contain provisions requiring legal disputes to be settled through alternative dispute resolution methods. In most cases, the method selected is usually arbitration.

In cases where an alternative dispute resolution method fails (e.g., the parties cannot reach an agreement) or a legal issue must be decided by a court, the parties may have to litigate the dispute. A party can initiate a lawsuit by filing a claim in the appropriate court. From there, they will need to follow standard civil law procedures, including:

  • Serving the opposing party with copies of the complaint and filing a proof of service document with the court after the complaint has been served;
  • Responding to the complaint or a counterclaim; 
  • Making requests for discovery and responding to requests for discovery;
  • Reviewing all discovery materials (e.g., documents relevant to the business dispute like contracts, receipts, account statements, correspondence, etc.) and complying with discovery rules;
  • Producing physical evidence related to the claim (such as a faulty product and proof of the damages sustained from that product);
  • Hiring both expert and lay witnesses to provide testimony at trial or to be deposed before trial;
  • Performing legal research for laws and cases that will support or discredit the claim;
  • Attending pre-trial hearings and conferences; 
  • Preparing for trial and conducting a trial; and
  • Various other steps that are necessary when litigating a dispute. 

In some instances, a party may discover they are in the wrong or another issue may come to light. This may encourage a party who previously refused to settle out of court to abandon their litigation strategy and to participate in settlement negotiations instead. Other times, a court may dismiss a lawsuit because no claim exists. If a court dismisses the case, then neither litigation nor a settlement will occur. 

If a business dispute involves a criminal matter, however, this process will be slightly different in a number of ways, including the parties involved, the kinds of consequences the outcome of the case can lead to, the legal terminology, and the type of court that will oversee the matter. Also, in criminal cases, the option to use alternative dispute resolution methods is generally not available for adult criminal defendants; only plea bargains or deals. 

Finally, as previously mentioned, business dispute lawsuits often result in a monetary damages award for the prevailing party. Depending on the facts of a case, this award can sometimes be a significant amount of compensation. 

The money can then be used to cover any financial losses that the non-violating party suffered, such as loss of profits or future earnings, loss of clients or reputation, and various other losses caused by the violating party’s actions. 

In addition, a violating party may face criminal consequences as well. This may include having to pay criminal fines or restitution, serving a prison sentence, and/or having a business license suspended or revoked. Thus, a business that is being sued for a dispute or a violation should strongly consider retaining counsel to assist in defending them against a claim.

Should I Hire a Lawyer for Help with a Business Dispute?

Business disputes can sometimes pose challenging legal issues that require in-depth knowledge of complex laws and possibly, the help of a legal expert in order to fully resolve them. Business disputes also tend to involve a lot of risks, such as the potential to bankrupt an entire company, lose large sums of money or business assets, and damage the reputation of a business owner or the business itself.

Therefore, if you have any questions or are involved in a business dispute, then it may be in your best interest to consult a local business attorney for further advice. An experienced business attorney will be able to help you navigate the business dispute process and can explain how various business laws may impact the outcome of your lawsuit. 

Your lawyer can also assist you in drafting and filing legal documents for your case, as well as can provide representation in court. Alternatively, if you and the other party wish to settle out of court, your lawyer can serve as your negotiator at any settlement conferences. 

Regardless of whether your business dispute is resolved through litigation or an alternative dispute resolution method, hiring a lawyer to advocate on your behalf can only aid in securing the most favorable results that are possible based on the facts of your case.