Business disputes typically arise between businesses or companies when they disagree over the terms of a contract that binds both parties. Breach of contract is a common example of a business dispute. What causes a business dispute can depend on many factors, including but not limited to:
- The specific nature of each business involved, as a dispute between two similar businesses will likely be much different than a dispute between differing businesses;
- Their history of dealings, or whether they have history at all prior to this dispute; and/or
- State and local jurisdictional laws that could influence what is considered to be a business dispute, and what may be done about it in a legal context.
Contract disagreements can frequently form the basis for many different types of business disputes. One party might not believe that they were paid the proper contract price, or one party might believe that they were not delivered the goods and/or service that they were promised in the contract. Another example of such a dispute would be if the product was delivered, but outside of the agreed upon timeframe as stated in the contract.
Businesses that deliver goods or services to customers can also frequently experience disputes with their customers. These types of disputes most commonly involve issues such as whether the goods or services were delivered at all, or were delivered up to the standard expected.
Additional examples of common business disputes include:
- Businesses generally provide implied warranties stating that the products sold are both functional and operational. When the products do not meet these standards, or if the products harm any consumers, claims against the business are often filed;
- Employment claims are commonly filed in relation to businesses, especially claims involving hiring, promoting, and termination practices. Businesses are not legally allowed to discriminate or harass its employees; those that do, expose themselves to business claims and various legal consequences; and
- Business disputes can also stem from the unapproved or unauthorized use of trade secrets, confidential information, intellectual property, and other sensitive or protected business information. An example of this would be if one company uses another business’ logo without their permission. A business dispute would likely manifest over any of the profits generated by the unauthorized use of the logo.
How Can Business Disputes Be Resolved?
Generally speaking, businesses cannot make themselves immune from all legal liability. However, businesses can limit the possibility of certain business disputes from happening. By creating sound policies, as well as procedures governing day-to-day interactions with employees and transactions with other businesses, businesses can reduce the possibility of business disputes.
An example of this would be a business that utilizes standard, industry approved forms and documents with boilerplate language for all business dealings. Doing so would make such businesses less likely to be involved in disputes regarding contract terms.
Additionally, businesses should have clear policies in place for hiring and firing their employees to help avoid employment disputes. Businesses that work directly with retail customers should utilize liability waivers, or ensure that all products have clear and visible product warnings. Doing so can help avoid liability for injuries caused to consumers.
If a dispute cannot be avoided, it may be necessary to rely on a small claims court filing. This can help address or resolve outstanding bills, debts, or employment issues. However, it may only address the issue when the damages amount falls within the small claims’ filing limitations.
Businesses often rely on an Alternative Dispute Resolution (“ADR”) clause in a business contract. Such clauses require that any legal disputes relating to the contract are to be resolved through binding alternative measures, other than through the court system. Two examples of alternative dispute resolution are arbitration and mediation. In general, these types of dispute resolution processes must be exhausted before a lawsuit can be filed.
Arbitration is similar to a standard trial in that both parties must argue their case before an “arbitrator.” The arbitrator reviews the disputing parties’ claims and arguments, and presents a workable resolution that can benefit both parties. Mediation is another similar type of conflict resolution process between multiple parties, and is also facilitated by a neutral third-party known as the mediator.
However, mediation differs from arbitration in that the mediator does not make an actual decision regarding the parties and the resolution. Rather, the mediator’s singular goal and responsibility is to attempt to help the parties come to a workable resolution on their own.
If disputing parties cannot resolve their issue outside of traditional court channels, one party may need to file a lawsuit against the other for damages, or other business remedies.
What Is Business Litigation?
Simply put, litigation refers to the process of taking legal action. The word “litigation” can also be used in place of “lawsuit”, which is a proceeding by one party against another in the civil court of law. Litigation involving complex business matters can quickly turn into long and costly affairs. Because of this, businesses often try first to negotiate a settlement through the means previously discussed.
Business litigation in particular involves a great deal of complex issues and means of resolution. Some examples of this would include breach of fiduciary duty in addition to the examples mentioned above. Additionally, lawsuits are public record, which means that a lawsuit could potentially ruin a business’ public image.
Are There any Unique Laws Governing Business Litigation in Colorado?
It is important to note that each state will likely have differing laws regarding business and business litigation. Colorado maintains antitrust laws, as well as deceptive trade practices laws. Under the Unfair Practices Act, 6-2-111, private business lawsuits are possible and the attorney general may bring action on behalf of the state of Colorado.
Deceptive trade practices refer to blatant acts of fraud and tampering, or blatantly lying. There are several types of actions that are prohibited under Colorado’s deceptive trade practices laws, and false advertising is forbidden. Class action suits are allowed, and the following parties may bring suit:
- The attorney general;
- Private citizens that suffered actual damages; and
- Any district attorney, such as the district attorney for your local county.
Should I Hire a Colorado Business Lawyer if I Have a Legal Dispute?
If you are involved in any business disputes, you should contact a skilled and knowledgeable business attorney. Business litigation can quickly become very complicated, time consuming and difficult to resolve. State laws regarding business litigation not only vary, but can often change. An experienced business attorney will be aware of current law, and how that may affect your case.
Additionally, a business attorney can help the disputing parties resolve their dispute, whether through binding arbitration, mediation, or litigation. An experienced attorney can also help resolve your case favorably and quickly in order to save resources while representing your rights as needed in court.
If you live in Colorado, you should consult with a business attorney to determine what steps may be necessary to resolve your business dispute. A local Colorado attorney will be aware of what Colorado specific business litigation laws will influence your case, as well as any statutes of limitations and caps on damages awards.
