What Does Commercial Litigation Cover?

by admin on June 10, 2010

Commercial litigation is the area of business law that involves business disputes. The dispute can be between two businesses or a business and an individual. The most common causes of commercial litigation are:

Contract disputes
Partnership disputes
Shareholder disputes
Employee disputes

In each of these cases, a business lawyer can help your business to get the most favorable results from your litigation.

Contract Disputes

A contract is a promise between two or more parties to perform certain actions under certain conditions. Contract disputes arise when one party believes the other party is not upholding its terms in the contract and seeks to use litigation to enforce the terms as agreed. Contracts can be written or verbal, and in many cases both are enforceable.

Contract disputes can be very serious for both parties, and failure to enforce the terms of a contract can threaten the existence of a business. Contract disputes are one area where early work with a business lawyer can be advantageous. Writing good contracts is the first step to avoiding contract disputes. An authoritative contract will discourage would-be violators and put you in a better situation if a dispute does arise.

Partnership Disputes

Going into business together is a lot like a marriage, and partnerships have about the same success rate. After an initial “honeymoon period” business partnership disputes often begin over disagreements about business decisions, profit sharing, or work sharing. A partnership contract that is well written can help partners resolve these disputes amicably to keep working together. If necessary, these agreements can also help partners extricate themselves from a partnership that is completely failed, potentially without destroying the business.

Shareholder Disputes

Shareholders often have disagreements among themselves. Sometimes, majority shareholders can act in oppressive ways to prevent minority shareholders from participating in business decisions. Majority shareholders can sometimes unfairly utilize company resources to subsidize personal finances, or use their power to give themselves compensation that is not commensurate with their performance or the performance of the business. In these cases, minority shareholders can use commercial litigation to rein in the abuses of the majority.

Employee Disputes

Sometimes an employee, either current or former, may feel he or she has not been treated fairly by the company. The issue may be one of compensation, hours, promotions, or recognition for work done. The issue may also include accusations of sexual harassment or discrimination on the basis of race, gender, disability, or other factors. Other times, an employer may have a dispute with a current or former employee for theft of company property or ideas, or violation of a noncompete clause. In all these cases, a business lawyer can help businesses resolve the employee dispute with a minimum of damage to the business and its reputation.

Mediation and Arbitration: Alternative Dispute Resolution

Commercial litigation doesn’t always mean going to court. In many cases, disputes may be resolved using alternative dispute resolution techniques: mediation and arbitration. Mediation allows parties to a dispute to talk through the issue in a less antagonistic way, with a third party that listens and makes suggestions as to possible solutions. Mediation is often non-binding. Arbitration is more like a court appearance: both sides make arguments and the arbitrator or panel of arbitrators make a decision about how to resolve the dispute. Mediation often leads to compromise, arbitration is more often an all-or-nothing decision.

About the Author:
If you want to learn more about commercial litigation and how a business lawyer can help your business in a legal dispute, please visit the website of Dallas business law firm Polewski & Associates.
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