According to the Legal Dictionary, when a person, business, or entity enters into a lawsuit, whether they have filed the lawsuit, or are responding to it, they are entering into a process known as “litigation.” Lawsuits or “actions” are brought before the court for the purpose of enforcing a particular right. The process of litigation is actually a series of steps taken to resolve the matter, whether through negotiations toward a settlement, or a court trial.
However, in any occurrence of legal disagreement between businesses, corporations or companies with respect to various types of corporate issues can be subject to commercial business litigation. This happens when two or more businesses are involved in a disagreement and one of them sues the other. All business engagements fall under commercial litigation.
Below are the most common instances of commercial litigation. Let’s discuss them one by one.
Breach of Contract
Every contract tells us what each individual or party in a business agreement can and cannot do; whether the type of services will be provided, what will be paid, etc. The business world pretty much revolves on contracts, and when one party refuses to perform on what has been agreed upon, the other party can take legal action. Breach of contract disputes can include securities sales, products and services provided or promised, real estate dealings, mergers and acquisitions.
Elements of Breach of Contract:
- Valid contract
- The respondent’s breach
- Actual damage or loss
Here are the elements of a valid contract:
- Offer – agreement to the exchange of goods/services
- Consideration – promised value in exchange of the action or nonaction
- Acceptance – promise of the offeree indicating a willingness to be bound by the terms and conditions in the offer
- Mutuality – parties understood and agreed to the terms
Breach of Fiduciary Duty
Fiduciary Duty is the relationship between two parties wherein one has to execute in the best interests of another party. An example would be the company board member’s fiduciary duty to the company’s shareholders and consumers. If such violated, the affected parties can file commercial litigation suits.
Fraud / Deceptive Trade
Deceptive Trade refers to any occurrences of fraud or deception by a business entity to the public.
According to Duhaime.org, the United States of America has a 1966 Uniform Deceptive Trade Practices Act that is adopted by many states within their respective statutes. They define deceptive trade practice as:
“A person engages in a deceptive trade practice when, in the course of his business, vocation, or occupation, he:”
- Passes off goods or services as those of another;
- Causes likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
- Causes likelihood of confusion or of misunderstanding as to affiliation, connection, or association with, or certification by, another;
- Uses deceptive representations or designations of geographic origin in connection with goods or services;
- Represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he does not have;
- Represents that goods are original or new if they are deteriorated, altered, reconditioned, reclaimed, used, or second-hand;
- Represents that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
- Disparages the goods, services, or business of another by false or misleading representation of fact;
- Advertises goods or services with intent not to sell them as advertised;
- Advertises goods or services with intent not to supply reasonably expectable public demand, unless the advertisement discloses a limitation of quantity;
- Makes false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions; or
- Engages in any other conduct which similarly creates a likelihood of confusion or of misunderstanding.”
Such dispute refers to the conflict between the employee and his/her employer whether about benefits, health care, overtime or pay discrepancies, or discrimination of any kind.
This happens when a person or entity, whose not part of the contract, wrongly interferes in the agreement between the other two parties; this is considered to be as tortious interference with contract.
When an employee leaves a company, he or she may sign numerous non-competition, non-solicitation, and confidential agreements. These agreements state that he will keep the trade and business secrets of his employer. If one of those is violated, it could resort to the employer taking legal action against him or her.
Intellectual Property Disputes
This type of dispute refers to any violation of the intellectual property laws whether in patents, copyrights, trade secrets, trademarks, etc.
This means collecting of debts from either from mortgages, deeds of trust, promissory notes, and others. The term “debt collector”, as discussed in the Fair Debt Collection Practices Act, means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) below, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 1692f(6) of this title, such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests.
The term, however, does not include:
- any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;
- any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;
- any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;
- any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;
- any non-profit organization which, at the request of consumers, performs bona fide consumer credit counselling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and
- any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.
Building a business is definitely tough, and it’s even harder when you add different people and personalities, ideas, and experiences into the equation. Partnerships are crucial to maintain steadiness and encourage progress and success, but when these connections get controversial, one or more involved party may bring legal action to resolve the disagreement.
Due to the environment of most business organizations, conflicts and the ensuing litigation are inevitable. The key here is to be aware of what establishes a commercial business litigation case and as well as what can be done to resolve it.
Dealing with a Commercial Litigation Case?
At the Law offices of Nick Heimlich, we’re here to guide you through the process in handling any commercial business lawsuit or legal action. For more information regarding commercial litigation cases, or if you want to consult us about a pending case or dispute, please check out this page or you may also reach us through phone at 408-457-9364 or send us the information or inquiry via fax at 408-841-7630. Feel free also send us an email at email@example.com.