Commercial disagreements require dedicated knowledge and experience. When a commercial dispute arises, Huber Thomas Law is serious about getting results for our clients. We have experience representing clients in suits involving breaches of contracts, violations of fiduciary duties, fraudulent transactions, and many other types of commercial disputes. We understand these complex cases and have tried many in state and federal courts across the U.S. This is what you need to know if you're facing one of these legal matters.
What Are Commercial Disputes?
In the simplest terms, a commercial dispute is a dispute that involves two separate business entities (companies and/or individuals). A commercial dispute is one of the most common legal issues for businesses.
Because commercial disputes represent the potential for serious financial and structural harm, consulting with a commercial litigation lawyer in the earliest stages of a dispute can lead to the most positive outcomes to resolve your matter.
What Are The Most Common Types Of Commercial Disputes?
The most common types of commercial disputes include:
- Breach of contract
- Violation of fiduciary duties
- Breach of trust by a business partner
- Fraudulent transactions
- Breach of confidentiality or a nondisclosure agreem
- Trademark infringement
- Whistleblower cases
- False advertising
Let's look at each of these in more detail.
Breach of contract
Arguably the most common type of dispute, a breach of contract occurs when one of the parties in a contract breaks the terms of the contract. This includes not only violating the terms but also the timeframe. If, for example, a contractor agrees to complete their scope of work in two months but takes twice that time, they are in breach of contract.
Violation of fiduciary duties
Sharing trade secrets, improperly using a business’s funds, profiting at the expense of an employer: these are all examples of violations of fiduciary duties. Acting on behalf of a competitor is another form of this type of commercial dispute.
Breach of trust by a business partner
A breach of trust by a business partner is similar to a violation of fiduciary duties. The difference is that it is not an employee, a customer, or a client who is acting inappropriately, but another partner in the business.
Some examples of fraudulent transactions include:
- Writing checks for which there are no funds
- Offering stolen merchandise or services that cannot be delivered
- Asking for refunds under fraudulent circumstances (such as when the service has not been completed or paid for in the first place)
Breach of confidentiality or a nondisclosure agreement
One party cannot disclose information provided in confidence to another without the other party’s permission. This concept exists in medical and legal relationships in the U.S., and it also applies to commercial relationships and transactions. Although breaking a nondisclosure agreement is not usually a criminal matter, civil action against it is possible, especially if the breach leads to a financial loss.
Passing off a trademarked product as your own or using a trade or service mark in an unauthorized way is a type of deceptive trade practice. Do note that trademark infringement can be challenging to prove, and the burden of proof lies on the party bringing the dispute.
A whistleblower is a person who reports illegal conduct at a company. A whistleblower may need legal assistance when bringing illegal conduct to light. Conversely, a business may need legal help to manage a complaint against them. In some cases, a complaint may even be fraudulent.
In general, companies cannot make unfounded claims about the benefits of their products or services as a way to convince consumers to make purchases. More serious fraudulent misrepresentation can be as simple as saying a product is one thing when it is something entirely different, such as claiming that a piece of glass is a diamond. It can also be subtler, such as overstating a product’s benefits.
Depending on their scope, making unfounded claims like these can cost companies millions of dollars and injure their reputation.
What Else Is Considered A Commercial Dispute?
We’ve looked at some of the most common commercial disputes. However, commercial disputes can also include any of the following issues that can affect the health of your business.
Because these issues aren't as common, they usually require the support of a legal team with dedicated experience in these types of cases.
In this type of commercial dispute, one party interferes with or otherwise disrupts another party’s business relationships or contracts. For example, one of two competing contractors does something that negatively impacts the other’s ability to do business with a shared resource or customer.
Restraint of trade
To “restrain trade” means to reduce competition in the marketplace. Restraints of trade hurt consumers because they do not allow the market to respond freely to competition. An example of a restraint of trade is if two competitors make an agreement to set prices at a certain level or to boycott a supplier. These types of anti-competitive actions can also hurt businesses that are affected by them.
Monopoly practices can also restrain trade. A monopoly occurs when a business has a very high level of control in the marketplace. If a company abuses this market power, they can hurt other businesses.
Theft of trade secrets
Stealing a company’s trade secrets is illegal. A trade secret is a company’s secret, proprietary information that could harm the company if it was made public. If this information is stolen or shared with competitors, a business may need legal assistance to bring a case against the person responsible.
Trade libel and commercial disparagement
Trade libel includes actions such as writing fake negative reviews or defaming a business in another way. If the false statements cause financial loss, you may have a trade libel case.
Slightly different than trade libel is commercial disparagement. This specifically targets a business and its trade as opposed to making statements about an individual at the business.
How To Resolve Commercial Disputes
Commercial disputes don’t always end up in court—in the majority of cases they resolve beforehand in mediation or arbitration. Huber Thomas Law can help you use alternative approaches to litigation to resolve a commercial dispute. If these approaches fail, we’re ready to go to protect your interests. Here's what to expect.
If at all possible, the best solution minimizes legal action. Direct negotiation is a good first step. This means reaching out and sitting down to discuss options, trying to reach a compromise that suits both parties.
If one party will not meet, then it’s time to seek legal representation and consider other options.
Mediation uses a neutral third party in a structured setting to help guide a productive conversation towards a solution. This process usually takes several meetings. Although it is often quicker than meeting in court, both parties in the commercial dispute need to be willing to negotiate.
Mediation clauses in contracts have become more common as a way to steer clear of commercial litigation.
Arbitration is similar to mediation because both parties get a chance to present their side to a neutral third party. In this case, the neutral party is usually a panel of industry experts in the field or another legal professional. Both parties have an opportunity to present witnesses and evidence. Once the arbitrators make their ruling, it is legal and binding.
Arbitration is another type of commercial dispute resolution that is becoming more common in contracts.
State or federal court
If the above methods are not successful, or one party does not comply with the ruling, commercial litigation in state or federal court is the next step. The case will either be settled before it goes to court, or it will be heard before a judge.
This type of resolution is the most costly for both parties and the most time-consuming. It’s best to make every effort to avoid commercial litigation, but sometimes it is the only effective strategy.
The Huber Thomas Law Approach
At Huber Thomas Law, we know that commercial disputes can bring your business to a halt. On top of the potential financial challenges they bring, commercial disputes can be emotionally and physically draining. Our team is here to support you and to fight for your rights.
We prepare every case as if it’s trial-bound, consulting experts, deposing witnesses, and collecting information from the individuals, companies, and professionals who have harmed our clients.
Next, we bring it all together using state-of-the-art technology that helps us drive home our case before judges, juries, and arbitration panels. This strengthens our position at the negotiating table in seeking settlements and allows us to excel in the courtroom if we do reach the trial stage.
While we prepare for every case as if it’s going to court, we attempt to reach a good result out of the courtroom first.
We get results
A sample of our case victories proves that our dedication to our clients gets results. For example, we secured a massive victory against home health care companies and physicians committing Medicare fraud, securing a $42 million judgement for those who suffered harm.
In the case of a failed business venture, we secured a $3 million settlement for our client.
Getting a settlement and avoiding a trial might be the best path, but we work hard in the courtroom, too. When a business owner was written out of a deal by his partners, we won our client $5.7 million after a seven-week trial.
Commercial disputes don’t always reach the courtroom, but if they do, our team is ready.
Businesses come to us for help because we get results. While each disputes presents unique legal issues, what remains consistent is our dedication to applying our combined skills and resources to see each client’s case through to its resolution.
If you’d like to discuss the details of a commercial or other business dispute, please contact us. We offer free consultations for clients in Louisiana, Texas, Mississippi, and nationwide.