Common Causes of Commercial Litigation

The world of commerce, while driven by collaboration, has more than its fair share of disputes. Businesses often find themselves embroiled in legal battles with other enterprises. Understanding the common reasons for these lawsuits can help keep them from arising. 

Here’s a breakdown of some of the most frequent causes of commercial litigation:

• Breach of contract — Contracts form the backbone of business-to-business dealings, outlining rights and obligations. When a party fails to uphold their end of the bargain, a breach occurs. This could involve missed deliveries, failure to meet quality standards or non-payment. Ambiguous contracts with unclear terms or unexplained contingencies can also lead to disputes. Businesses with poorly drafted contracts are particularly susceptible to lawsuits.
• Intellectual property infringement — Innovation is key in the information-driven economy. Businesses invest heavily in developing and leveraging intellectual property (IP), such as patents, trademarks, or copyrights. Unauthorized use of these properties can spark lawsuits. This can encompass anything from manufacturing products that infringe on a competitor’s patent to using a logo that closely resembles another brand’s trademark.
• Negligence and torts — Businesses have a duty to observe specific standards of care in their operations. When negligence leads to harm to another business, a lawsuit might ensue. This could involve faulty equipment causing damage during a product delivery or a construction mishap impacting a neighboring business. In addition, one business might tortuously interfere with another business’s contractual relationships or prospective economic advantage.
• Trade issues and disputes — International trade agreements and regulations can be intricate and confusing. Failure to comply with anti-dumping laws (against selling products below fair market value), import restrictions or customs regulations can result in lawsuits between businesses or even trigger government intervention.
• Misrepresentation and fraud — Businesses rely on accurate information during transactions. When a company misrepresents a product’s capabilities, provides misleading financial data or engages in fraudulent conduct, the deceived party can sue to recover damages. Such lawsuits can include claims of false advertising, manipulated financial statements or deceptive business practices.
• Partnership and joint venture disagreements — Businesses often collaborate through partnerships or joint ventures, but conflicts can arise regarding profit sharing, decision-making processes or the direction of the venture. Disagreements over intellectual property ownership or allocation of resources within the partnership can also lead to litigation.
• Non-disclosure agreements (NDAs) — Businesses frequently share confidential information during collaborations or negotiations. When a party breaches an NDA by revealing this information to unauthorized individuals, the other party can file a lawsuit for compensation.

Law Offices of Donald W. Hudspeth P.C., PC in Phoenix, Arizona takes a practical approach to business litigation. By identifying your goals and pursuing them with the appropriate litigation strategy, we are able to control costs and resolve disputes in a timely manner. To schedule a consultation, call our firm today at 866-696-2033 or contact us online.