Running a business involves numerous decisions, risks, and opportunities, many of which can lead to legal challenges. Business disputes are a common part of the entrepreneurial journey, and when conflicts escalate beyond negotiation, they may require legal intervention.

What is business litigation, and how can it impact your company? This article sheds light on the concept, breaking down the different types of legal battles that happen in the business world.

Understanding Business Litigation

Business litigation refers to the legal process used to resolve disputes that arise in the context of commercial activities. These disputes can occur between businesses, between a business and its employees, or between a business and customers or clients. The issues in question may be related to breaches of contract, intellectual property infringement, shareholder disputes, or even allegations of fraud.

Litigation in a business context differs from personal legal disputes in both its complexity and the scale of potential consequences. The stakes are higher—commercial litigation can significantly impact a company’s reputation, finances, and operations. With so much at risk, it is important for business owners to have a deep understanding of what is involved.

Common Types of Business Litigation

Business litigation is a broad category that can include many types of disputes. Below are some of the most common forms of commercial litigation.

• Breach of Contract

In a situation where one party fails to uphold their end of an agreement, the other party may file a lawsuit in commercial litigation to enforce the contract or seek compensation for damages. This might involve disputes over terms of service, supply chain agreements, or partnerships.

• Employment Disputes

Employment-related disputes can include wrongful termination, wage and hour violations, harassment claims, and disputes over employee benefits or non-compete clauses. Resolving such disputes promptly and fairly is critical to maintaining a positive workplace culture and protecting the business from further legal complications.

• Intellectual Property Disputes

Intellectual property is often a company’s most valuable asset. Disputes can arise over patents, trademarks, copyrights, or trade secrets. A business might find itself in litigation if a competitor infringes on its intellectual property or if it faces accusations of doing the same.

• Partnership and Shareholder Disputes

When multiple parties are involved in the ownership of a business, disagreements can arise regarding how the business is managed or how profits are distributed. Business owners may find themselves in litigation with partners or shareholders over issues such as breach of fiduciary duties, financial mismanagement, or disagreements over the direction of the company.

• Fraud and Business Torts

Fraudulent activity, misrepresentation, and other business torts can also lead to litigation. These types of claims often involve allegations of deception, misappropriation of assets, or interference with business relationships. Such disputes can be particularly damaging to a company’s reputation and operations.

The Importance of Legal Representation in Business Litigation

Business litigation can be complex, involving multiple parties, extensive documentation, and intricate legal arguments. For this reason, it is important to have skilled legal representation. An experienced attorney can guide you through the litigation process, advise on potential legal risks, and ensure that your rights are protected at every stage.

Choi Law Firm works with businesses of all sizes to help you navigate commercial disputes. Our team of New Jersey commercial litigation lawyers offers strategic advice tailored to your specific needs.

The Litigation Process: What to Expect

While each business dispute is unique, there are general steps involved in most commercial litigation cases.

• Filing the Complaint

The litigation process begins when one party files a formal complaint with the court. This complaint outlines the legal issues, the relief sought, and the basis for the claim. Once filed, the defendant is notified and must respond within a specified time frame.

• Discovery Phase

The discovery phase is where both parties exchange information relevant to the case. This may include documents, emails, financial records, or depositions. The goal of discovery is to gather evidence that can support each side’s claims or defenses.

• Motions and Hearings

Before the trial, either party may file motions with the court, asking for certain actions or rulings. These might include requests for dismissal of the case or rulings on certain legal questions. Hearings may be held to resolve procedural matters before the case proceeds to trial.

• Trial and Settlement

If the dispute is not settled during the discovery phase or through negotiation, it will go to trial. During the trial, both parties present their arguments, submit evidence, and call witnesses.

The judge or jury then renders a decision. In some cases, parties may reach a settlement before the trial ends, avoiding the need for a full court proceeding.

When to Pursue Litigation Vs. Other Dispute Resolution Methods

While litigation is often necessary to resolve business disputes, it’s not always the best or most efficient option. Businesses can explore alternative dispute resolution (ADR) methods such as mediation or arbitration. These methods are generally faster, more cost-effective, and less formal than going to trial.

Mediation involves a neutral third party who helps the disputing parties reach a mutually agreeable solution, while arbitration is more formal, with an arbitrator acting as a judge. In some cases, these alternatives can save time and resources, and result in a more amicable outcome.

However, there are situations where litigation is the most appropriate course of action, especially when the other party is unwilling to negotiate or when a significant legal precedent needs to be set. A New Jersey commercial litigation lawyer can help determine the best approach based on your specific situation.

Why Engage in Commercial Litigation?

While litigation can be a challenging and often lengthy process, it serves a vital purpose in the commercial world. It provides a mechanism for businesses to protect their rights, enforce their agreements, and seek remedies for wrongs committed against them. If you find yourself facing a commercial dispute, it’s essential to act quickly and seek professional legal advice.

Our experience in handling these complex legal situations equips us to provide robust representation to our clients facing such challenges. We understand the nuances of commercial litigation and specialize in providing businesses with high-level legal representation.

With over 90 years of combined experience, we offer both preventive and responsive legal services, ensuring that your business is well-positioned to handle disputes effectively. Contact us today to speak with a skilled commercial litigation lawyer who can guide you through the process and help you secure the best possible resolution for your company.