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5 Common Types of Commercial Disputes

Updated: February 28, 2023

Est. Reading: 4 minutes

Thousands of commercial disputes arise daily, ranging from breaches of fiduciary duties to trade secret infringements. Business owners may find themselves in a legal dispute, requiring the assistance of an attorney.

These disputes can include false advertising, business torts, breaches of contract between business partners or clients, and other legal issues. In short, non-compete agreements, copyright infringements, and intellectual property rights are all matters that can arise in commercial settings.

So, understanding the legal implications and procedures for civil or corporate litigation is important to protect your business's interests. Our experienced commercial litigation attorneys are ready to help, call us today at (623) 300-2727.

What is a Commercial Dispute?

Commercial disputes are legal issues between two parties involved in a business transaction. It consists of a breach of contract wherein one party fails to fulfill their contractual obligations. The aggrieved party can pursue litigation or alternate dispute resolution, such as arbitration. Disputes can arise over trade secrets, employee disputes, civil rights violations, and breaches of employment contracts.

Breach of Contract

Breach of contract is the most common type of commercial dispute. It occurs when one or more parties in a contract fail to fulfill their obligations or responsibilities. When two or more individuals or businesses are involved in a contract, the breach of that contract can result in financial harm or legal action.

Types of Breach of Contract

Contract breaches come in many varieties, including:

  • Non-Compete Clauses - Disputes that arise when the agreement between an employer and employee is breached because of a non-compete clause. These clauses generally prohibit an employee from working for a particular competitor after leaving the company.
  • Business Torts - Disputes arising from intentional or unjustified interference with business relationships, such as fraud, theft, or deceptive trade practices.
  • Business Contracts - Disputes that arise due to the failure of one party to fulfill their legal obligations as outlined in a written contract.
  • Employer/Employee Disputes - This dispute arises when an employer and employee disagree on any aspect of the employment relationship, such as wages or hours of work.
  • Financing Arrangements - Disputes arise when a loan or other financing arrangement is breached. In cases like this, a breach of contract claim will generally be filed in cases like this.
a close up of a man signing a business contract

Intellectual Property Infringement and Trade Secret Disputes

Intellectual property infringement and trade secret disputes involve the unauthorized use, copying, or disclosure of an idea, invention, or product. They can also involve trade secrets such as customer lists or formulas.

Recently, this has become one of the most common commercial disputes. As technology advances, the likelihood of intellectual property infringement and trade secret claims increases. In 2018, Apple and Samsung were involved in a long-running legal dispute over claims of patent infringement, among other charges. This case cost millions of dollars in legal fees and generated significant public attention.

Breach of Fiduciary Duty

In the corporate world, where directors, officers, and other agents have fiduciary duties to the company, a breach of fiduciary duty can give rise to a commercial dispute. It typically happens when a director or officer of a company acts in their self-interest instead of acting in the best interest of the company they are representing.

Fiduciary duties include the duty of loyalty, the duty of care, and the duty to act in good faith. A breach of fiduciary duty can result in legal action from the other party and potential monetary damages.

Corporate Disputes

Corporate disputes can involve a wide range of issues, such as shareholder disputes, mergers and acquisitions, boardroom conflicts, executive compensation matters, and disputes related to corporate governance. These types of disputes can be highly complex and require experienced legal representation.

Tortious Interference

Tortious interference is another type of dispute involving a third-party causing harm to a business. Typically, this occurs when an outside party intentionally interferes with two parties' contractual or business relationships. Common torts include defamation, interference with contract, and interference with prospective economic advantage.

Usually, the aggrieved party will seek legal remedies for damages, or in some cases, a monetary settlement may be negotiated. If the dispute does not settle out of court, it can result in a type of litigation called a tortious interference claim.

How Alternative Dispute Resolution Can Help

Society’s greatest opportunity lies in tapping the human inclination towards collaboration and compromise, in the most creative social experiment of our time.”

— Derek Bok, president, Harvard University.

From this quote, we can see the importance of alternative dispute resolution (ADR). ADR is a way for parties to resolve their disputes without going to court. ADR can include mediation, arbitration, negotiation, and other dispute resolution methods that do not involve litigation.

business partners meeting with a lawyer to divide their company

ADR is an effective way to save time and money and potentially preserve existing business relationships. It is often faster and less expensive than litigation and more often allows the parties to reach a satisfactory agreement for both sides.

It is becoming increasingly common for commercial entities to include arbitration clauses in their contracts as a form of dispute resolution. This type of dispute resolution often involves using a commercial litigation lawyer or mediator who can guide both parties during the process.

Common Remedies

The remedies available for a commercial dispute will depend on the type of litigation and the specifics of each case. Generally, common remedies include monetary settlements, mediation or arbitration, injunctions, return of property and/or assets, declaratory judgments, and criminal penalties.

Hire a Commercial Litigation Lawyer

Commercial disputes can be costly and time-consuming, but they don't have to be. With the right legal representation and knowledge of the types of business disputes that can arise, businesses can avoid costly litigation and expensive legal fees.

Let Monahan Law Firm handle your commercial dispute with the necessary skill and experience. We provide our business clients with comprehensive legal services, from court representation to all dispute resolution forms.

Our team of experienced Phoenix business attorneys has experience handling complex civil, criminal, and commercial litigation matters. Call us today at (623) 300-2727 and let our team of experienced business attorneys help you resolve your commercial disputes quickly, efficiently, and cost-effectively.

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Attorney Patrick Monahan

Patrick Monahan

Patrick Monahan is the managing partner of Monahan Law Firm, PLC. Patrick began his legal career practicing real estate, construction, and general business litigation.
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