Commercial litigation is a branch of law that covers a wide range of business and workplace disputes and issues. Any business will want to avoid this type of litigation as much as possible, as it tends to have a negative impact on your business as well as your individual livelihood. The best way to avoid commercial disputes is by adopting conflict resolution processes, like mediation and arbitration, as organizations have reportedly seen between a 50% and 80% reduction in litigation costs. Know these common types of commercial disputes and you’ll be even more likely to avoid them.
Contract Disputes
As a contract is a legal agreement between two or more parties, any breach of one can give legal grounds for a lawsuit. The creation of a contract simultaneously creates an obligation to do or not do certain things. When one party fails to adhere to the terms of a contract’s agreement, the other can seek legally-mandated compensation. Contract disputes can range from a supplier failing to deliver a company their agreed-upon goods to employment disputes with former employees over the terms of their hiring contracts.
Corporate Disputes
Corporate disputes is an umbrella term that can encompass a number of different legal disputes that corporations and partnerships may face. Common corporate litigation can include challenging mergers, acquisitions, and financing arrangements. While these are issues that are focused on the larger moves of the business, there can be more personal instances of workplace conflict that transform into corporate disputes. For instance, a shareholder of a company may bring a suit alleging that officers or directors of the company had a conflict of interest while making a transaction that ultimately harmed the company.
Tortious Interference
In tortious interference, a person or business in a contract with a third party can sue that party if they knowingly interfered with the contract to cause a breach. That breach would have also had to result in damages to one or both parties to fall under tortious interference. A business tort is the actual claim for intentional or negligent wrongdoing in a business relationship. One of the more common instances of tortious inference is when an employee who has signed a non-compete clause in their contract breaches it by working with another company that is aware of the clause. The company that has the non-compete clause could sue the employee for breach of contract as well as the other company the employee worked with for tortious interference.
While many conflicts in the workplace do not go far enough to become commercial disputes, they are still fairly common. However, by practicing effective workplace mediation and conflict resolution, companies can avoid costly litigation.