Business litigation involves either a legal dispute between two companies, or a legal dispute between an individual and a company. In cases where there’s a valid legal dispute regarding a business agreement or transaction, an attorney is absolutely necessary. With that said, not every business disagreement or inconvenience are grounds for a lawsuit. This article discusses reasons/examples of when you should, or shouldn’t hire a lawyer for business litigation.
Please note, the content found on this page is based on opinion and is for informational purposes only. This content is not a substitute for actual legal advice. If you have an urgent legal matter involving your company, or another business, you should speak with a business law attorney directly.
When To Hire An Attorney
Your Company Is Being Sued – As a business owner, one of the most frightening experiences is being served with a lawsuit. This experience is intimidating regardless of the merits of the case. It is particularly daunting if you have a small company and do not have an internal legal department. It’s important not only to hire a lawyer, but to hire one that specializes in business litigation to defend the interests of your company.
Breach of Contract – When a contract is breached, and significant damages occur as a result of a breach, you may very well be entitled to compensation. Cases involving contract breaches are highly complex and have many legal elements. As a result, it’s necessary to consult with an attorney specializing in contracts when pursuing a claim, or defending yourself against one.
Non-Compete Agreements – In Florida, non-compete agreements can be enforced as long as they’re reasonable in protecting a legitimate business interest of the company. Certain factors involved in determining the legitimacy of a non-compete agreement may include: geographic location, length of time, and whether or not an employee has used the interests of the company to obtain an unfair advantage and/or caused damage to the business. Determining these factors are where an attorney comes into play. If you believe an employee legitimately breached a non-compete agreement, or you’re on the “other side,” and believe you’re being wrongfully sued for this reason, consulting with legal counsel is absolutely necessary.
Business Interference (Tortious Interference) – This has a significant amount of overlap with the aforementioned “non-compete agreement.” Business Interference, also known as Interference with Business Relations, or Tortious Interference occurs when one party intentionally acts in a manner which interferes with an existing business relationship, or potential business relationship. In other words, if there’s an existing/potential business relationship between two parties, and a third-party purposely sabotages it, someone may be entitled to compensation for damages resulting from the actions of the third-party. Needless to say, an attorney is needed for enforcing or defending against this claim.
Shareholder Disputes – There are several causes of shareholder disputes. For instance, minority shareholders of a company’s stock may feel undermined by majority shareholders. Moreover, majority shareholders may take advantage of the situation by keeping minority shareholders out of decisions, not issuing them dividends, tying up their investments, etc. It’s important to note, many States recognize this issue and have laws to protect minority shareholders. Therefore, consulting with an business litigation attorney that’s experienced in corporate law is essential for handling your claim whether you’re filing the claim, or defending yourself against one.
Shareholder Derivative Actions – A shareholder derivative suit is brought by a company shareholder on behalf of their corporation against a third party.
When Not To Hire An Attorney
When someone feels they were “wronged” by a business, especially a large corporation, sometimes the word “lawsuit” immediately comes to mind. While the actions of a company might be morally wrong, this does not always mean they’re legally accountable; furthermore, certain disputes may cause more trouble than they’re worth (literally and figuratively speaking). Below are instances where filing a lawsuit against a business is a bad idea.
Simply being unhappy with results – If a company performs a service in accordance with a contract but did a sub-par job, this alone is insufficient for a credible lawsuit. For example, if a landscaping company does work on your backyard, and it looks uneven in some areas, this may warrant a negative review or complaint, but it does not warrant the time/resources required in filing a lawsuit against a business.
You think you’re being overcharged on a bill – Once again, this may be frustrating; however, it’s seldom ever worth the extensive time required in hiring a lawyer for litigation against a business, particularly, a large corporation. This dispute is more suitable for channels such as customer service, or even public channels such as social media, Better Business Bureau, etc.
Minor damages to property – It can certainly be alarming if, for example, your car is dented by an auto body shop or your wall is scratched by a home repair company. With that said, these are not good reasons to go through the lengthy process of business litigation. Simply put, the legal fees required are likely to dwarf the cost of actual damages sustained.
Buying a consumer product that doesn’t work – Certain companies may have a lousy returns/refund policy but that does not make them guilty in a court of law. The business has to breach a legitimate contract and cause significant damages for a lawsuit to have merit in court.