Navigating the Most Frequent Forms of Business Legal Disputes

March 10, 2023

Running a successful business involves fostering a number of relationships. Business owners hire employees, use third-party vendors, have partners and shareholders, as well as a number of other relationships. Within any one of these relationships, a dispute can arise. Business legal disputes are never good for a company. They detract from the overall profitability, interrupt business operations, and even hurt the business’s reputation.

Unfortunately, it is virtually impossible for any business to avoid becoming involved in a dispute. Although there are some ways business owners can try and prevent a dispute from interrupting their business, the vast majority will find themselves in a legal dispute at some point. Below, our Houston business law attorney outlines the most common types of disputes, as well as how to resolve them and prevent them from arising in the first place.

Common Types of Business Legal Disputes

From breaches of contract to infringement of trade secrets and partnership disputes, there are many disagreements that can arise within a company. The most common of these include:

  • Breach of contract: A breach of contract is a legal dispute that arises when two or more people enter into a formal agreement, and one party fails to fulfill the terms of the contract. All businesses must enter into some kind of contract, whether it is a lease agreement, employment contracts, or agreements with third-party vendors.  As such, disputes involving a breach of the contract are some of the most common business disagreements.
  • Partnerships: There are many different types of disputes that can arise between business partners. Partners may disagree about the direction of the business, and how profits are to be distributed, and they may simply have different management styles. Due to the fact that these disputes involve the people who are most responsible for the operations of the business, they can significantly hurt a company, particularly when they are not resolved quickly.
  • Intellectual property disputes: Intellectual property laws protect a creator’s rights to their own original work. Disputes can arise within a business regarding who is the actual owner of the intellectual property or alleged patent, copyright, or trademark.
  • Employment disputes: There are a number of different types of employment disputes business owners must face. These can include discrimination, wage disputes, and harassment. It is not only current employees that may have a dispute, but former workers, as well. These individuals may file a lawsuit against a business owner for wrongful termination, or a business owner may take action against a former employee for a breach of a non-compete agreement.

How to Prevent Common Business Disputes

Of course, the best way to deal with common business disputes is to avoid them altogether. While this is not always possible, there are some tips that can help business owners avoid these costly and stressful disagreements. Some of the best tips to follow when avoiding business disputes include:

  • Draft strong contracts: The best way to avoid future business disputes is to have strong and legally-binding contracts in place. A business law attorney can draft clear, specific, and carefully written contracts that can help you avoid a dispute.
  • Seek legal advice early: If a complex issue arises and you are unsure of how to approach it, or you just sense that something is not quite right, speak to a Houston business law attorney as soon as possible. Getting the legal help you need early on in the process can inform you on how to best proceed and can even help you avoid a dispute.
  • Document everything: As a business owner, you know the importance of documentation, and it can also help you avoid business disputes. Retain copies of all contracts, emails, loan documents, accounting information, meeting minutes, and file notes. A business law attorney can also help you develop an effective document retention strategy.

How to Resolve Business Disputes

Due to the fact that most businesses cannot avoid disputes altogether, it is important that all business owners know how to resolve them. Fortunately, there are a number of ways to do it. These are as follows:

  • Negotiation: Through negotiation, the parties involved in a dispute can try and resolve it amicably. Negotiation is not the most formal way to resolve a business dispute. Typically, business law attorneys are involved, as they have the skills and experience that allow them to navigate the process more effectively.
  • Mediation: During mediation, the parties involved in a dispute meet with a neutral third-party mediator. The role of the mediator is to help the differing sides communicate and compromise so they can reach an agreement. Mediation is one of the most affordable and quickest ways to resolve business disputes. If the parties reach an agreement during mediation, all parties involved in the dispute must follow it.
  • Arbitration: Arbitration is very similar to mediation. The parties involved in the dispute will meet with a third-party arbitrator and make their arguments. After hearing from all sides, the arbitrator will make the final decision, which is something mediators do not do. Many business contracts specify that arbitration is necessary in the event of a dispute, which bars the parties involved from going to court.
  • Litigation: Litigation is the most expensive way to resolve a business dispute, but it is still sometimes necessary. Litigation occurs when one party files a lawsuit against another person. If the case is not settled outside of the courtroom, the details of a lawsuit also become public record, which is often very harmful to a business.

Call Our Business Law Attorneys in Houston Today

Regardless of the type of dispute you are facing, it can cause significant harm to your business. It is important to resolve these disagreements as quickly as possible, so you can get back to running your company. At Integrity Law Group, PLLC, our Houston business law attorneys can advise on the most effective way to move forward so your case is resolved in a fast and efficient manner. Call us now at (832) 263-1828 or fill out our online form to schedule a consultation and learn more about how we can help.

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