Common reasons why businesses get sued

If you are a business owner and you’ve never had the pleasure of being sued, or suing someone else, then, first, congratulations!! Second, you should pay attention anyways because this blog will provide information applicable to all businesses who want to avoid being sued.

Here’s a list of common business disputes that frequently end in litigation:

Breach of Contract Cases

Breach of contract cases are varied and are often determined by taking a deep dive into the granular facts of what happened. Perhaps you feel that the other party did not perform the contract according to the terms you agreed upon. Perhaps you believed you were contracting for certain services, and, at the end of the day, those services did not comport with your expectations. Sometimes only part of the contract is adequately performed, or sometimes payment is wrongly withheld. Who decides what is “adequate” or “sufficient” performance and what constitutes “poor workmanship”?

Examples of breach of contract cases often involve breach of service agreements, agreements with your vendors, your commercial lease, breach of employment agreements, confidentiality agreements, non-solicitation agreements, and more. It is best to have an attorney who understands where businesses may be vulnerable draft/review your contracts.

Business Partner Disputes

It’s a sad fact that sometimes business relationships deteriorate over time. People’s lives change; maybe one partner is carrying more of the workload, while the other partner has other responsibilities that take time away from the business. Most often, a legal dispute can ensue when one partner wants to leave, or is being asked to leave, and there is no governing document to address how the departure of a partner can and should happen. Further, it’s common that parties have difficulty agreeing on what the payout to the departing partner should be. Sometimes the reasons for the dispute are not so mundane, and one partner has committed fraud or overtly breached your business’s governing document. Theft, misuse of business’s intellectual property, inappropriate competition with the business, breach of fiduciary duties, or breach of employment contracts are all common examples.

Construction / home repair lawsuits

Accusations of poor workmanship or violations of Ohio Consumer laws, which can be confusing and burdensome for small businesses to understand and comply with are both frequent sources of litigation in residential construction cases. Commercial cases bring with them their own set of complications. Whether you are a contractor, an architect, a commercial real estate developer/manager/landlord, you may find yourself in construction litigation. Common issues involve improper scoping of projects, issues related to poor performance, defective work, timeliness, and more.

Injunctive relief

Sometimes getting someone to stop doing a certain behavior is just as important as collecting the monetary damages that you may seek via a lawsuit. One common scenario we see is when a business needs to stop another business from inappropriately using confidential information to compete or violating a non-competition agreement or non-solicitation agreements. Here, a former employee may be using your businesses confidential info to compete, or blatantly violating a non-compete/non-solicitation agreement. The behavior itself needs to stop and waiting a year or more to litigate the full facts of a situation will result in irreparable harm to your business. In this situation, you need the court to issue an order that forces the party to stop competing or using your confidential information.

Employment disputes

Your business could find itself in a dispute with a former employee and/or a government agency. Breach of employment contracts, discrimination suits, wage and hour claims, and claims made to the Equal Employment Opportunity Commission (“EEOC”) or the Ohio Civil Rights Commission (“OCRC”) are specialized areas that require a seasoned business litigation attorney to evaluate the facts and zealously represent your interests in court or through a governmental administrative process.

Intellectual property lawsuits

A big part of your business could be tied to its intellectual property. Lawsuits arise when someone or another business misuses or steals your intellectual property, i.e., trademark, trade secrets (confidential client lists, marketing strategies, processes and procedures), your copyrighted material, and any patents you may have. If you find yourself in this position, you need a good business litigator to represent your interests. If you find that you are accused of violating an agreement, this area is very nuanced, and you will need a good business litigator to help you prevail in court.

A good business litigation attorney is in the best position to help business owners anticipate certain common disputes (i.e., your weaknesses) so they can be addressed before a lawsuit gets filed. If a lawsuit is filed, you need an attorney with experience at every stage of litigation, including pre-trial, investigation, pleadings, motions practice, discovery, jury and bench trials, and settlement. Contact Wick Law, LLC today for more information.

Wick Law, LLC is a small business legal practice, representing owners, investors, and entrepreneurs in all aspects of commercial, corporate, and business law, estate planning, contracts and negotiations, business litigation, and real estate. For more information: Contact 614-572-6366, visit www.mwicklaw.com, or email us at mwick@mwicklaw.com. Wick Law, LLC is located in Columbus, Ohio.

(Materials in this article have been prepared by Wick Law, LLC for general informational purposes only. This list is for educational purposes and is not to be considered exhaustive. More items could be added to this checklist based upon the type of transaction or industry standards. These materials do not, and are not intended to, constitute legal advice. The information provided is not privileged and does not create an attorney-client relationship with Wick Law, LLC or any of the firm’s lawyers. This checklist is not an offer to represent you. You should not act, or refrain from acting, based upon any information in this checklist. Wick Law, LLC maintains offices in Columbus, Ohio, and has lawyers licensed to practice in Ohio and in the United States District Court, Southern District of Ohio. The firm does not intend to practice law in any jurisdiction where the firm is not licensed.)