The Ten Types of Business Disputes You Can Face

If you own or operate a business, you know that sooner or later you will have to face disagreement. Unfortunately, these disagreements are often unexpected and can be extremely unpredictable. While it’s virtually impossible to avoid disputes altogether, careful planning and preparation can help you avoid them.

Eventually, however, you need to be prepared for the day when you have to protect your business interests, which could mean aggressive litigation. Whether you are on the verge of litigation or already named as a defendant, a business lawyer with broad experience in different types of disputes can provide the guidance you need.

1. Shareholder or Partnership Disputes

These disputes tend to arise at critical moments in the life of your business. The owners of the business may disagree over the direction the business is taking, whether to pursue new opportunities or how to change course in the face of adversity. Of course, disputes can also arise when there are disagreements over compensation or respective contributions. Here are some other ways that shareholder or partnership disputes can arise:

• Ethical breaches. Ethical breaches can create a lot of controversy, even if they don’t directly involve the partners or shareholders. They often lead to accusations over whether there were obvious problems that were overlooked or intentionally ignored. They also tend to lead to sharp disagreements over how to move forward.
• Minority shareholder frustrations. Minority shareholders are always at a disadvantage given their position. However, feelings of being ignored, disrespected, or frozen out can lead to acrimony and dissent.
• Disputes involving the shareholder or partner agreement. These agreements are often drafted and forgotten about. They later come under intense scrutiny when they prevent an individual or group of owners from leaving the business, selling their interests, or taking some other action prohibited by the agreement.

These disputes are often very difficult to resolve and often wind up in litigation. If you’re facing a shareholder or partnership dispute, an experienced business dispute attorney can help you get a handle on the situation.

2. Breach of Contract Disputes

Contract disputes are among the most common types of business disputes you may face. These can range from small-dollar disputes to disagreements that threaten the stability of your business. These disputes tend to fall into the following categories:

• Breach of performance. These occur when one party does not do what they are contractually obligated to do. This can be a failure to make payment, a failure to provide services, or a failure to deliver goods or products.
• Ambiguity. These are disputes that arise when the contract is unclear, which is often a problem with form contracts. Each side has a good-faith interpretation of certain terms and cannot come to an agreement over how the contract should be interpreted.

Depending on the complexity of the contract, these disputes can be very complicated.

3. Business-to-Business Disputes

Business-to-business disputes can arise between competitors or partners in a variety of contexts. These can include the following:

• Unfair or deceptive trade practices. This can include engaging in fraudulent or other deceptive activities such as false advertising, non-compliance with industry standards, or deceptive pricing.
• Unlawful interference. Sometimes referred to as “tortious interference of contract,” this occurs when one business claims that another has intentionally interfered in their relationship with a third business, resulting in economic harm.
• Breach of contract. We covered this above, but breach of contract disputes can arise in joint ventures and other relationships with business partners.

These disputes can not only be difficult to resolve, but they can absorb precious time, money, and other resources that could be devoted to your core business. An Atlanta business lawyer can not only help you diffuse costly business-to-business disputes but can also help you resolve them cost-effectively when litigation is inevitable.

4. Non-Compete and Non-Solicitation Agreements

Non-compete clauses, non-solicitation agreements, and other restrictive covenants have become increasingly common in recent years. Unfortunately, they can also lead to a fair amount of controversy in a competitive economy. Overly restrictive employment agreements can be intended primarily to dissuade employees from leaving while being unenforceable. At the same time, many employees take on new jobs without realizing the conflict that will inevitably arise. A business lawyer can help you draft fair and enforceable restrictive covenants that prevent disputes. They can also help you negotiate a fair resolution when these disputes arise.

5. Executive Contract Disputes

To attract the right talent, businesses will often offer executives employment contracts that can be very complex. While the complexity of these agreements may be a necessary evil, it can lead to disputes when the employee and the business decide to part ways. Disputes over compensation and termination are the most common issues involved when it comes to executive contracts. To further complicate matters, these contracts also often contain mandatory arbitration or mediation provisions that govern how you must proceed in resolving the dispute.

6. Technology Disputes

Technology has become the cornerstone of today’s modern economy. In addition to the ever-evolving tech sector, just about every business leverages technology to better serve their customers or simply to remain competitive. At their core, these disputes may ultimately be governed by a contract or other traditional legal doctrines, but the context of these disputes requires an Atlanta business lawyer with broad experience in technology matters. Some of the issues that can arise include the following:

• Breach of warranty claims where it is unclear whether the defect is the fault of the customer or the vendor
• Intellectual property infringement claims
• Disputes over agreements to provide tech services or equipment
• Litigation involving parts manufacturers

Technology disputes can be incredibly complex and yet carry enormous potential consequences for your business.

7. Disputes Involving Trade Secrets

Trade secrets can be vital to the value of your business, which is why businesses aggressively protect and defend any such information. Conversely, allegations that you have misappropriated someone else’s trade secrets can do grave damage to your business and your reputation. Trade secret disputes can include the following:

• Misappropriation of customer/client lists
• Obtaining and using confidential information such as financial or pricing data
• Copying and using business plans or presentations

These disputes commonly arise between a business and a former employee or employees who have started another venture or gone to work for a competing business. These cases can move very quickly and often involve numerous complex legal issues.

8. Loans and Debt Disputes

For many businesses, access to credit is essential for them to operate. Business loans are common, but complex disputes can arise over the following issues:

• Wrongful foreclosures
• Guarantor obligations
• Disputes involving the terms of the loan
• Valuation disputes

Lenders can be extremely aggressive in enforcing the terms of their loans which can do irrevocable harm to your business. Even if you are in default, an Atlanta business lawyer can help you negotiate a fair settlement that allows you to clear the debt yet continue operating.

9. Regulatory, Disciplinary, and Compliance Disputes

There are local, state, and federal laws and regulations that apply to almost every industry. These laws and regulations can change quickly, and business owners can be caught unaware. Unlike most of the other disputes on this list, regulatory and compliance disputes are usually between the business and whatever governmental or other regulatory body is responsible for ensuring your compliance. These kinds of disputes are especially common in the following industries:

• Healthcare
• Gaming
• Professional licensing boards
• Alcoholic beverages
• Securities
• Land use and zoning

These are highly complex areas of the law. A compliance or enforcement action can derail your business and threaten your livelihood. A knowledgeable lawyer can provide the counsel you need to navigate the applicable regulations, challenge regulatory actions, and successfully resolve disputes.

10. Real Estate Disputes

For many business owners, their real estate holdings are a secondary concern, but the reality is that every business needs an office, a storefront, a warehouse, or some other type of facility. Whether you own the property or rent, you may experience one of the following types of disputes:

• Land use and zoning disputes
• Eminent domain and condemnation proceedings
• Environmental issues
• Mortgage disputes
• Purchase or sale contract disputes
• Landlord-tenant disputes

There is often a great deal of money or value at stake in these disputes, and the issues can be complicated. An adverse result in a real estate dispute can have both immediate and long-term negative consequences for your business so it is important that they are handled appropriately.

How to Build Business Resiliency

It’s inevitable that disputes will arise, despite your best efforts. Rather than attempting to guard against every possible contingency, you should focus your efforts on building a resilient business that can withstand the potential disputes you may encounter. Here are some of the ways that you can build a strong, resilient business:

• Identify your potential risks, both internal and external
• Develop sound policies and procedures to help manage those risks
• Be proactive instead of reactive - disputes are often a result of neglect or carelessness
• Stay abreast of industry trends and any changes in the laws or regulations relevant to your business
• Invest in professional services - consultants, accountants, and attorneys can be powerful partners

Unfortunately, many business owners focus only on their day-to-day business operations and core business activities. Later, they find themselves facing a dispute that threatens everything they have worked so hard for.

When You Can’t Resolve Your Dispute

Disputes are sometimes unavoidable and, unfortunately, cannot always be resolved without going to court. In the event that litigation becomes necessary, we strongly encourage you to work with a business lawyer who has extensive experience with all stages and forms of the litigation process:

• Pre-litigation dispute resolution
• Settlement negotiations
• Discovery
• Motions practices
• Trials
• Appeals
• Arbitration and mediation

Business litigation often involves complex issues with significant value at risk. Your lawyer should be able to provide a global perspective paired with cost-effective, seasoned legal counsel that can help you achieve your business goals.

Business Litigation: Understand It, Don’t Fear It

No one wants to go to litigation. Unfortunately, many business owners sacrifice their success because they are worried about what it may cost or what the outcome may be. While litigation always involves careful consideration of the risks and potential rewards, pursuing litigation can be an investment in the future success of your business.

Of course, you may feel like you don’t have a choice if you or your business has been named in a lawsuit. That said, many business owners respond out of fear and elect to settle their case, doing considerable damage to their reputation and their brand. While the costs of litigation should always be taken seriously, sometimes you must defend yourself aggressively in order to protect the future of your business.