In today's Freedom Friday blog and email newsletter, I'm going to answer one of the most frequently asked questions I get asked. As soon as people know I'm a lawyer, I inevitably get asked, “What kind of law do you practice?” Up until recently, I was answering that question by saying “Business law and civil litigation,” and, while that is mostly correct, the phrase “civil litigation” automatically gets construed as a tort lawyer, of which I am not. I don't practice plaintiff's personal injury, thank God. However, after thinking about it some more, I have a better answer, “Business law and business-related litigation”. In fact, my practice is divided almost 50-50 between business law, which would be what's considered “transactional” practice, and what's called “business litigation” or also sometimes called “commercial litigation,” which is a broader term. Of course, the next question, for those needing the litigation side of my service, what kind of cases are there, out there. So, in today's Freedom Friday blog and email newsletter, I'm answering the question: “What kinds of business disputes end up in court?”
There are five (5) different types of business disputes that end up in court:
1. Partnership Disputes
The first type of business dispute that ends up in court, and I am involved in several of these, are partnership disputes. This also includes disputes among members (or owners) of an LLC. It also involves what's called “business dissolution” cases, which is essentially a business divorce. I am involved in many of these disputes. Sometimes these disputes can be resolved amicably through mediation. However, often times, when there is a significant breach of trust between partners or LLC members, or any other kind of co-owners, these disputes cannot be resolved in a pre-litigation manner, and so they end up being resolved through a lawsuit in the courts.
2. Shareholder Disputes
The second type of business dispute that ends up in court, and I don't have a lot of these cases, because they are less common in representing small businesses, is shareholder disputes. If you have a corporation, there are shareholders, and sometimes shareholders have a problem with the management or the board of directors of the corporation. In this case, a lawsuit regarding this type of issue is called a “derivative” suit, and this can be for mismanagement or misconduct resulting in loss of profits or other damages.
3. Employment Disputes
The third type of business dispute that ends up in court, and again, I don't have a lot of these cases, is employment disputes. These are also less common in my practice because I represent mostly small businesses, and small businesses generally use independent contractors and fewer employees. If you do have employees in your business, Oklahoma is an “at will” state, which means you can fire your employees at any time and for any reason. However, some employees may claim they were fired for an illegitimate or illegal reason, such as discrimination. Independent contracts may also sue if they believe their contracts were violated by the business. In addition, sometimes a company will need to sue a former employee or former independent contractor for violating company policies or their own contracts, too.
4. Breach of Contract
The fourth type of business dispute that ends up in court, and perhaps this is the most common that I see with my clients, is breach of contract. There are many different kinds of contracts which can be breached, but other than a dispute regarding the operating agreement of an LLC (or partnership agreement), the most common issue is usually that of a commercial claim or commercial collections matter. In other words, a customer of the business didn't pay its bill. I represent several companies where they have needed to sue or at minimum hire my law firm to send a demand letter for this reason. This is not the only kind of breach of contract case as there are many others, but this type of lawsuit is very common.
5. Customer (or Consumer) Disputes
The fifth type of business dispute that ends up in court, and again, I don't handle a lot of these cases, although I handle a few, are customer (or consumer) disputes. These cases are when a customer or consumer sues a business over such issues as defective product claims, mistreatment they received by the business, false claims, etc. These types of issues go beyond a customer or consumer complaining to a company's manager, and they are serious disputes involving significant amounts of alleged damages. Sometimes these disputes can be resolved through mediation or arbitration, but many of them result in litigation, too.
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