Whether you’re running a small local business or managing a larger company, legal conflict is always a risk. These lawsuits often arise from day-to-day business relationships that begin with good intentions but go sideways due to poor documentation, unclear expectations, or miscommunication. As a commercial litigation attorney, we often see the same types of disputes again and again—many of which could have been avoided with better planning.
While litigation is sometimes unavoidable, being aware of the most common legal issues businesses face can help prevent future problems. Our friends at Eric Lindh Foster Law, LLC discuss how commercial disputes can disrupt business operations, strain partnerships, and damage reputations.
Breach Of Contract
This is by far the most frequent type of commercial lawsuit. When one party fails to follow through on their obligations—whether it’s missing a delivery deadline, not making payment, or refusing to provide agreed-upon services—the other party may seek legal action. Contracts that are too vague or missing important details often create confusion about each party’s responsibilities.
To reduce risk, we recommend reviewing all agreements carefully before signing and putting everything in writing. Clear timelines, deliverables, payment terms, and remedies for nonperformance should all be included in every contract.
Partnership And Shareholder Disputes
Internal conflicts between business owners, partners, or shareholders often turn into legal disputes when there’s no written agreement on roles, decision-making authority, or profit distribution. These disagreements can lead to stalled operations, lost revenue, and in some cases, the dissolution of the business.
A well-drafted operating agreement or shareholder agreement is one of the best ways to prevent these issues. These documents should outline how decisions are made, how disputes will be resolved, and what happens if a partner wants to exit the business.
Business Fraud And Misrepresentation
Claims involving fraud often come up when one party believes the other intentionally misled them—such as providing false information about financials, capabilities, or assets. These cases can involve both civil and criminal elements, depending on the facts.
The best way to avoid this type of lawsuit is to conduct proper due diligence before entering any major business relationship or transaction. Verifying key information and working with legal counsel during deal negotiations can reduce exposure to bad faith actions.
Intellectual Property Disputes
Companies often end up in court over issues involving trademarks, copyrights, or trade secrets. Whether it’s a branding conflict, copied content, or stolen proprietary information, intellectual property disputes can become expensive and time-consuming.
Registering IP rights early and keeping clear records of development can help protect business assets. When hiring contractors or employees, using written agreements that assign ownership of created materials to the business is also essential.
Employment-related Litigation
Lawsuits involving current or former employees are common, especially in matters involving wrongful termination, wage disputes, or alleged discrimination. While these cases often fall under employment law, they frequently overlap with broader commercial issues that affect company operations.
Documenting employee expectations, having clear policies in place, and training managers to follow appropriate procedures are all practical steps businesses can take to minimize exposure to these claims.
Being proactive is the best way to stay out of court. Many legal disputes can be avoided entirely with clear documentation, consistent communication, and timely legal advice. We help businesses build strong foundations to reduce their legal risks and maintain healthy working relationships. By identifying potential problem areas early and addressing them in your contracts and internal policies, you’ll be in a stronger position to avoid disputes altogether.