Close Menu
Switch to ADA Accessible Theme

The 3 Most Common Types of Business Disputes

BusLaw5

During the course of their life cycle, businesses encounter a variety of legal concerns. It seems the concepts of business and warfare are often interchangeable. Both have several terms in common – tactics, strategy, ruthlessness, and leadership.

The top three forms of business disputes are:

  • Professional negligence claims
  • Contract disputes
  • Shareholder disputes

All three can disrupt the business process and cost any organization greatly, possibly even making them no longer viable in the marketplace. It’s best to keep disputes out of court through negotiation or another method of dispute resolution. Unfortunately, some legal fights can only be resolved in the courtroom.

Professional Negligence Claims

A professional negligence claim is filed when counsel received from a qualified party turns out to be invalid, unsubstantiated, irrelevant, or incorrect and the business incurs a financial or material loss as a result of the inferior advice.

The first step toward filing a case against a professional adviser such as a surveyor, management consultant or accountant is to establish whether their actions violated their duty of care.

If a business or individual provided counsel to you or your organization on a professional basis in the absence of a formal arrangement or contractual agreement, a professional negligence claim can still be filed. The filing of a claim is viable if assistance from the professional is proven to be shy of industry standards.

Contractual Disputes

When one party fails to fulfill its obligations fully under a contract, breach of that contract occurs. Parties must act in a manner that’s suitable according to the heart of the contract.

Examples include:

  • Non-payment of goods or services
  • Substituting materials that are different than those outlined in the contract
  • Failing to meet deadlines

A multi-million-dollar construction contract can cause the project to come to a halt if a party fails to pay. Parties entering the agreement may disagree on the level of performance provided. The greater the risk, the stronger the drafting of the contract and your due diligence need to be. A business dispute lawyer in Florida will be able to help.

To minimize the magnitude of a breach of contract dispute, take the following steps:

  • Make sure you have a written contract. Verbal contracts can be binding, but in a legal battle, getting someone to stick to their word can be almost impossible. A written document makes it much more difficult for one party to deny their contractual responsibilities.
  • For large construction or corporate contracts, it’s best to put in clauses related to dispute resolution that can be executed if a disagreement arises.
  • Confirm that all parties entering into the contract comprehend their obligations and responsibilities under the agreement. Simple miscommunication is the primary cause of disputes.

Shareholder Disputes

Disputes among shareholders occur when stakeholders at the top level of the organization disagree over significant decisions that may greatly affect the business. This occurs more frequently with medium-sized and small companies who may not have the proper organizational considerations in place. Future planning and strategic procedure are not documented in writing beforehand.

It’s best to have a shareholders agreement in place that details aspects of the business such as the payment of dividends, how disputes will be resolved, and how voting rights will be distributed.

Work with a Double Board-Certified Business Dispute Lawyer Today

The experienced attorneys at Vocelle & Berg provide knowledgeable counsel for organizations facing any type of business dispute. We help businesses protect their profits by recommending the proper course of action that makes the most sense economically. Reach out to us today in Vero Beach.

Resources:

sba.gov/sites/default/files/files/PARTICIPANT_GUIDE_ORGANIZATIONAL_TYPES.pdf

hbr.org/1990/01/five-ways-to-keep-disputes-out-of-court