If you’re an entrepreneur or corporate owner, there is a good chance that you will face a business dispute at some point. From misunderstandings to conflicts that can impact a company’s operations and bottom line, a business dispute should be addressed immediately to avoid disruption to the business — and recurrence in the future. Understanding some of the most common types of business disputes can help you identify conflicts early on and implement strategies to mitigate risk.
Here are five common legal issues in business disputes on Long Island:
1. Breaches of Contract
Contracts are an integral part of every business. These legal documents outline the responsibilities and expectations of the parties involved in a deal. When a party fails to perform their obligations in the manner specified by the terms of the agreement, they may be held liable for a breach of contract.
Issues that commonly arise in connection with a breach of contract can include the following:
- Non-payment for goods or services
- Failure to deliver goods on time
- Breach of confidentiality clause
- Failure to complete the job
- Performance below the standards that were agreed upon
Breach of contract matters can often be resolved with negotiation, mediation, or arbitration. A contract will often specify the dispute resolution method that should be used. However, if the parties cannot reach an agreement, litigation may be necessary to achieve a resolution.
2. Breaches of Fiduciary Duty
Breaches of fiduciary duty are another common type of business dispute. These conflicts can arise when someone in a position of trust — such as a business partner or shareholder — acts for their own personal gain, rather than in the best interests of the company. Examples of a breach of fiduciary duty can include self-dealing, misappropriation of assets, and failure to disclose material information to shareholders.
3. Partnership Disputes
Partnership disputes can arise when business partners do not agree on the direction the company should take. These matters are often complex — and they can be emotionally charged. While miscommunication is a major cause of partnership disputes, there are many types of conflicts that can occur between partners, including those involving profit division, allegations of misconduct, unequal workloads, and financial disagreements. It’s vital to take measures in advance to help avoid these costly and time-consuming disputes by entering into a well-drafted partnership agreement and setting clear standards for all partners.
4. Tortious Interference with Business Relationships
Tortious interference with business relationships refers to situations where one party intentionally damages another party’s existing relationship with a third party, causing financial harm. These claims can occur when a party interferes with a company’s contractual relations or prospective business relations. Examples of tortious interference with a business relationship can include spreading false information to damage the reputation of a business, persuading a supplier to break a contract, or improperly undercutting a pending deal.
5. Violation of Non-Compete Agreements
A non-compete agreement is a restrictive covenant that prevents an individual or business from competing with another for a certain period of time, within a specified geographical area. If a party signed a non-compete agreement with a business, they can be held liable for violating it if they started a competing business within the specified geographical scope or solicited clients from the former company. In the event a party breaks a non-compete agreement, the business harmed can file a lawsuit seeking their economic damages — or an injunction to stop the party from engaging in the competing activity.
Contact an Experienced New York Business Attorney
Business disputes are inevitable — and it’s critical to have a skillful business attorney by your side if you are facing a legal issue that could impact your company. Providing trusted representation and tailored legal services, Barnes & Barnes, P.C. handles a wide range of commercial matters throughout Long Island and New York City. Contact us at (516) 673-0674 to schedule a consultation.