Business Litigation FAQ
- What Is the Difference Between Commercial Litigation and Business Litigation?
- What Is the Difference Between Commercial Litigation and Civil Litigation?
- What Are Reasons to Seek Business Litigation?
- Are There Alternatives to Litigation?
- Do Non-Business Owners Benefit from Retaining a Business Litigation Attorney?
- Can I Sue for Breach of Verbal Contract?
- Do All Commercial Litigation Cases Go to Trial?
What Is the Difference Between Commercial Litigation and Business Litigation?
Business litigation and commercial litigation are often used interchangeably, but there are some distinctions: Business litigation covers all disputes over setting up and running a business, including compliance issues with state and federal regulations, employment disputes, shareholder or partnership disputes, or breach of fiduciary duty. Commercial litigation (derived from its root word “commerce”) is more narrowly focused on disputes over contracts and transactions.
What Is the Difference Between Commercial Litigation and Civil Litigation?
Civil litigation involves lawsuits between individuals that do not involve criminal charges. Commercial or business litigation involves one or more business entities.
What Are Reasons to Seek Business Litigation?
The most common causes for business litigation include:
- Breach of contract – disputes over broken contracts ranging from non-compete agreements and non-solicitation agreements to vendor contracts, construction contracts, and more.
- Fraud or misrepresentation – any intentional deception of another for personal gain, such as embezzlement, misrepresenting material information, false financial information, payoffs, bribery, or kickbacks.
- Theft or misappropriation of intellectual property or trade secrets -- a trade secret is any protected, confidential information that, once released, could potentially harm your business. Texas law protects those trade secrets from misuse by employees, partners, or officers of your company.
- Breach of fiduciary duty – when we enter into an agreement or relationship with another party who, per the agreement, has an obligation to act in our best interest, we are creating a fiduciary duty. Company directors have a fiduciary duty to act in the best interests of their shareholders, trustees have a duty to protect the trust, financial advisors have a duty to serve their clients. It is illegal to violate that duty of trust and confidence.
These are only a few of the most common reasons to seek relief through business litigation. If your business or investments have been injured by the failure of another party to abide by governing laws or regulations or an existing agreement, speak to a Houston business litigation firm to discuss your case and the available resolutions.
Are There Alternatives to Litigation?
Yes, the alternatives to litigation are known as alternative dispute resolution. The two primary methods of alternative dispute resolution are arbitration and mediation. Arbitration is a private process in which both parties agree that an arbitrator (a neutral third party) will review the case and render a binding decision. Mediation is a negotiation facilitated by a mediator trained in dispute resolution and often takes place while parties await a court date (or arbitration conference) with the goal of reaching a “win-win” solution to the dispute.
Do Non-Business Owners Benefit from Retaining a Business Litigation Attorney?
You do not need to be a business owner or executive to need the services of a business litigation attorney. If your dispute involves a business entity or business transaction – including investments into a business opportunity – your matter is best handled by a Houston business litigation attorney with in-depth knowledge of Texas’ business and commerce codes and experience litigating commercial matters in Texas courts.
Can I Sue for Breach of Verbal Contract?
Most valid verbal contracts are legally enforceable in Texas unless the agreement is required to be in writing by Texas’ statute of frauds. For a contract to valid in Texas, it must meet certain conditions:
- An offer;
- Acceptance in strict adherence to the terms of the offer;
- A meeting of the minds, which is the subpart of offer and accepted elements, not independent elements;
- Communication (either in writing or verbally) showing that each party has consented to the terms of the contract; and
- Mutual consideration (a benefit each party gets, or expects to get, by entering the contract).
In addition, Texas’ statute of frauds, located in Texas Business and Commerce code, Section 26.01(b), requires certain agreements to be in writing before a court will enforce them. These include:
- Suretyship, which applies to “a promise by one person to answer for the debt, default, or miscarriage of another person,” i.e., a loan agreement
- Contracts that are not performable within one year of making the agreement
- Promises by an executor or administrator to answer out of his own estate for any debt or damage due from his testator or intestate
- Certain medical arrangements
- Sales of real estate or leases of real estate for a term longer than one-year
- Agreements for oil or gas commissions
Texas courts may enforce verbal contracts as long as all of these conditions are met.
Do All Commercial Litigation Cases Go to Trial?
Retaining a business litigation attorney and filing a lawsuit does not mean that your matter will end up in trial. Often, disputes can be resolved before trial through informal settlements, mediation, or even arbitration. Your Houston business litigation team can help you devise a strategy that best meets your business objectives.