Firm-Wide blog

What Are Your Business Dispute Options?

By Burg Simpson
January 2, 2018
4 min read

Business owners operate under the cloud of potential litigation nearly every day. Whether it is a multinational corporation, a family-owned business, or a small sole proprietorship that has just opened up its doors, business owners and leaders often face legal issues that can take time and money away from their day-to-day operations. Business and commercial law is not simple stuff. There are federal laws, state laws, and dozens of regulatory agencies that may all be involved in dictating how business are – and are not – allowed to operate. Navigating this minefield and the litigation traps they can cause is not for the faint of heart – or for anyone who is not an experienced corporate litigation attorney. If you are facing a legal issue of any kind, do not put your company at risk by trying to handle it on your own. Get professional legal help.

Disputes You are Likely to Face

There are dozens of legal problems business owners can run into, but there are a handful of issues that crop up more often than most:

  • Breach of contract: A breach of contract occurs when one party fails to fulfill any terms of a contract without a valid legal reason. Breach of contract is one of the most common business disputes. While they might be resolved if the parties can agree to a modification of the original contract, sometimes this just is not possible.
  • Breach of fiduciary duty: A fiduciary duty exists between two parties when one party has a duty to act exclusively for the benefit of the other. The fiduciary party owes a legal duty to the principal party and, generally speaking, the fiduciary party should not profit from the relationship without explicit, prior consent from the principal. A fiduciary duty can exist in a variety of business relationships, such as the one between a board of directors and its shareholders, or between certain financial institutions and their customers.
  • Corporate governance disputes: Disputes among business partners can be emotional, complicated affairs. They can include arguments over responsibilities, a division of assets and/or liabilities, the ownership of intellectual property, buyout agreements, decisions about how the business is to be dissolved, or post-separation arrangements.
  • Fraud: Fraud is committed by an intentional misrepresentation of critical facts, or omission of those facts, causing another party to change their position – to their detriment – relying on the misrepresentation. Consumer fraud occurs when, during a business transaction, intentional false representations of fact are made, and the other party who relied on those statements suffered as a result.

Solutions to Business Disputes

When business owners find themselves threatened with any of these disputes, if a direct resolution is not possible, resolution can be found through one of three avenues: mediation; arbitration; or litigation.

  • Mediation: Mediation is when an impartial third party assists the parties in an effort to either reconcile their differences or convince them to adjust or settle their dispute. The mediator does not decide anything and can’t order the parties to do anything. Instead, their role is simply to facilitate communication between the parties to reach a reasonable, mutually beneficial decision. There are several advantages to mediation: matters are typically kept confidential; costs are usually lower than arbitration or litigation; the chances of salvaging the parties’ relationship may be greater.
  • Arbitration: Arbitration is a lot like an actual trial, but it moves more quickly and may have very limited rights. Under the parties’ agreement, arbitration can either be compulsory or voluntary and is rarely appealable. While arbitration is generally more expensive than mediation, it is often much quicker than an actual trial and the results can be confidential.
  • Litigation: If the parties have not agreed to mediation or arbitration, the parties can take the case to court, through litigation, where it can be decided by either a judge or a jury. Litigation can be costly, time-consuming, and everything that is presented – such as sensitive financial records – may be made public.

The simple truth is that there is no one-size-fits-all solution. Each case is different. The only way to find out which way will work best in your situation is to speak with someone who has years of experience in mediation, arbitration, and litigation. The Colorado commercial litigation lawyers at Burg Simpson can go over all the details of your dispute and walk you through all of your options. Contact us as soon as possible by calling 303-792-5595.

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