·  Legal News, Analysis, & Commentary


What Are the Different Types of Business Litigation?

— January 24, 2023

Everyone remembers the famous McDonald’s case, where a woman suffered third-degree burns and sued the fast-food giant.

Running a business is a delicate mix of different operations working simultaneously. As a business owner, you know how difficult it is to handle the responsibility of managing these operations, so having ample support across all departments is vital. So, what happens when things don’t go the right way within the corporation? What if the company is facing negligence and/or concerns with unlawful activities?

There are several types of business litigation cases that one can face. If you’re facing something similar to one of the following litigation concerns, then it’s time to find a lawyer.

#1 Breach of Contract

The first type of business dispute faced by many US companies is the breach of contract. Contracts or agreements are a byproduct of every collaboration that you have with employees, third-party suppliers, and other companies. Each contract will state the nature of the professional relationship between the concerned parties and is legally binding.

However, when one of the parties fails to adhere to these rules and regulations, it can be called a breach of contract. It is especially critical when the breach has put the company at risk. 

#2 Class Action

A class action is a case wherein multiple parties are affected by a single business malpractice. It is a difficult case to file in court since it can be challenging to prove the fact that numerous parties were impacted by that wrongful action. In fact, one of the classifying factors that make the litigation valid is when there are so many parties affected that it is impractical for them to be collectively part of the lawsuit. 

#3 Breach of Fiduciary Duty

Fiduciary duty is essentially the truthful, loyal, and faithful relationship between two parties, such as the company and its shareholders. Some of the ways in which one can claim a breach of fiduciary duty are a conflict of interest, self-dealing, misuse or misdirection regarding funds, failure to provide accurate accounting records, and more. It is imperative to have adequate proof that the fiduciary breached their duty and had unfaithful motives behind certain actions and transactions; simply claiming the fact won’t do. 

#4 Fraud

Man breaking glass with one finger, the word Cybersecurity superimposed; image by TheDigitalArtist, via
Man breaking glass with one finger, the word Cybersecurity superimposed; image by TheDigitalArtist, via

Today, there is a major shift in what companies see as their potential threat. Online crimes and breaches in cybersecurity are some of the biggest concerns, and many companies have faced fraud online. 46% of industry professionals identify cybercrime as their number one threat. Another cause of concern is tax-related fraud and disputes. 

A business litigation attorney will help you identify your grievances and file a case that will seek compensation for your economic damages.

#5 Disputes in Partnership

A company is often started by different partners and run by the contribution of shareholders. However, unforeseen circumstances and disagreements between partners can lead to disputes, and sometimes, cannot be settled solely through negotiation. These disputes could range from misuse of funds, disregarding the contract, or engaging in illegal practices. These could give rise to business litigation, and if you’re stuck in a similar situation, you need to look for an attorney

#6 Trade Secret Litigation

One of the ways in which businesses maintain the standard of ethics within the corporation is through protected trade secrets. The reason why these trade secrets are protected is so that no one can conduct unauthorized use of company property and information. The moment someone crosses the line and gets a hold of these trade secrets illegally, it is considered a breach of policy.

In such cases, consulting with a business attorney is necessary so that they can help you understand the fair means through which one can acquire this information, and what should be considered a violation of privacy. 

#7 Product Liability 

Everyone remembers the famous McDonald’s case, where a woman suffered third-degree burns and sued the fast-food giant. It is one of the biggest product liability lawsuits in the world, and one of the many ways in which companies get into legal trouble. It is a given that the products that the company creates shouldn’t, in any way, cause harm to the customer. But if it does, it could lead to grueling, arduous lawsuits which, if not settled, could go on for a long time and cost a lot of money.

Final Thoughts

No business would like to get into any kind of legal trouble. It can have a major impact on them, whether they’re the plaintiff or the one causing the case. These situations give rise to immense pressure since a lot is at stake.  It is, therefore, vital to have a legal team or a firm that could guide corporations to take the correct course of action.

Make sure to maintain complete transparency with your attorney. Attorneys will ensure that you’re following all federal and employment laws and help you create a proper structure for your business and its legal framework. Be prepared and handle any possible litigation case the right way. 

Join the conversation!