Commercial Litigation Frequently Asked Questions

Commercial litigation is a very general category of representation and businesses that have a legal dispute may end up in court or arbitration. Commercial litigation always involves a legal controversy relating to business issues and can be heard in either Federal or State Court.

 

The most common commercial litigation disputes include, but are not limited to: breach of contract, fraud, failure to pay a debt, breach of fiduciary duty, commercial landlord/tenant disputes and trademark infringements.


Common types of complex commercial litigation.

    1. Environmental law
    2. Banking and creditor/debtor issues, including lender liability
    3. Securities
    4. Business torts
    5. Regulatory disputes
    6. Constitutional law
    7. Products liability
    8. Professional liability
    9. Construction law
    10. Toxic torts
    11. Breach of contract
    12. Antitrust, unfair practices and trade regulation

What damages can I recover in the event of a breach of contract?

Failure to perform as specified in a contract without legal excuse is a breach of contract. The following remedies may be recovered for a breach of contract depending on the contractual terms.

 

Compensatory Damages are monies to reimburse you for costs to compensate you for your loss. Consequential and Incidental Damages allow for money losses caused by the breach that were foreseeable.

 

You may also receive attorney fees and costs that are recoverable if expressly provided for in the contract or by statute.

 

Liquidated Damages are damages agreed upon in the contract that would be payable in the event of breach. Specific Performance is a court order requiring performance as specified in the contract.

 

Punitive Damages are damages awarded to punish a person who acted in an offensive manner in an effort to deter the person and others from repeated occurrences of the wrongdoing.

 

Rescission allows the contract to be canceled and both sides excused from further performance. Any money advanced may also be returned. Reformation allows the terms of the contract to be changed to reflect what the parties actually intended.


What if I am involved in a commercial litigation dispute?

An important thing to remember is to retain all paperwork regarding the dispute. A paper trail will make your lawyer’s job easier and juries may find your case more believable when documents support your position.

 

Contact us here at Utah Trial Lawyers, we are experienced commercial litigation lawyers. We may be able to advise you so that litigation can be avoided or set the stage in the event that litigation is required.


What do you charge for representing clients in a business litigation?

Fee arrangements can be creative and we can find what will best fit your needs. Most commercial litigation cases are charged on an hourly basis. The hourly rate varies depending upon the nature of the dispute.

 

Occasionally business disputes are handled on a contingent fee basis or a partial hourly/contingent fee hybrid structure. The client is almost always responsible for paying the out of pocket costs incurred by the law firm. These costs include filing fees, service of process charges, court reporter charges, and travel expenses.


How long does a lawsuit take?

Lawsuits vary in time and the length of time a lawsuit takes depends on a number of factors. Complexity of the case, the number of parties involved, the willingness of the parties to resolve the case and the court’s schedule all affect how long the lawsuit will take.

 

A relatively simple suit not involving any complex legal or factual issues could be over in a few months. While a complicated multi-party suit could take years to resolve.


Who hear’s the case?

Most commercial lawsuits will be heard by a jury. If the parties agree, a jury may be waived, and the case heard by the judge. The decision of whether to have the case heard by a jury or a judge is a tactical one and depends on the facts and circumstances of each case.


Is there pressure to settle cases out of court?

Courts encourage settlement but cannot require parties to reach an agreement. It is usually in each party’s best interest to settle a case without going through a trial.

 

However, trials can be costly and consume time and resources that could better be spent on other things. Many parties find that they simply are unable to reach an agreement and if an agreement cannot be reached, the parties have the right to proceed to trial.


Can my case be heard in federal court?

Some litigants prefer to have their cases heard in federal court if possible. This is especially true if there is a concern about home-town bias. Federal courts have jurisdiction, to hear certain categories of cases.

 

If your case involves a federal law or a federal program it may be heard in federal court. Federal courts also may hear cases between citizens of two or more states if the amount involved in the suit is more than $75,000.


Who pays commercial litigation expenses?

A losing party may have to pay the costs of the lawsuit. Costs may include court filing fees, witness expenses and the costs of exhibits. Generally each party is responsible for paying her own attorney’s fees. However there are some exceptions that are listed below:

 

      1. Parties may have agreed in a contract to pay the other party’s attorney’s fees in the event of litigation
      2. Courts may award attorney’s fees to one party, if it is found that the other party engaged in bad faith or frivolous litigation, or pursued legal theories that have no merit
      3. The lawsuit may involve a statute that provides for payment of attorney’s fees

Can I appeal if I’m unhappy with the result of my case?

Appeals are usually an option, but it might not cure your dissatisfaction. Appeals are limited to deciding questions of law. Courts of appeal will hear arguments concerning jury instructions but probably won’t hear your argument that the jury should have reached a different decision based on the facts.

 

Jury verdicts are very hard to overturn unless there is absolutely no evidence to support the verdict. Juries who hear the evidence and see the witnesses are better able to judge close questions. If you do win your appeal, the most common remedy is that your case will be sent back for a new trial.


Can I be stopped from working by a former employer?

Enforceability of non-compete agreements depend on several factors. If an employee signs a non-compete agreement they are agreeing to not pursuit a similar profession. The employee cannot compete with their former employer after signing a non-compete. Under Utah law, the non-compete agreement generally is enforceable if it is reasonable in its scope.

 

Non-competes are routinely upheld if the terms aren’t overly broad in the time and geographical restrictions they place on the employee. The terms also have to be crafted narrowly to protect the company’s legitimate business interests.

 

A court will likely refuse to enforce a non-compete if you are prohibited from working anywhere within your state for the next 20 years, On the other hand, a non-compete restricting you from working in sales for a competitor within your metropolitan area is more likely to be found to be reasonable.

 

These agreements usually are enforced through injunctions. Damages and attorney fees may also be available to the company seeking enforcement.


If a verbal contract is breached, can I sue?

Contracts are usually written to ensure that all parties understand the agreement was legal and binding and there are certain contracts that must be in writing.  

 

Under Utah law real estate sales, leases, and commissions must be in writing. However, there are some contracts if agreed upon verbally that are treated the same as written contracts. If a person does not fulfill their part of the verbal contract, there may be grounds to sue.

 

The burden of proof and evidence rests entirely on the party who is trying to sue the defendant in cases where breach of contract has occurred but there is no written agreement.

 

This means that the plaintiff must prove indisputable guilt and the offending party doesn’t have to prove their innocence. In Utah, certain contracts can be enforceable regardless of whether it was made orally or in writing.


Can I Sue When a Business Interferes with My Clients?

When a company or individual wrongfully disrupts your contractual relations, then relief may be available through a tortious interference lawsuit. Tortious interference is filed when a person purposefully interferes with another person’s business relationships.

 

Charges can include mental distress and punitive damages.

 

The most common issues in interferences cases is whether the defendant knew of the contractual relationship, whether the defendant’s actions proximately caused the damage, and whether you suffered actual financial loss as a result of the defendant’s conduct.

 

Tortious interference claims also need a third party who’s aware of said business agreement and actual damage to the party who sustained the interference.


Do shareholders have any legal responsibility to one another?

Traditionally shareholders have no special responsibilities to one another. In closely held businesses, the majority shareholders can damage the interests of small shareholders.

 

Most investors do not want to buy closely held shares and minority shareholders have few options when their interests are compromised. Courts developed fiduciary duties among shareholders of closely held businesses in response.


Can We Recover from a Financial Advisor?

It happens too often in Utah that investor’s stockbrokers or investment advisors intentionally or negligently cause them to lose everything they invested. This occurs when the financial advisor gets you to invest in stocks or commodities based on bad advice or outright lies.

 

The key is in determining whether or not the financial advisor purposefully lost your funds or was negligent. If a financial advisor does not meet their part of the agreement, you may be entitled to receive compensation for breach of contract.

 

State and federal laws provide remedies for other types of losses incurred as a result of a financial advisor’s breach of fiduciary duty, misrepresentation, securities fraud, and unfair and deceptive trade practices. These laws are complex, and protecting your rights under them requires the help of a commercial litigation firm.


What Is a Complex Business Dispute?

A business dispute is usually labeled complex when the case involves multiple parties. A dispute gains more complexity when the number of factors involved grows. Simultaneous litigation in state and federal courts, in which motions have been filed in several different jurisdictions add to the complexity.

 

A business dispute can also be considered complex when it involves extensive review of business records or highly technical accounting, financing, insurance coverage, and tax issues.

 

White-collar crimes in business are often hard to catch. When someone catches wind of illegal activity, there is often extensive research that must take place to come up with the evidence.

 

If you find yourself caught up in a complex business dispute, it would be best to seek legal help from a professional who is experienced in commercial litigation law.


What is involved when litigating a business issue?

A business owner would follow the same process for business litigation as she would for any civil lawsuit. Including obtaining an attorney, pretrial matters, possible settlement negotiations, trial, and possibly appeal.


What is the difference between mediation and arbitration?

Mediation is a cooperative process and uses a neutral third party to facilitate consensus building and discussion. Arbitration employs a neutral third party who listens to both sides and makes a decision. Arbitration decisions are usually binding.


What is a class-action lawsuit?

A class action is a lawsuit where one or two named plaintiffs represent a much larger group of plaintiffs. Often the issue is where there has been an injury to a large enough group of people that individual litigation would be inefficient.


Can business entities participate in a class action?

Business entities can participate in a class action if the entities have an injury in common with a greater group of plaintiffs that have formed a class.


What is the legal fee arrangement for a class action?

Lawyers are traditionally paid on a contingency-fee basis in class actions. What this means is that the lawyers only collect legal fees if they win a positive judgment for the plaintiffs. Class action lawsuits are very costly, and due to the high costs, contingency fee arrangements are usually the best option.

If you have additional questions or would like to speak to us about a Commercial Litigation case, call us at 801-849-9300.