A Guide to the Different Types of Business Disputes
A Guide to the Different Types of Business Disputes
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A Guide to the Different Types of Business Disputes

As a business owner or operator, business disputes are likely to occur at one point or another. Regardless of the type of business you run or the size of your business, some disputes are difficult to avoid and can be stressful to handle.

Understanding the different types of business disputes in Texas can go a long way in protecting your business and keeping operations running as smoothly as possible.

Contract Breaches

Businesses run on contracts — you can’t operate a business without them. Because they are so essential to the business world, contract issues are among the most common kinds of business disputes.

Whether you are creating or entering into a contract, it’s helpful to know what goes into a contract and how to avoid breaching it.

What Is a Contract?

A contract is an agreement between two or more parties creating a mutual obligation to act or refrain from acting. For a contract to be valid, there must be an offer, an acceptance, and consideration.

There are various kinds of contracts in the business world, including, but not limited to:

  • Employment contracts
  • Nondisclosure agreements
  • Lease agreements
  • Sales contracts
  • Purchase agreements
  • Partnership agreements

While contracts can be oral, business contracts are commonly written. Larger or more established businesses can have numerous active contracts at a time.

When Does a Breach of Contract Occur?

Whenever any party to a contract has failed to uphold their side of the bargain, there has been a breach of contract. A breach can happen in many ways. For example, an anticipatory repudiation typically occurs when the breaching party informs the party beforehand that they will not be fulfilling their part of the contract.

Texas law recognizes legal claims for breach of contract. To have a valid claim in Texas, the following elements must typically be satisfied:

  • There was a valid contract
  • There was performance by the plaintiff
  • The defendant breached the contract
  • The plaintiff sustained damages as a result of the breach

An attorney for business disputes can handle your breach of contract claim to help ensure the most successful outcome.

Purchase and Sale Disputes

One of the most common purchase and sale situations relating to business disputes involve real estate. Throughout the process of purchasing or selling, you may encounter several issues.

Some of the common disputes that may arise during the purchase or sale of property include:

  • Property insurance claims
  • Quiet title litigation
  • Escrow deposit disputes
  • Partition of real property
  • Real estate contract disputes

An experienced commercial litigation lawyer can pinpoint the issue with your purchase and sale dispute and take action to resolve the issue as quickly as possible.

Partnership Disputes

If you share your business with other partners, you may experience partnership disputes at some point. Creating and maintaining a business partnership can be challenging, and it’s common for personalities to clash.

Common partnership structures include general partnerships, limited liability partnerships (LLP), and limited partnerships. Choosing the right partnership for you depends on your needs, those of your partners, and the future of your business.

Components of a Partnership That Could Cause Disagreement

To have a partnership, you must create a partnership agreement that includes certain partnership-related details, such as:

  • The financial contributions of each partner
  • Member involvement
  • Buyouts and dissolutions
  • Guidelines for how profits and losses are divided among partners
  • Change of control
  • Procedures noting how decisions are to be made
  • Protocols for how to proceed with the business in the event of a death

Any of these details can cause issues among partners. When such disputes arise, it’s critical to tackle them right away so they do not impede upon your business.

Business Dissolutions

Businesses close their doors for many reasons, whether planned or unplanned. Dissolving a business isn’t as easy as it may seem. There are many details to consider, and when you have partners, disputes are to be expected.

Dissolving a business means can mean dealing with:

  • Business articles for closing your business
  • Division of assets
  • Cancellation of business licenses
  • Resolving matters with creditors
  • Handling accounting and tax matters
  • Issuance of legal notices

To minimize disagreements during a business dissolution, it’s best to involve business dispute lawyers. Your attorney can handle the dissolution process to ease you into your next chapter without your business.

Frequently Asked Questions About Business Disputes

Do Business Disputes Always End Up in Court?

Business disputes don’t necessarily need to go to court for resolution. Depending on the circumstances, you may have the opportunity to use methods of alternative dispute resolution to resolve your issues, including mediation and arbitration.

Can an Attorney Help Avoid Disputes Before They Even Start?

To protect yourself and your business from potential business disputes, it’s wise to involve a business attorney from the start. For example, to minimize the possibility of a contract dispute, you can have an attorney create your contract or negotiate your contracts for you.

Having a business lawyer on your side can have many advantages. Of course, in the event that you do face a business dispute, a corporate litigation attorney will provide high-quality representation throughout the process.

When Do I Need a Commercial Litigation Lawyer?

As soon as you sense a potential dispute or become involved in a legal matter, do not wait to discuss your situation with an attorney for business disputes. The sooner you involve your lawyer, the better the outcome can be.

Dunn Sheehan Can Handle All of Your Business Dispute Needs

When you’re faced with a business dispute, it’s important to seek assistance from a knowledgeable legal ally. A business litigation attorney can review the details of the situation and offer resolutions to help you and your business get back to normal.

The seasoned Dallas business attorneys at Dunn Sheehan have experience helping businesses of all sizes with a wide range of disputes and complex commercial litigation. Contact our firm to schedule your consultation today.

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