Common Types of Business Disputes
Breach of Contract
A breach of contract can take many forms:
- Existence of a Valid Contract - A contract is an agreement. Contracts can take many forms, may be written or verbal, and can sometimes be created by conduct. One of the first questions in a contract dispute is often whether a valid contract exists, and if so, the scope and interpretation of its terms. Even where a valid or enforceable contract does not exist, equitable claims may exist to enforce a reasonably relied upon promise, or to prevent unjust enrichment.
- Total v. Partial Breach - Partial performance, or failure to fully perform as promised may give rise to claims for breach of contract. In these instances, an important question is often whether the non-performing party’s conduct will allow the fully performing party to refuse further future performance.
- Prevention of Other Party’s Performance – Hindrance or prevention of another party’s ability to perform their obligations under a contract can constitute a breach of contract, excuse performance, and give rise to damages.
- Repudiation – A clearly communicated intention to refuse to honor a contract, or to perform an obligation required by contract, can constitute a breach of that contract, excuse performance by the other party, and give rise to damages.
Breach of Warranty
Warranties can be express or implied. Examples of warranties that may be implied by law include:
- Warranty of Merchantability – In many cases, the law creates a warranty that goods sold will be suitable for the ordinary uses and purposes goods of the same or similar type, and that those goods will be of a minimum level of quality expected in their industry. Failure of goods to conform to standard industry expectations may give rise to claims for breach of warranty.
- Warranty of Fitness - Certain conditions can give rise to a reasonable expectation by a buyer that goods will be suitable for one or more a specific purpose. Claims for breach of warranty of fitness can arise from a product’s failure to meet the buyer’s specific needs, even if the product conforms to reasonable industry expectations.
Unfair Business Practices
Unfair business practices can include a variety of conduct and may give rise to claims by competitors and/or customers. Unfair competition has been defined to include “any unlawful, unfair or fraudulent business act or practice” and “unfair, deceptive, untrue or misleading advertising,” and unfair trade practices include“ the creation or perpetuation of monopolies and to foster and encourage competition, by prohibiting unfair, dishonest, deceptive, destructive, fraudulent and discriminatory practices by which fair and honest competition is destroyed or prevented.” More specifically, unfair trade practices may include locality discrimination, discriminatory pricing, loss leader pricing, and the collusion or solicitation of unfair trade practices.
Product liability may arise from a defect or alleged defect in the manufacturing or design of a product, inadequate product warnings, breach of express or implied warranty, or negligent design or manufacturing.
The intentional or negligent interference with an existing contractual relationship (Contract Interference), or a prospective economic relationship (Business Interference), can give rise to legal claims for damages. The difference between lawful competition and tortious interference is often an issue of degree and intent.
Breach of Fiduciary Duty
Many business relationships can create a fiduciary duty of loyalty and care. This duty can exist between agent and principal; employee and employer; shareholders, officers, and directors and their company; and between partners.