1-2. Business Litigation
Sometimes business disputes arise, and when they can't be resolved through negotiation or arbitration proceedings, business litigation can be used as a way to remedy the situation. Whether it's a private individual or a business entity that has a legal issue with another business entity, we will look at what is business litigation. Challenging commercial litigation cases often involves significant pretrial discovery including extensive document demands, depositions, and pretrial motions. The effective and efficient handling of such business litigation involves setting out strategic and detailed efforts to ultimately prevail as well as an effort to resolve disputes before trial.
We offer skilled legal representation in many areas of the Business Law . Our law firm knows business and will work with you to accommodate your needs.
Common Issues of Business Litigation:
- Breach of Contract
- Breach of Fiduciary Duty
- Business Fraud
- Intellectual Property Dispute (Infringing Patent, Trade Mark or Copy Rights)
- Tortious Interference with Contract
- Construction Obligation
Each business form subjects the business owners to different levels of liability and taxation. For example, shareholders of a C corporation are generally not personally liable for the debts of the corporation, while the partners in a partnership are personally liable for the debts of the partnership. However, partnership income flows through to the individual partners and is taxed only once while corporate income may be subject to double taxation: once at the corporate level and a second time at the individual level if the corporation pays dividends. A business lawyer can guide you through the different forms that may be appropriate in your situation, and explain the various administrative requirements you need to follow when starting up as well as on an annual basis.
1-2-1. Breach of Contract
When two parties sign a contract, each expects the other to perform its contractual obligations. Unfortunately, this does not always occur. Contractual breaches can arise from disputes over the meaning of contractual terms, from unexpected circumstances that affect a party’s ability to perform or from a party simply refusing to live up to its contractual obligations. Whatever the case may be, contractual breaches can amount to substantial losses for the non-breaching party. A breach of contract attorneys from the Williams & Williams P.C. can aggressively advocate on behalf of a wronged business to help it get just restitution or compensation.
Issues in a breach of contract suit
Determining when a party is in breach is not always straightforward, especially when contract terms are vague or subjective. Moreover, breaching parties may have numerous defenses in a typical breach of contract suit. But each breach of contract lawyer at the Williams & Williams Law Firm has the litigation experience necessary to recover on or defend against contract claims, including claims arising under the California version of the Uniform Commercial Code. Our attorneys have successfully prosecuted and collected on cases involving the sale of goods where the opposing party failed to pay for the products that it either resold or used in its business.
A breach of contract occurs when a party fails to perform under the terms of the contract. This can cause the non-breaching party significant damages, including the costs of finding a substitute to fulfill the contract terms. The non-breaching party may have several options for recovery, including enforcing the contract on its terms, canceling the contract and suing for repayment of money expended, or suing for liquidated damages as specified in the contract.
In some cases, computing damages can be complicated. This is especially true when the non-breaching party suffers consequential damages — such as losing a contract with a third party because the goods received from the breaching party were late or defective. A l litigation attorney must often rely upon expert reports or other reliable sources to prove such damages
1-2-2. Breach of Fiduciary Duty
A fiduciary duty is an obligation to act in the best interest of another party. For instance, a corporation's board member has a fiduciary duty to the shareholders, a trustee has a fiduciary duty to the trust's beneficiaries, and an attorney has a fiduciary duty to a client.
A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and reliance on the fiduciary to exercise his discretion or expertise in acting for the client. The fiduciary must knowingly accept that trust and confidence to exercise his expertise and discretion to act on the client's behalf.
When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter. The client is entitled to the best efforts of the fiduciary on his behalf and the fiduciary must exercise all of the skill, care and diligence at his disposal when acting on behalf of the client. A person acting in a fiduciary capacity is held to a high standard of honesty and full disclosure in regard to the client and must not obtain a personal benefit at the expense of the client.
1-2-3. Business Fraud
The various ways a victim can be defrauded are as limitless as the bounds of human ingenuity. But under California law, wrongful actions are generally characterized as civil "fraud" only under one of the following legal theories:
1. Intentional Misrepresentation
Probably the most common type of fraud is a false statement. But not every false statement is fraudulent. The elements of a claim for intentional misrepresentation are:
a. An intentionally or recklessly false statement of fact. Not every false statement is a false statement of "fact." Statements of opinion generally are not actionable. Sales talk, or "puffing" ("This is the best location in the county!"), is generally not actionable. However, if the defendant claims to be an expert or there are other reasons to expect that the victim would rely upon the defendant’s opinion as a statement of "fact," an opinion may be treated by the court as a statement of fact. Also, a statement need not be made directly to the victim. For instance, if the defendant made the false statement to a third person with the expectation that the statement would be repeated to the victim, the victim may have a valid claim for fraudulent misrepresentation.
b. Intention to defraud. If a representation of fact was intentionally false and a material part of the transaction (e.g., "this house does not have flooding problems"), it is likely the false promise was made with the intention to defraud the victim.
c. Reasonable reliance upon the false statement. The victim must have actually relied upon the statement to change his or her position (e.g., the victim would not have purchased the house if he or she knew the truth). The false statement need not be the only reason the victim changed his or her position, but it must be at least part of the reason. Also, the victim’s reliance on the false statement must be reasonable. If the victim knew or should have known the statement was false, the victim did not reasonably rely. The sophistication of the victim will play a role in determining whether his or her reliance on the statement was reasonable; e.g., a sophisticated real estate investor’s reliance on a representation about the qualities of a house may not be reasonable while an unsophisticated buyer’s reliance may be. Even an unsophisticated victim, however, "may not put faith in representations which are preposterous, or which are shown by facts within his observation to be so patently and obviously false that he must have closed his eyes to avoid discovery of the truth." Seeger v. Odell (1941) 18 Cal. 2d 409.
d. Resulting in damages. There must be measurable damages that were caused by the fraud. It is not enough that the victim was told a lie (e.g., "A famous movie star once slept in this house"); the victim must also be able to prove some type of damage resulted from the lie.
2. Negligent Misrepresentation
A claim for negligent misrepresentation is generally the same as a claim for intentional misrepresentation, except the victim must only prove the defendant did not have "a reasonable basis" to believe its statement of fact was true (as opposed to proving the defendant knew its statement was false). If the defendant’s false statement was both honestly made and based upon reasonable grounds, however, there is no claim. Punitive damages are not available for negligent misrepresentations.
A claim for fraud may also arise if the defendant concealed or failed to disclose a material fact during a transaction, causing damage to the victim. The elements of a claim for fraudulent concealment are:
a. The defendant failed to disclose or concealed a material fact with an intent to defraud the victim.
b. The defendant had a duty to disclose. There is not always a duty to disclose facts during a transaction. If there is a duty, it generally arises in one of four different circumstances: (i) The defendant is in a "fiduciary relationship" (such as being a partner) with the victim; or (ii) The defendant took steps to hide important information from the victim (as opposed to simply failing to tell the victim); or (iii) The defendant disclosed some information to the victim, but the disclosed information is misleading unless more information is given; or (iv) The defendant is aware of key information and knows the victim is unlikely to discover that information. In addition, California laws may create a duty to disclose in certain transactions. For example, sellers of residential property in California generally are required to make written disclosures about the condition of the house.
c. The victim must have been unaware of the fact and would not have acted as he or she did if he or she knew of the fact.
d. The victim sustained damages as a result of the concealment.
4. False Promise
A claim of fraud may arise if a defendant entered into a contract and made promises that it never intended to perform. The elements of a false promise claim are:
a. The defendant made a promise.
b. The promise was important to the transaction.
c. At the time he or she made the promise, the defendant did not intend to perform it.
d. The defendant intended the victim to rely upon the promise.
e. The victim reasonably relied upon the promise.
f. The defendant did not perform the promise.
g. The victim was harmed as a result of defendant not carrying out his or her promise.
h. The victim’s reliance on the defendant’s promise was a substantial factor in causing the victim’s harm.
It is important to understand that a broken promise, alone, is not a sufficient basis for a fraud claim. More than a mere broken promise is required. The victim must also prove that the defendant did not intend to perform the promise at the time the promise was made. In practice, it is usually difficult to tell the difference between a broken promise and a promise made without an intention to perform. Courts generally look for circumstantial evidence to support a false promise claim (as opposed to a broken promise claim), such as the defendant broke its promise immediately after making it.
Characterization of a claim as fraud has many advantages to a victim; primarily, the victim may be able to recover punitive damages in addition to actual damages. Also, the measure of damages is generally more liberal under fraud and other "tort" theories, allowing victims a more complete recovery. But even if a wrongful action does not fall under the definition of "fraud," it still may lead to a valid legal claim. For instance, a broken promise - while not necessarily fraudulently - may still constitute a valid breach of contract claim. While punitive damages and emotional distress damages are generally not available for breach of contract in California, the victim still should be able to recover his or her monetary damages.
1-2-4. Tortious Interference with Contract
Tortious interference with contractual relations is known by different other names. Tortious interference with contractual relations is also termed as unlawful interference with contractual relations, interference with a contractual relationship, interference with contract, inducement of breach of contract, or procurement of breach of contract. Tortious interference refers to a third party’s intentional interference or inducement of a contracting party to break a contract. Such inducement thereby causes damage to the relationship between the contracting parties. In tortious interference a tortfeasor convinces a party to breach the contract against one of the contracting parties, or the tortfeasor disrupts the ability of one of the contracting parties. As a result the promised performance is affected and ultimately results in breach of contract.
1-2-5. Construction Litigation
Williams & Williams Law Firm represents general contractors, Engineering Procurement Construction (EPC) contractors, owners, architects, engineers, subcontractors, supplier, sureties and insurers. The Construction Litigation Practice Group’s practice covers all aspects of the construction business, including contract drafting and negotiation, procurement advice, bid disputes and protests, non-insured commercial contract disputes, claims and request for equitable adjustment, insurance coverage, construction defects and losses for which insurance coverage is applicable, including bodily injury and property damage cases.
Contact a business law attorney at the Williams & Williams Law Firm
Call us at 1-888-422-5232 or contact us online to schedule a free consultation with an attorney who can help you win the compensation you deserve. English and Spanish speaking representation is available.