business disputes

 

Business Disputes

 

Business disputes or commercial transaction disputes can arise during the course of ordinary business transactions when one party does not live up to its agreed upon bargain. When that happens, it is important to hire a lawyer who understands, not only the nature of the dispute, but the laws governing the underlying agreement.

 

Breach of Contract

 

A breach of contract can occur when one party intentionally breaches a contract or when the contract was poorly worded and vague and the parties have a dispute over their duties and responsibilities.

 

Contracts often include preset limitations on your rights to pursue your rights in case of a breach such as an arbitration clause or a limitation on the time you have to file your case (statute of limitations).

 

In all breach of contract cases, the first question to evaluate is whether the underlying contract was valid. In California, the Courts look at three essential elements to determine if a valid contract was formed:

 

  1. That the contract terms were clear enough that the parties could understand what each was required to do;
  2. That the parties agreed to give each other something of value [a promise to do something or not do something may have value]; and
  3. That the parties agreed to the terms of the contract.

 

In California, oral contracts are just as valid as written contracts.

 

Even if a contract is valid, in determining whether a breach took place, the Courts will look at factors such as whether the party suing performed his or her duties under the contract, whether the language of the contract is unconscionable, and whether the other side suffered damages, among other things. For example, a clause in a contract requiring a person to pay $10,000 for a car wash might be held unconscionable because it’s terms are so one sided that imposes unreasonable terms on one party.

 

Another key factor to consider in contract disputes is that contracts also often provide that the losing party pay the other side’s attorney’s fees. This can provide an incentive for parties to perform their duties under the contract by, not only allowing access to an attorney to an injured party who might not otherwise be able to afford one, but also creates a disincentive to the side who is seeking to avoid his or her duties under the contract by forcing them to pay steep fees to the other side’s attorneys for failure to fulfill the contractual duties.

 

Recovery can often include attorney's fees depending on the terms of the contract.

 

Partnership Disputes

 

Partnership disputes are common when either one partner intentionally tries to defraud the other members of the partnership, or when the partnership agreement was vague and open to multiple interpretations and the partners cannot agree on what the original intent of the document. In that case, certain laws govern what the correct interpretation should be.

 

In California, as in most states, most business entities are created by filing  a  document with the Secretary of State, and the laws that govern the duties that partners owe to each other is state-specific and found in the state’s statutes.

 

Partners owe a fiduciary duty to each other, meaning they cannot put their own interests above the interests of the partnership. Partners are required to act with the utmost good faith for the benefit of each other. Partners cannot take an advantage from their acts relating to the interest of the partner(s) without the latter’s knowledge or consent.

 

Partners can also be held jointly liable to third parties if acting within his or her duties and role in the partnership.

 

Joint Venture Disputes

 

A joint venture is a business arrangement similar to a partnership where the parties combine their property, skill or knowledge to carry out a business for profit. They can last for one deal or transaction or an indefinite series of deals and transactions.

 

The danger with a joint venture is that the law requires little formality in  the creation of a joint venture and the agreement is not invalid if the agreement is ambiguous, so most joint venture disputes arise from  in incomplete understanding between the two parties from the outset. Members of a joint venture can  also create liability for each other if acting in the course of their joint venture.

 

 

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