Business disputes may come on suddenly, or they may be disagreements that build over time until one or both parties decide to take the matter to Business Disputes Lawyer.
It’s always unfortunate when people who work together have to settle things in court but, sometimes, there is no other way to resolve the situation but to seek help from Business Disputes Lawyer. If this is the case, your attorney will represent you in court and work to help you get the best possible outcome.
Early Intervention Options
However, there are also many cases where we can help a client and the other party/parties come to a resolution outside of court. If possible, this has many advantages. It saves all parties the time and expense of a long court case. It may also spare one or more businesses involved from the bad publicity or public perception of airing their grievances in open court.
When you go to see your Florida business disputes attorney for the first time, they will ask you questions about your issue and try to determine the best way forward. Sometimes they are able to work out a deal with the other party, especially if the parties are willing to compromise. For example, you might agree to accept some of the money you feel the other party owes you instead of the full amount, especially if the court costs would likely eat up the difference anyway.
Because things can get heated between parties in any kind of legal disagreement, your lawyer may encourage you to avoid any contact with the other people involved. Although it can be tempting to call someone up and yell at them, especially if you’ve just received upsetting legal papers from them, it’s best to keep your cool and call your attorney instead. They will be able to advise you on the best way to handle the situation. Your lawyer can also calmly handle contact with the other party or their attorneys, preventing both of you from getting into an argument that may escalate the situation.
Types of Business Disputes
Business disputes can emerge from a broad array of scenarios. They can be internal or external. For example, you might get into an internal dispute with business partners, an employer, an employee or former employee, investors, etc. There are many cases where the co-owners or shareholders of a business end up at odds and need to seek a legal remedy.
Internal Disputes
Often, people are excited to be starting a business with other partners or shareholders. Sometimes, these partners may be friends or sometimes relatives, or they may be people that you’ve worked with previously. You may feel that you know how they work and what skills and experience they bring to the table. It’s likely they think the same about you. Unfortunately, sometimes partners go into business together expecting certain things to happen and, for many reasons, the situation works out very differently.
In many cases, one partner is very unhappy with the direction the company is going. Sometimes they want to do business with another party, but their partners don’t think this will be a good business relationship. They may have expected one partner to carry out certain responsibilities or do certain work but, for some reason, that just doesn’t happen.
This is one very common situation we encounter. Two partners will go into business together. Let’s call them Roger and Hank. They agree that Hank is going to work on the design side of the business, completing customer orders and maintaining the website, while Roger handles accounts and sales, bringing in business. So, Roger goes to work every day networking, bringing in clients, and setting up online marketing to capture even more leads. Soon they have lots of clients but Hank has a hard time getting their jobs done on time. He frequently takes “personal days,” often twice a week or more. Roger ends up working weekends trying to finish tasks Hank has left undone. He tries to talk with Hank but Hanks tells him to quit complaining. He says being in business is hard work, he’s doing as much as he can, and Roger should have known he’d be expected to pitch in when they got busy. As this situation goes on and doesn’t get better, Roger gets frustrated and, eventually, consults an attorney. At this point, he’s not even sure how he wants to solve the dispute, he just wants to know his options. How hard would it be to get out of business with Hank? Will he lose the money he invested? Will he have to fight Hank for every customer their business served? What if Hank goes around badmouthing him to everyone in their network? This is usually the point where we ask to see Roger’s partnership agreement, as well as any documents pertaining to the formation of the company. These should provide a roadmap for how internal disputes between owners, partners, or shareholders will be resolved. In many cases, Roger’s problem can be handled easily once we go over the contract and explain his options.
A partnership agreement is a document that lays out each partner’s roles and responsibilities. This addresses things like each partner’s initial and/or continued financial contribution, how much of the work load each person is expected to take on, what jobs they will do in the business, who will make what decisions, etc. The clause about how disagreements will be worked out will be very important. Although businesses formed as entities are not legally required to have a shareholder/partnership/operating agreement, having these documents in place may make settling disputes much more efficient, in terms of both time and money. Thus, it is generally advisable that a Florida entity have these documents drafted, and consulting with a Florida business lawyer whether at the time of formation, when thinking about having partners, or at any stage of the entity, is strongly recommended.
Sometimes, however, Roger may find out his contract was not as complete as it should have been. Typically, these are situations where the future business partners were trying to save money, so they made up their own partnership agreement, often copying some forms they found on the internet. This can be problematic in dispute situations as random business forms don’t always address every issue that should be covered in a partnership agreement or take into account local laws regarding these agreements. If the contract doesn’t lay out rules for solving disputes or partner buy-outs, the dispute may take much longer to settle in court. For this reason, we recommend hiring an experienced Florida business attorney to help you properly set up any new business venture.
Even with a properly drafted contract, sometimes partners or shareholders will have a disagreement about the interpretation of certain words or clauses, or whether or not a partner is holding up their end of the bargain. In these situations, one partner may sue the other, or may take steps to try to buy them out, or to sell their stake. There may be other options for your particular situation, which your attorney will explain to you.
What should you do if you are starting to have difficulties with a partner? It’s a good idea to see an Florida transactional attorney sooner rather than later, even if you don’t take any immediate action. Sometimes, just knowing your options can be very helpful. Your lawyer may also be able to advise you on documenting issues that arise in the future in case you need to go to court later.
Prior to seeing your attorney, you should locate and look over any copies of your operating, partnership or shareholder agreement, and make copies to leave with your attorney.
Contract Breach
This is a major cause of internal disputes and covers a wide swath of issues. Essentially, breach of contract means that someone is not doing something they agreed to in their contract. So, following the prior illustration, if Hank agreed to fulfill 100% of the orders himself and he’s not even doing half, Roger could take him to court for breach of contract.
These claims are also common with employees, former employees, and contractors. These individuals may have signed employment agreements such as non-compete agreements, non-solicitation, or non-disclosure agreements. If your former employee or contractor agreed that they would not work for a competitor in the city of Port St. Lucie for two years after leaving your employ, then they quit and go to work for a competing business down the street, you may want to see your Florida dispute attorney about a breach of contract lawsuit. In most cases, the likelihood of a good outcome for you depends on your ability to prove that the contract was breached (or that it wasn’t if you are the one being sued). Your Florida business attorney will probably ask you about evidence, documentation, and witnesses who can support your claim.
External Disputes
These can happen in a variety of ways. Businesses may get into disputes with customers, competitors, distributors, or suppliers, or even random individuals who feel the company has wronged them in some way. Again, breach of contract is a major cause of these disputes—either the other party has breached their contract, or they believe the plaintiff, or company being sued, has done so.
As with internal disputes, your attorney will want to go over the contract in question—for example, a sales contract, a distributorship agreement, a service contract, etc. They will explain the options, and help you try to work things out if possible. If this doesn’t settle the issue, they will represent you in court.
Working Things Out
Because court cases can take time, cost money, and, sometimes, negative publicity, many clients wish to work things out with the other party out of court. There are many ways this can happen and your attorney will advise you on the options. Sometimes, it may be legally possible to get out of business with a partner, but it may not be a good financial move. In our example, Roger may not want to be in business with Hank anymore but he may lose money if he sells out to Hank, or he may not be able to afford to buy him out.
In this case, we may consider other alternatives. If the company has more business than Hank is willing or able to handle himself, he and Roger might agree to hire an employee to help with the workload, or they might take on an additional partner who will not only help with the work, but also serve as a tie-breaker in future disagreements. Depending on your situation, there may be various options that you and your Business Dispute Lawyer can discuss.
If you need assistance with your contract drafting or negotiations, have a business dispute, or have questions about any potential legal matter, please contact Apfelbaum Law for a consultation. You can also check out our Business Disputes Practice Area for more information. We have offices in Port St. Lucie and Stuart, but provide legal services throughout the Treasure Coast and Florida.
