Running a business is more than selling products and services to the general public or to businesses. There are many pitfalls that can cause a business to go under, such as lawsuits against companies. These lawsuits can range from small amounts to millions of dollars in compensation to the aggrieved party.
In addition to the financial hardship a business must endure from the lawsuit, they must also deal with their reputation and brand becoming destroyed. People as well as other companies will avoid doing business with you. Eventually, due to a loss in profits and customers, you could end up closing your business doors for good.
On the other side, you may find yourself in a situation where you are the aggrieved party that may need to file a business lawsuit. You may discover that a previous employee had stolen confidential information about your products and services to start their own company or to sell the information to competitors. In another situation, you may have partnered to obtain contractual services. However, the other business failed to provide these services.
Understanding the common types of lawsuits that impact businesses allows you to implement internal policies to avoid these issues. It can also help you take the appropriate legal action to protect your business. Here are some common lawsuits that ClearWay Law can help you with in the Toronto area.
Intellectual Property Rights
This type of lawsuit is common for businesses. Another company may take your product ideas and pass them off to consumers using their own brand and name. You could also be subject to a business lawsuit because your logo or brand appears similar enough to another company’s images. You may not have realized that you were using a copyrighted image as you never obtained permission to take it for commercial use.
Breaches of Contract
Other highly common lawsuits filed between businesses are breaches of contract and other contractual disputes. A breach of contract may involve you and another business agreeing to provide services or products to each other. While you have fulfilled your end of the contract, the other company may have backed out of the agreement. You may decide to sue them to obtain compensation or force the other company to fulfill its end of the contract.
Violating non-disclosure agreements would be other types of lawsuits that fall under breaches of contract. When partnering with another company, there may be sensitive information shared that one party does not want disclosed to other business partners or to the public. However, this information may be leaked intentionally or unintentionally that inflicts damages on the company as they may sue over this violation of the non-disclosure agreement.
Torts fall under a wide variety of third-party lawsuits against companies. Some may be industry specific, such as a tenant filing a lawsuit against a landlord over being wrongfully evicted from a rental property. Other claims could apply to several industries; such as being sued because of defective products.
A tort basically means that a person is suing because their civil rights were violated. These lawsuits typically fall into two categories: intentional torts and unintentional torts. A common intentional tort would be a business fraud lawsuit, while an intentional tort would be a negligence lawsuit.
When you are being sued for negligence, it means that you should have either been aware of an issue or the possibility of an issue occurring with a product or service and failed to take action to prevent it from happening. Slip and fall accidents that occur on the business premise would be considered a negligent unintentional tort. If a person falls on a wet floor without the proper signs warning them that the floor is wet, or there is a loose tile on the step that causes a person to slip and fall, then a person would file a tort lawsuit.
Intentional tort lawsuits mean that your business knowingly engaged in an action that caused some type of harm to others for personal gain or profit. An intentional tort would be to get someone arrested on premises out of malicious intent for no other reason because you didn’t want to provide them with products or services. Another type of lawsuit would be when engaging in fraud by deliberately advertising that your product could provide certain benefits when it cannot.
Employment lawsuits filed on behalf of workers against your company can vary greatly depending on the business circumstances. An applicant or existing employee may file a discrimination claim because they feel that the HR department or managers violated their civil rights by discriminated against them based on sex, race, age, religion, disability or nation of origin. These types of lawsuits may also be filed by customers who feel that they have been treated unfairly by your employees.
There are also wage law violations where an employee claims that they were not properly compensated for the work that was provided. The employee could say that they were paid less than minimum wage. An employee could also file a lawsuit for not being compensated when working overtime.
Other types of common business lawsuits are harassment and wrongful termination. Harassment covers any unwelcome conduct that is based on sex, race, religion, age, disability or national origin. Wrongful termination lawsuits apply when the employee claims they were wrongly fired from their job due to retaliation for filing a harassment complaint or because the company violated their civil rights.
Getting Help for Business Lawsuits
There are many nuances to business lawsuits, whether you have someone placing a claim against you or your company is filing a claim against another organization or individual. Knowing your legal rights can help protect your company and profits. Contact the legal professionals at ClearWay Law.
We have decades of experience helping businesses understand the laws that can impact their corporations. We can help businesses protect themselves from lawsuits through corporate planning, and can provide legal representation on your behalf if you want to file a claim against another company or an individual. Learn more about business lawsuits by calling us today.