Type of Lawsuits That Are Common Against Businesses

Type of Lawsuits That Are Common Against Businesses

Type of Lawsuits That Are Common Against Businesses


We put together a list of the type of lawsuits that are common against businesses. 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.

Type of Lawsuits- 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.

Type of Lawsuits- Torts

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.

Type of Lawsuits -Employment 

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.

Top Insurance Companies in Ontario Get Sued

Six top insurance companies are being sued in a class action lawsuit. The claim is for multiple millions of dollars, a potential hit to a company regardless of its size. The claim was regarding how the insurance companies collected and used HST, which is 13%. Some companies use HST as a 13% cash bonus, a silly mistake at the end of the year when they must give the money to the CRA.

Province of Ontario Planning to Sue Tobacco Companies

Ontario is wanting to sue Tobacco companies for the massive health care costs that cigarettes have caused the province. Tobacco companies have for years managed to use “lobbyists” to avoid lawsuits and criminal proceedings against them. As Canada becomes more health conscious, tobacco companies are becoming more vulnerable.

Ontario started a claim against the tobacco companies back in 2009, and a decade later, a court date has almost been set. The tobacco companies can afford to hire large business law firms, which can delay court dates and cause other hold ups in the justice system.

Therefore, if you feel you are about to be sued, or if you have been served, it’s important to contact a business law firm right away.

Canada Dry Under Fire for False Advertising

Canada Dry dropped the claim that it is made from actual Ginger. This happened after testing found that there was little or no ginger in the can. If any ginger was in the can, it was so nominal that no health benefits would be possible.

Instead of going to court to defend themselves, they decided to just make payments to everyone affected by the false claim. This likely means that the company either:

  • Felt they would lose in court
  • Didn’t want to damage the brand

This was most likely an excellent decision by Canada Dry.

The settlement is in the USA only, not Canada. Each house affected gets $5.20 if they don’t have a receipt and $40 if the household can show a receipt.

Lawsuit Against Employers Toronto

What Happens When Your Business Is Sued?

Most of the time a business will receive a legal letter before it is sued. We are currently dealing with a claim against a technology company. The companies support team and technology team did not work well together. The support team did not communicate with their legal team that there was legal liability arising. Without going into any detail, the support team was in over their heads.

The first thing the company received was a letter demand letter. It outlined the basis of the claim and that damage relief were being asked for. This does not mean the company has been sued, as the claim had not yet been filed with the court. Depending on how the company responds, the claim will be filed, or a out of court settlement will occur.

Reach our business lawyers by contacting us using the live chat button on the botton right screen. Most of the time, someone will be available right away. If not, give us a call instead! 1-844-466-6529

Read more: Ways To End A Contract

Many Ontario companies do business outside of Canada. It is important to hire a business law firm that understands international law.

Some large companies get in trouble for violating government sanctions and embargos. China’s most successful international company Huawei was recently charged with violating sanctions regarding doing business with Iran. The CFO of Huawei was arrested in Vancouver, Canada and is awaiting deportation to the USA. It is amazing that Huawei’s lawyers did not know that Canada had an extradition treaty with the USA. The lawyers should have told the CFO not to land in any country with an extradition treaty with the USA. Perhaps the company got too big too soon.

Having a business lawyer that understands your business and is up to date with what is going on is extremely important.

Lawsuit against employers Toronto as shown in CBC. Allstate facing lawsuit says insurance giant trying to silence her.

International Business Law Definitions

Sanction- A government action normally regarding free trade for an adversarial purpose related to politics.

Embargo- An action by government that prohibits trade with a country entirely, normally for political reasons instead of economic purpose.

Boycott- An effort to stay away from doing business with a country, normally a goal instead of a rule.

Corruption- Payments or favors made to officials in return for something that you should not have received.

Bribery- The use of payments or favors to obtain some right or benefit to which the briber has no legal right

Type of Lawsuits- Transfer Risk

Several countries around the world limit the amount of country that can leave the country. China for example limits their citizens to $50,000 USD in transfers outside the country per year. Many wealthy Chinese were getting their money out of China, damaging the Chinese economy. Evidence of this can be seen in cities like Vancouver, Canada.

Transfer risk is the danger of having one’s ability to transfer profits in and out of the country due to governmental rules and regulations.

Operating risk is when there is danger of interference by governments or other groups in one’s corporation operating in the foreign country.

Lawsuit against employers Toronto- Have concerns? Reach our business law firm at 1-844-466-6529

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