What is Business Litigation?

Business litigation involves legal disputes between businesses and/or individuals people in matters pertaining to such areas as:

  • Professional Negligence including Accountants, Architects, Lawyers and other professionals
  • Breach of Contract
  • Breach of Warranty
  • Intellectual Property, including Copyright and Trademark Infringement
  • Unfair Competition and Business Practices
  • Partnership and Shareholder Disputes
  • Business Fraud
  • Real Estate Disputes
  • Litigation involving Trusts
  • Business Torts, including Misrepresentation, Conversion, Fraud, and Breach of Fiduciary Duty
  • Defamation
  • Insurance Disputes
  • Commercial Disputes among Businesses, Vendors, and Customers
  • Unfair Competition, including Anti-trust

Why Should I Worry About Business Litigation?

If you own or manage a business, chances are you either already are confronted with business litigation or will be in the near future. Almost all business people confront litigation or the threat of litigation in the course of their business, whether they are Fortune 500, small or medium size companies, closely-held or family owned businesses, internet start-ups or individual entrepreneurs.

If your business has suffered damage as a result of the conduct of another, then taking legal action may be your only remedy. Often times, securing compensation can mean life or death for a fledgling or well-established business as well as the individuals who own or manage it. Failing to promptly address your legal rights may result in the loss of those rights or, even worse, may cripple or destroy your business.

When you are threatened with litigation, it will probably cost you money to solve the problem, even if you are right. Ignoring the problem won’t make it go away, especially if you have been served with court papers or a notice or demand pursuant to a contract. And, failure to respond in a timely manner may cause you to lose your legal rights.

When should I consult an attorney?

As stated in the "What can I do to Reduce my Risk" section, it is always advisable to contact and retain a transactional lawyer, experienced in business deals, who can assist you in the business you are forming, buying, etc. A transactional attorney can protect you from legal clauses designed to limit or eliminate damages, forum choices, your ability to bring a lawsuit in a court of law, etc.

When litigation is imminent, parties often will see if they can work it out before contacting or hiring an attorney. This is an initial decision that every individual and business must make for themselves and it is preferable to have an attorney for any significant transaction or dispute resolution. Meeting your adversary half way may save you money and avert all out legal warfare, but can result in you losing or forfeiting some or all of your legal rights. Any attorney can assist you in evaluating those types of decisions, which regularly occur when parties try to resolve disputes. If you chose to forego an attorney, assume that anything you say and any letter you write will later be presented to a court by your adversary.

If you are able to work it out, it would be in your best interest to hire an attorney to draft a settlement agreement to ensure that the matter is properly resolved. If you are unable to resolve matters on you own, you must then decide if you should contact an attorney to pursue matters further.

If you are ever formally sued or served with papers from a court or arbitration panel, you should seek legal counsel immediately. Ignoring the problem won’t make it go away, especially if you have been served with court papers or a notice or demand pursuant to a contract. And, failure to respond in a timely manner may cause you to lose your legal rights.

What should I look for when consulting an attorney?

Some attorneys offer free initial consultations. The Law Offices of R. Jack Ayres, Jr. offers a free consultation to any individual or business. Don't be afraid to ask the attorney questions and get a cost estimate. Remember that litigation costs fluctuate and are very difficult to estimate. Keep the following questions in mind when selecting an attorney:

  • Is the attorney qualified in the field of law you will be litigating?
  • Is the attorney an experienced trial lawyer?
  • Are you comfortable with the attorney's approach?
  • Does he or she consider solutions without resorting to litigation such as mediation or arbitration?
  • Does the attorney handle trial and appellate work, or will you have to hire additional counsel for an appeal?
  • How is the attorney's fee structured?

What attorney fee arrangements are available to me

Normally, attorney fees are either based on a contingency agreement or on an hourly rate. In a typical contingency agreement, the attorney is only paid if there is recovery, and the fee is based upon a percentage of the final award. The contingency fee can work out well for internet start-ups, individual entrepreneurs or small businesses that are unable to afford to assert their legal rights against large corporations that appear to have an endless amount of funds to pay legal expenses. However, be sure you understand how expenses (such as copying, depositions, court costs, etc.) will be handled. For example, will you be required to pay expenses as you go along or can you pay expenses at the end of your case?

In our contingent fee cases, the attorney's fees are calculated from the client's gross recovery before costs and expenses are deducted. The client is expected to reimburse any and all litigation costs and expenses in addition to attorney's fees. The costs and expenses that a client is ultimately responsible for, such as court costs, are outlined in our attorney-client contract.

Hourly fees are when the client pays the attorney his or her hourly billing rate plus expenses as they are incurred. Unlike a contingency fee arrangement, if the client pays the hourly rate, the entire award belongs to the client once litigation is successfully concluded.

Whatever fee agreement is reached, make sure you understand it completely and make sure all it is reduced to writing.

What are the Statutes of Limitations?

The statutes of limitations are time frames in which you have to file a lawsuit. When the statute of limitations expires on your case, you may lose your rights regardless of the merits of your claim because it was not brought in a timely manner. Statutes of limitation differ not only from state to state, but also in regard to the kinds of lawsuits involved. Complying with the applicable statute(s) of limitation is a fact specific matter. Any such questions should be immediately directed to a lawyer to advise you on such matters. Sometimes, these are serious matters of professional, legal judgment.


While this advice may help inform you of basic issues relating to business litigation, nothing presented here is a substitute for qualified legal advice. Consult with an attorney that is qualified to advise and potentially represent you in your specific case.