SACRAMENTO BUSINESS LITIGATION LAW FIRM
Business Litigation FAQs
Business litigation is a complex area of law that requires extensive experience and attention to detail. Generally, business disputes have high financial stakes with serious long-term consequences.
At Perkins Asbill, a Professional Law Corporation, business litigation is a core area of our practice.
Our law office provides knowledgeable and experienced legal counsel for LLCs, LLPs, Nonprofits, start-ups, and other business entities from diverse industries.
Based in Sacramento, California, our business litigation attorneys handle civil matters and provide legal advice for business clients throughout the Bay Area and beyond.
Efficient · Effective
We believe that effective legal counsel must be rooted in reason and logic. To that end, our business lawyers apply a realistic outlook to help business owners make informed decisions about how to proceed efficiently when dealing with legal issues.
We care about clients’ business objectives. Therefore, we offer a cost-benefit analysis based on corporate law and how it applies to concrete situations faced by CA businesses.
At Perkins Asbill, we provide hands-on legal counsel rooted in 30-plus years of combined experience in our practice areas and a thorough understanding of business objectives.
Business-Savvy Legal Guidance Rooted In Clarity And Communication
Our commercial litigation practice encompasses a wide range of matters so that we can meet the legal needs of our diverse clientele. Our law group can assist you with:
- Bad faith insurance claims: We represent policyholders whose insurance claims have been wrongfully denied or underpaid. Insurance premiums can represent a serious expense for any large or small business, and we will work to ensure your policy is honored.
- Business disputes: Through proactive legal guidance, we help businesses make wise decisions about how to navigate disputes, including those involving real estate, intellectual property, and business transactions. We work to end these disputes quickly and appropriately through strategic settlement negotiation, alternative dispute resolution, or litigation.
- Contract disputes: In addition to negotiating, drafting, and reviewing contracts, we also represent clients facing contract-related disputes, including those involving business formation, limited liability companies, and trade secrets.
- Mediation and arbitration:The firm’s founding attorney serves as a third-party neutral and arbitrator for a broad range of business and employment-related matters.
In every client matter, we value clear, consistent communication. Our years of experience have attuned us to our client’s needs and desired outcomes.
What are the most common causes of business disputes?
Operating a business with a partner is uniquely high-pressured. In some cases, the opposing traits that offered a great business relationship at the beginning can lead to frequent conflict.
The most common causes of business disputes are as follows:
- Shareholder disputes: Shareholder disputes can lead to severe consequences. In some cases, they can potentially cause a company to go bankrupt or dissolve. Most shareholder disputes occur over the following:
- Financial matters, including debts or reinvestment of profits
- Conflicting interests or changing views
- Misuse of company assets
- Long-term vision for company
- Breach of fiduciary responsibilities
- Hiring and termination decisions
- Breach of contract: A breach of contract occurs when a partner, supplier, vendor, or otherwise violates the terms of the contract or fails to fulfill their responsibilities. Examples can include:
- Missed deadlines
- Failure to pay invoices
- Failure to fulfill obligations
- Gross negligence: Businesses often rely on the expert or experienced advise of professionals when making business decisions. However, when a professional fails to meet the expectations promised, they may have been negligent.
Frequently, gross negligence is committed by surveyors, consultants, engineers, and accountants.
- Stolen intellectual property or trade secrets: Intellectual property is of the most important aspects to any business. Stolen intellectual property can destroy a company’s competitive advantage.
Stolen trade secrets can also lead to disastrous consequences. A trade secret can be:
- Strategies for advertising
- Sales method
- Employment law issues: One of the most detrimental consequences to a business is a lawsuit involving the violation of employee rights, including:
- Sexual or physical harassment
- Wrongful termination
What do I do if my business partner breached our contract?
When one or more of your business partners breaches your contract, it is natural to feel violated. Depending on the reasons for the breach, it can lead to serious litigation matters.
There are four classifications of breached contacts, including:
- A minor breach of contract
- A material breach of contract
- Anticipatory breach of contract
- Actual breach of contract
A breach of contract occurs when one or more business partners engage in the following:
- A failure to fulfill all aspects of the contract
- A failure to provide services
- Missing deadlines
- Violating a non-compete
- Misusing company assets
In many partnership agreements, handling disputes is addressed with transparent procedures. If one partner fails to live up to their obligations, both parties can review the partnership agreement and begin the resolution process immediately.
However, in situations where the partnership agreement does not address how to handle disputes, there are a few legal remedies, including:
- Negotiating a settlement for damages
- Obtain liquidated damages
- Oust the partner from the company
- A lawsuit against the partner or partners for the breach
- Negotiate a settlement
Once the breach is resolved, it is essential to know how to minimize future risk. Creating a new contract is a proactive approach. Keep the following in mind while drafting the new contract:
- Use clear and concise language
- Be realistic about deadlines and other duties expressly stated in the new contract
- Ensure the contract does not break any laws by using the appropriate legal services
- Include future resolutions for breach of contract and specific procedures to follow
What is the best way to protect my business ideas and intellectual property?
Protecting your business ideas and intellectual property is essential for a successful business. Intellectual property is protected under California law. However, a two-prong approach is best to protect confidential business information.
By securing legal protections for any confidential and intellectual property and engaging in good business practices, you can feel secure that your company’s sensitive information is safe.
Legal strategies to protect your intellectual property and business ideas include the following:
- Non-disclosure agreements: A non-disclosure agreement is a document that restricts the use of your company’s protected information. A non-disclosure agreement is enforceable against intentional or accidental breaches.
If you choose to share your confidential information with a third party, it is crucial that you have all participants sign before disclosing any sensitive information.
- Employment agreements: An employment agreement is a contract signed by a new hire who will be working with your intellectual property. It is critical that the employment agreement clearly states what intellectual property belongs to the company and what is expected of the employee concerning the sensitive information.
- Invention disclosure records: Invention disclosure records are confidential documents written by the inventor of the intellectual or confidential property. The invention disclosure records describe in detail how the intellectual property was built and how it works.
Invention disclosure records are vital for tech companies. Internal documentation is the most effective way of protecting your intellectual property when applying for patents or trade secret protection.
Good business practices to follow to protect your intellectual property and other confidential information include the following:
- Using data encryption
- Choosing the appropriate cloud-based storage and closely monitoring the system
- Regulate the access to sensitive information
- Audit regularly
In addition, the most effective way of protecting your intellectual property is limiting who can access the confidential information.
Do I have any recourse if a client has stopped paying invoices for services rendered?
Yes, you have options available if a client has stopped paying invoices. Before exploring the remedies available, there are specific questions to consider for the health of your company:
- Does the client owe your company enough money to justify pursuing a claim?
- How strong is your evidence supporting the amount owed? Do you have evidence that the client is actively avoiding settling their invoices?
- Does the client have the ability to pay the invoices? If the client cannot settle their invoices today, might they in the near future?
- Does the client have any reason to refuse to settle their debt?
After considering the above issues, if you believe that litigating the matter is worth the cost, you have the right to pursue a claim. Legal action for nonpayment can be accomplished in the following four steps:
- Investigate and evaluate the client’s financial health to determine the best course of action for your company
- Decide the damages you will be seeking, including if you are suing strictly for repayment or if you are seeking additional compensatory damages
- Draft a formal demand letter and include the following:
- Address how the client is in default by citing unpaid invoices
- Detail how much is outstanding and owed
- Request immediate repayment or demand that the outstanding invoices are settled before a specific date
- Ensure the language of the demand letter reflects that nonpayment will result in formal legal action
- Assuming the client fails to pay by the requested date, the next step is filing a lawsuit
Once legal action has been pursued, there are three types of judgments available for your case, including:
- Default judgment
- Summary judgment
- judgment rendered after a formal trial
If my partner wants to dissolve our partnership and we cannot agree on terms, how can I resolve the issue without losing my clients or intellectual property?
Dissolving a partnership can be a highly contested experience. The dissolution of the business can be made infinitely more complicated when both partners participate in the creation of the intellectual property and cannot agree on the terms.
Which partner came up with the idea and which contributed more are subjective considerations that may only fuel animosity between you and your partner.
A more constructive approach is to stay objective and think about the role of each partner throughout the development of the company. Put in writing the specific duties of each partner.
Intellectual property is considered a business asset. It can be owned by an individual, two or more people, or the business itself. When business disputes arise over who has a greater right to the intellectual property, there are a few considerations to address.
When partners cannot agree on terms to dissolve their partnership and business, the following steps may help:
- Depending on the size of your business, dissolving the partnership with a formal vote is an option
- Arrange to pay off all business debts
- Liquidate all partnership property
- Consider mediation or arbitration to resolve ongoing disputes
Intellectual property is treated the same as real estate. Generally, if the business goes bankrupt, the intellectual property will be liquidated. If the company is being sold to another company, the intellectual property will go with the sale.
We take each client relationship seriously. Clients work one-on-one with our lawyers through all stages of the process. We offer the accessibility and transparency of a small yet dedicated practice.
We invite you to contact us for more information. You can reach our office in downtown Sacramento at 916-446-2000. Call today to schedule a consultation with one of our business law attorneys or learn more about our legal services.