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Commercial Litigation FAQ

Commercial litigation can get pretty complex and require a lot of resources. The following are answers to some of the most frequently asked questions about commercial litigation in New Jersey.

What is commercial litigation?

Commercial litigation is a broad term that encompasses many types of legal issues related to business disputes. Commercial litigation can involve breaches of contract, partnership disputes, class actions, and shareholder disputes. A commercial litigation case may involve legal disputes with a small local business or a large corporation. Some commercial litigation cases arise when there are disagreements between business partners within a business.

What do I need to prove in a breach of contract lawsuit?

Breach of contract is a common issue that comes up in commercial litigation. You will need to establish the following in a breach of contract case:

  1. There was a valid, enforceable agreement;
  2. The defendant breached the agreement;
  3. You performed your part of the agreement; and
  4. If you are seeking damages, you will need to offer proof regarding how you or your company were damaged as a result of the breach.

In a breach of contract lawsuit, a court may order specific performance of the contract, restitution, damages, or cancellation/repudiation of the contract. If a judge orders specific performance, the losing party may be ordered to do what was agreed upon according to the contract between the parties. A judge may also order damages for both economic and non-economic losses. Cancellation of a contract is intended to put a party back in the same position that he or she was in before execution of the contract. In some breach of contract lawsuits, it may be possible to recover punitive damages and attorney's fees.

What should I do if my business has been served with a lawsuit?

It is important to contact a lawyer as soon as possible since there are strict requirements for filing an answer within the period of time prescribed by law, and failure to do so can result in a default judgment being entered against you or your company.

You should keep any business records that could be the subject of the litigation. Destruction of documents that are related to the case can result in a jury being instructed to make adverse inferences regarding your liability and can, in some cases, result in penalties from the court if you have been ordered to furnish certain documents to the other party. You may also be required to hold any property or funds that are disputed and the subject of the lawsuit until the pending litigation can be resolved. If you are unsure about what to do with any disputed property and how to handle business records after a lawsuit has been filed, it is important to discuss this with your attorney.

What is a counterclaim?

A counterclaim is an opposing claim filed against someone that has already brought a case against you. A counterclaim is usually filed at the same time that the party that was sued in the original lawsuit files their answer. It is very common for counterclaims to be filed in commercial litigation matters. In a breach of contract case, for example, it is not unusual for a party accused of breaching a contract to counter-sue and accuse the other side of not performing its end of the bargain. The party alleging a counterclaim can request damages and other remedies as though it had filed the claim first.

What is an affirmative defense, and how does it differ from a counterclaim?

An affirmative defense is one that is asserted by the party defending a lawsuit or counterclaim. If the defendant asserts an affirmative defense, it has the burden to prove it. Examples of affirmative defenses include mistake, undue influence, misrepresentation, and fraud. Unlike a counterclaim, an affirmative defense is a legal excuse that, if proven, could excuse or mitigate any potential liability.

Will I be held personally liable if my company is sued? 

Most corporations are set up so that their owners and operators will not be held personally liable if the company is sued. A limited liability corporation, for example, is designed to shield its owners from personal liability.

Some business owners operate their business without incorporating it. For example, a sole proprietor who has not incorporated a business and who files taxes under his or her own name using his or her own social security number may be held personally liable if the business is sued. A business law attorney can help prevent this from happening by assisting you with the incorporation of your business and advising you of any issues that could pose a legal liability.

When can my company be held liable for the actions of my employees?

In some cases, your company can be held responsible for the negligence of an employee if the employee was acting within the scope of employment. Companies will generally not be held liable for the intentional actions of its employees who cause injuries to another person, e.g., intentional assault and battery. Whether or not a company may be held liable depends on the specific facts of the case, and every case is different. Additionally, some types of claims may be covered by insurance.

How long will my case take to resolve?

It is difficult to tell how long any individual case will take to resolve. The answer depends on the nature of the case and the complexity of the issues involved. Cases that involve many plaintiffs or defendants may take longer to resolve than lawsuits that only involve one defendant and one plaintiff.

Many cases are settled prior to trial through mediation or arbitration. Mediation is an out-of-court session where attorneys and a third-party mediator discuss what resolution each side seeks an attempt to reach a settlement agreement prior to trial.

Who will decide my case?

In most cases, a jury will be asked to decide the issues in a case unless both sides agree to waive the jury trial and request a bench trial. If a bench trial is requested, both sides will present their cases to a judge.

In some breach of contract cases, the parties must submit to binding arbitration. If a contract between the parties requires the parties to submit to arbitration, where and how the arbitration should proceed will usually be listed in the provisions of the contract.

Is it better to settle a case or take the case to jury trial?

Whether or not it is best to settle a case depends on the facts of the case and the nature of any settlement offer. In some lawsuits, the parties cannot come to any agreement and there is no choice but to present evidence to a jury and let a jury decide how the case should be resolved. In many cases, settling the case can save costs due to litigation. Another advantage of settling a case is that it provides certainty.

Some businesses choose to settle cases that can affect its business reputation by asking that the party agreeing to the settlement sign a non-disclosure agreement. A non-disclosure agreement prohibits the party from discussing the terms of the settlement agreement, including the amount of compensation received.

Why do I need an attorney to handle my case?

Commercial litigation can involve complex procedural and legal issues. It is important to hire an experienced attorney because of the strict requirements for meeting all deadlines when filing responsive pleadings, pre-trial motions, and responses to discovery requests. In some cases, like a breach of contract dispute, close inspection of the paperwork involved in the dispute can make all the difference in the outcome of the case.

How should I prepare for my first meeting with an attorney to discuss a potential commercial litigation case?

One of the first things you should do when preparing to discuss your case with an attorney for the first time is to gather any documents that you believe may be important to the case. In a breach of contract case, for example, bringing an original copy of the contract to your first meeting is a good idea so that your attorney can make copies. You may also want to begin gathering any financial records, emails, tax records, payroll records and other documents that may be important in your case. Your attorney can advise you as the case proceeds about any additional documents or information that you need to provide.

You should consider what questions you will want to ask an attorney about your specific legal issue. For example, you may wish to ask if it will be possible to recover attorney fees in your case. In a breach of contract case, you may be able to recover attorney's fees if the contract specifies that this is allowed. In other types of cases, state law may allow recovery of attorney's fees. You may also want to discuss at the first meeting what fees you will need to pay upfront for the representation and how you will be billed if total costs exceed the retainer fee.

Commercial Litigation Attorneys in New Jersey

If you have questions about commercial litigation, contact the attorneys at Kim & Feliz, LLC. When it comes to business law, it is often possible to prevent legal issues from coming up later by consulting an attorney now. You can reach us online or call us at (201) 585-2250 to schedule a consultation.

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