The Two Most Common Reasons for Business and Commercial Litigation – Contract Disputes and Breach of Contract

Submitted by Landon Reeves on Fri, Sep 01, 2023 - 15:39

Business and commercial litigation generally pertains to legal disputes involving one or more companies such as limited liability companies, partnerships, corporations, or other legal entities. Commercial litigation can arise in many different forms and for many different reasons. This article is intended to identify and explain the most common situations that give rise to business and commercial litigation matters. In my experience, the two most common reasons necessitating the commencement of business and commercial litigation are contract disputes and breach of contract claims. 

Contract Disputes: Contract disputes are very common and are often times the result of poorly drafted contracts or the lack of a written contract altogether. Contract disputes typically occur when two parties have different understandings or interpretations of a contract (whether oral or written) and different understandings of the rights and obligations of each party under the contract. I should note here that an oral contract is never a good idea. You should always have a good, thoroughly written contract for any transaction of value. 

Contract disputes may also include the modification or amendment of a contract and its terms whereby the parties intend to modify the contract but cannot agree upon the modified terms. Contract disputes may entail a different understanding and interpretation of the obligations of each party to the contract, the contract term, the payment and finance terms, the assignment of a contract to another party, or any other aspect or provision of a contract. Simply, contract disputes can be generally described as a breakdown in the understanding and interpretation of the terms of a contract, which is slightly different than a breach of contract discussed in the following paragraph. 

Breach of Contract: Although similar to contract disputes, breach of contract claims generally arise when a party to the contract has intentionally or unintentionally breached the contract as opposed to different interpretations of a contract. Breach of contract cases can become very complex and involve the interpretation and construction of the contract, the remedies available for a breach under the terms of the contract, and the remedies available under Arkansas law for a breach of contract. Breach of contract cases are very common among business owners and companies which may include contracts between contractors, suppliers, distributors, vendors, customers, and any other third-party.

In analyzing a breach of contract case, the first step is to determine if a valid contract exists and if it is applicable in the given situation. In determining if a contract is applicable to the situation at hand, the attorney should then conduct an analysis to determine the implications of any statute of limitation, statute of fraud, and other legal hurdles under Arkansas law. The second step is to conduct a thorough reading and interpretation of the contract to understand all of the terms and provisions of the contract, the obligations of each party, and the rights of each party to the contract. From there, it is prudent to conduct a thorough analysis of all of the facts, information, and documentation of the case at hand to determine how the facts will be applied to Arkansas law. 

A thorough understanding of the terms of the contract, the facts of the case, and the applicable law in play are the initial steps in determining if a party has breached a contract and if there is a viable claim of action for breach of contract. 

In conducting these complicated analyses and filing or defending a breach of contact lawsuit, it is crucial to have an experienced attorney that will protect your interests and work to achieve the best possible result for you and your business. We are ready to talk with you about your case and to protect what matters most to you.