5 Things Businesses Must Know About Commercial Litigation Law

What is Commercial Litigation?

Commercial litigation is a broad and complex area of law, and lawyers who practice in this area have spent many years mastering it. So, let’s simplify it.

To understand commercial litigation, we must first go over civil litigation. Civil litigation is when two or more parties are involved in a lawsuit that is non-criminal in nature. This is not like Law & Order where one individual is trying to send the other to jail. Normally, one party is suing the other for monetary compensation or to defend a legal right.

Example: Jessica is driving home from work when another car collides with hers. The crash results in Jessica breaking her arm, affecting her ability to run an art studio. Jessica sues Chris, the driver of the other car. If Jessica wins her civil court case, she will receive monetary damages.

Commercial litigation, or lawsuits, work in much the same way, except one or more of the involved parties are businesses. The process of taking cases to court tends to be more expensive than non-commercial civil lawsuits. Like civil lawsuits, the goal of the suing party is to receive monetary damages. However, depending on the case, there may also be criminal charges filed. Commercial lawsuits typically proceed in the following pattern:

The suing party hires an attorney
The facts of the case are investigated
Attorneys on both sides research the appropriate laws
A settlement is negotiated
The attorney for the plaintiff files the lawsuit
The case is taken to court before a judge and jury

What Are Some Examples of Commercial Litigation?

Anti-trust lawsuits

These occur in response to allegations that a business is not complying with laws regulating competition.
Example: AT&T attempts to acquire Verizon, resulting in a monopoly and reduced competition.

Class action lawsuits

These occur when a group of individuals sue a person or company that harmed them.
Example: Gloria and Gerald buy a crib for their baby daughter, only to have the crib collapse, injuring the infant. While watching CNBC, Gloria listens to a report detailing other instances of injury resulting from this specific crib. The parents join with others who bought the defective crib to sue BabyBella, the company selling the product.

Regulation lawsuits

These occur when a company violates its industry’s regulations
Example: The oil company Shell decides to dump thousands of tons of waste into a local river despite industry regulations against illegal dumping. After dead fish are found floating downstream, Shell is sued for violating environmental regulations.

Breach of contract lawsuits

These occur when a person or company violates a contract made with another
Example: Restoration Hardware makes a deal with ShelfMaster, a company that produces quality wood furniture. Every month, Restoration Hardware is supposed to receive a shipment of shelves. However, for three months, the company does not receive its promised shipments of shelves. ShelfMaster has thereby violated the agreed contract and is sued.

Intellectual Property Lawsuits

These occur when one party sues another for infringing on its patent or trademark.
Example: The company IncrediCat, which has developed a revolutionary automatic cat feeder, sues Petsmart for copying and selling its invention without permission.

How is Commercial Litigation Changing?

The practice of commercial litigation is often subject to change. Changes in political administrations, laws and regulations, court appointments, and the economy can affect the commercial landscape.

Let’s consider an example illustrating how the field of commercial litigation must routinely adapt. We live in an age of constantly evolving technology, and the law has been forced to change in order to regulate new frontiers such as the Internet. This means that lawyers in the commercial litigation practice are often approached about entirely new disputes. Often these disputes involve tech companies. The subsequent lawsuits often concern trade secrets and intellectual property.

In short, political and cultural trends directly affect the way commercial law is practiced, making it a highly dynamic field.

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What Services Does a California Business Lawyer Provide?

A California business lawyer helps protect your company by providing legal guidance on structure, taxation, contracts, and compliance. Their services ensure you avoid costly mistakes and navigate disputes, allowing you to focus on growth.

Where Can I Find a Business Lawyer?

Find a skilled business lawyer to navigate legal matters like contracts, trademarks, and liability issues. Protect your company with expert legal advice and support.

What Are the Requirements for a Business Contract Termination Letter?

A contract termination letter must clearly state the reason for termination, reference the original contract, and follow required notice procedures. Ensuring proper documentation and adherence to contract terms helps prevent legal disputes and wrongful termination claims.

Are Verbal Contracts Binding in California?

A verbal contract can be legally binding in California, but proving its terms in court is often difficult. Written agreements provide stronger legal protection, reducing risks of disputes and misunderstandings.

Where Can I Find a Business Lawyer Near Me?

Find a business lawyer by seeking referrals, researching credentials, and ensuring they specialize in your industry’s legal needs. Schedule consultations to assess their expertise, compatibility, and pricing structure before making a final decision.

What Is the Statement of Information and When Is It Required?

A Statement of Information is a required filing for California corporations and LLCs, providing key business and leadership details. Filing deadlines vary, requiring annual or biennial submissions to maintain compliance and avoid penalties.

What Is Indemnity and How Does It Apply to Insurance Contracts?

Indemnity protects individuals and businesses from financial loss by ensuring compensation for damages under legal agreements, including insurance contracts. Various indemnity policies cover liability, property damage, and professional risks, with terms defining coverage limits and exclusions.

What Is Gross Profit and How Is It Calculated in Financial Statements?

Gross profit represents the revenue remaining after deducting the cost of goods sold, helping businesses assess production efficiency and pricing strategies. Calculating gross profit involves subtracting direct expenses from revenue, providing insights into cost control and financial performance.

What Is Gross Income and How Does It Differ From Net Income?

Gross income includes all earnings before deductions, while net income is what remains after taxes and expenses. Understanding these figures helps determine tax obligations, loan eligibility, and overall financial health.

What Is Beneficial Ownership Information and Why Is It Important for Compliance

Beneficial ownership information helps prevent financial crimes by increasing transparency in corporate structures. Businesses should stay informed on reporting requirements to avoid penalties and ensure compliance with evolving regulations.

What Is Arbitration and How Does It Resolve Disputes?

Arbitration resolves disputes by allowing a neutral third party to make binding decisions, offering privacy and efficiency over traditional litigation. Businesses and individuals prefer arbitration for its speed, cost savings, and adaptability, ensuring enforceable outcomes across various legal frameworks.

What Is a Corporation, and How Does It Differ From an LLC?

A corporation is a separate legal entity owned by shareholders, while an LLC offers flexible management and pass-through taxation. Corporations require stricter compliance and structured oversight, whereas LLCs provide fewer formalities and adaptable ownership structures.

How Do You Incorporate a Business, and What Are the Benefits?

Incorporating a business creates a separate legal entity, protecting personal assets and offering potential tax advantages. This process enhances credibility, simplifies ownership transfer, and provides growth opportunities while requiring compliance with specific regulations.

How Do You Get an LLC, and What Are the Benefits of Forming One?

An LLC provides liability protection, tax flexibility, and management freedom for business owners. Follow seven simple steps to establish one efficiently.

How Do You Start a Business, and What Are the Legal Requirements?

Starting a business in California requires careful planning, legal compliance, and financial preparation. From selecting a business structure to obtaining permits, tax registration, and funding, each step is crucial for long-term success.

How Do Accrual Accounting and Cash Accounting Differ in Financial Management?

Accrual accounting records transactions when they are earned, while cash accounting records them when money changes hands. Choosing the right method impacts taxes, financial planning, and cash flow management for businesses.

Do I Need a Permit to Operate a Vending Machine?

A vending machine business requires permits, including a business license, EIN, and compliance with state and federal regulations. Proper location approval, ADA compliance, and product labeling are essential for legal operation and profitability.

Are There Grants Available to Start a Business?

Government and private grants provide funding to help entrepreneurs start businesses, with eligibility varying by industry, location, and business type. Opportunities include federal programs, state initiatives, and private grants supporting startups, research, and minority-owned businesses.

What Is a Stock Corporation in California – General Requirements?

A stock corporation in California raises capital by selling shares, granting investors ownership and voting rights while maintaining limited liability. These corporations, classified as C or S, follow specific legal steps, including filing Articles of Incorporation and drafting corporate bylaws.

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