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What Is Commercial Litigation?

A confidentiality agreement is sometimes signed.
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  • Written By: Erin Oxendine
  • Edited By: Bronwyn Harris
  • Last Modified Date: 30 September 2014
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Commercial litigation is an area of law concerning legal disputes involving businesses or companies. Disputes are often about financial and property issues as well as contract disagreements. An attorney who helps businesses and other related parties in commercial litigation is a business lawyer.

The driving force behind commercial litigation is to try to settle disputes as they arise without heading to court. One area in commercial litigation that attorneys handle is real estate sales involving land acquisitions and company mergers. Often, when a company is planning to buy out another company, the company that is being purchased may have financial issues. A commercial attorney will help with the merger by reviewing stock sales, negotiating employee contracts and making sure the sale adheres to legal guidelines.

Another area in commercial litigation is establishing business partnerships for two or more owners of a business. A partnership can establish ownership rights, duties of the partners, and financial obligations. Contracts clarify what percentage of the income the partners and any other owners are entitled to in the event that one partner decides to leave the business.

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Commercial litigation also involves drafting contracts to clarify agreements between employer and employee. These contracts can involve keeping company secrets such as confidential information and company trade secrets for products. Some employees also have to sign contracts regarding ownership of new products made by the employees while employed with the company. Most companies make their emails as well as memoranda a part of the confidentiality agreement. By entering into a contract, companies have the right to prosecute employees in a court of law if they give pass along information to a new employer regarding products and privileged information.

Certain business contracts include an arbitration clause, which means that if the business cannot resolve a dispute or contractual disagreement, the business owner can have the case heard in arbitration. By having the matter in arbitration, the parties forego a court hearing, which could take further time and cost money. An arbitrator listens to both parties’ sides and then tries to come up with a solution mutually agreeable to everyone.

Insurance defense is also a vital part of commercial litigation since most companies carry insurance in the event that an employee, customer or another business names the company as a defendant. When a person or another business sues a company, the owner or representative of the company has to turn it over to their insurance agent. The insurance adjuster retains a business lawyer depending on the expertise needed to represent the insurance company and the business.

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