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What Does It Mean If a Company Is in Litigation?

Posted on December 28, 2023 in asset protection

Companies enter litigation when they are in dispute with another party. These disputes may come from an external source, or the company may bring litigation against another entity. Regardless of the nature of the case, any company anticipating going through litigation needs to have an experienced Nevada business litigation attorney on retainer to assist them through the process.

What Constitutes a Company in Litigation?

A company finds itself in litigation anytime it takes a legal dispute to court. During litigation, the company and its lawyer will argue in front of the court to defend their position or attempt to win a claim against another party. Businesses have different legal needs than individuals, as they will be dealing with issues ranging from trademark violations to breach of contract. These topics often require an experienced Las Vegas business litigation attorney to handle.

What does it mean if a company is in litigation?

Why Do Companies Go Into Business Litigation?

Businesses go into litigation for several reasons, but most of these involve protecting the company and its rights. Some of the common reasons for business litigation include:

  • Breach of contract: When a business signs a contract with another company or individual, it expects the other party to uphold the end of the agreement. A company can file a claim for breach of contract against a company that fails to deliver goods or does not perform a service up to the agreed-upon standard. Breach of contract extends to oral agreements as well as written ones.
  • Intellectual property misuse: You can file a trademark for symbols and iconography associated with your business. Other entities cannot use these symbols without your permission. If a business owner notices someone misusing their intellectual property, they can file a claim to seek restitution for this misuse. Litigation might win the plaintiff the money the defendant earned through the misuse.
  • Violation of noncompete clauses: Some employees sign a noncompete clause with their employer that prohibits them from working at a similar, competing company for a period. If a former employee violates a noncompete, it is a valid reason for a company to enter litigation to prohibit the action.
  • Partnership issues: Some business owners go into a partnership with one or more individuals to begin a business. When things are copacetic, this can help a business by giving multiple voices and perspectives. But when one partner seeks to damage the business in some manner, the other partners have the right to bring legal action against them.

What’s the Difference Between Litigation and Settling?

When a business seeks to file a claim or is the target of another party’s legal action, they have two main actions they can take. They can seek to settle the matter out of court or to litigate it and have the court hear the case.

Settling outside of court has advantages for a business. They can keep the nature of the case out of the public eye, especially if the information would negatively impact the perception of the company. A settlement also allows the company to negotiate the final outcome, and you won’t be beholden to a judge’s verdict.

Litigating carries advantages, too. You can get the most winnings by taking the matter to court, and you can ensure someone hears the evidence you have.

Should You Hire a Lawyer When Your Business Is Dealing With Litigation?

Whether you are dealing with corporate or business law, hiring a Las Vegas business litigation attorney to handle your case is a necessity. An attorney will know any relevant case law and precedents that may impact your case. And they can give you an honest appraisal of your chances in court, and they may advise you to take a deal and settle before the trial.

While some business owners may want to go it on their own and save money, this can end up costing you in the long run. You likely won’t have time to study everything you need to know, and you’ll still have to run your company while you prepare for your case. Hiring an attorney gives you peace of mind and a good chance at a positive outcome.

FAQs

Q: Why Would a Company Opt to Litigate Over Settle?

A: A company may decide to litigate if the other party is not willing to settle out of court or if the other party isn’t negotiating a settlement in good faith. When litigating, the parties involved must accept the outcome and decision. A judge may order the other party to pay back more than they were willing to settle for.

Q: What Are the Downsides of Litigation for a Nevada Company?

A: Litigation isn’t a perfect solution, and some companies may want to avoid it if they can. Litigation carries risks that settlements don’t. You may be filing a claim against someone for breach of contract, but a judge may not rule in your favor, and you could walk away with nothing. Settling out of court gives you a guarantee. Litigation will also cost more in legal fees than settling, as the process is much longer.

Q: What Are Some Common Reasons For Business Litigation?

A: Businesses often enter into litigation when another party doesn’t uphold their contract. A business may enter into a contract with another party to assist with operations, and a breach of contract is a valid reason to file a claim. Businesses may also go to court if they have a dispute with a partner or they believe someone is infringing on their copyright.

Q: What Does a Business Litigation Attorney Do?

A: Business litigation attorneys assist a company through legal matters by advocating for them in court and negotiating with other parties during settlements. They will also work as a consigliere for the company on legal matters, providing perspective on potential legal action and the viability of taking a case to court.

Ken R. Ashworth & Associates: Experienced Nevada Business Litigation Attorneys

Litigation can be an expensive period for a business, and you’ll want an experienced Las Vegas business attorney to steer you through the process efficiently and effectively. At Ken R. Ashworth & Associates, we can help your business with any legal need. Contact us today for a consultation and to learn more about how we can help.