Below is a list of some of the more common types of disputes in which Atom has represented clients. Often, several of these examples can be found overlapping in one case. No two disputes are ever run-of-the-mill and we have certainly seen many others beyond those listed above. Yours will be unique in some way. Because Atom has a multi-disciplinary practice in dealing with diverse types of disputes and transactions, it is better situated to inform its clients of the potential impact one dispute can have on a seemingly unrelated aspect of its company.
Product & Service liability
A dispute concerning the quality of a high-end custom built manufacturing machine or large quantities of parts may be worth six or seven figures just based on the face value of the products. Such a dispute may be even further heightened based on claims of lost-profits by the purchaser arguing that it lost sales due to defects in the machine or parts it was sold. The seller and buyer may strongly disagree as to whether the product(s) were built to the specifications agreed upon - leading to the realization that the parties may not have been on the same page as to what the custom specifications actually were.
Uniform Commercial Code Disputes
All states have a body of law referred to as the Uniform Commercial Code (“UCC”) that regulates the sale of goods. Apart and aside from their private sales contract, companies must be aware that their sales activity is also governed by the UCC. For example, a buyer may try to demand a return and refund based on revocation of an acceptance of the goods under the UCC. Or a buyer may claim it never accepted the purchased products in the first place despite receiving them - sometimes months after the fact. Other times a buyer may claim that a portion of the seller’s sales terms of sales are trumped by sections of the UCC.
Breach of Contract & Warranties Claims
The parties may disagree on a matter as fundamental as what the terms of the contract were - terms that the seller provided to the buyer, or the other way around. In other cases the dispute may be in regards to whether products were timely delivered, mishandled during transit, whether the proper parties were paid the right sums due, whether a distributor is responsible for a dispute with a buyer, whether the products received/sold were up to the specifications agreed on. The parties may further disagree as to whether warranties were in place and even as to what those warranties were. The parties may also disagree whether the seller provided proper training or follow-up maintenance services.
Non-contract Disputes among Businesses & Company Insiders
Business related torts include claims such as fraud, fraudulent conveyance, breach of fiduciary duty allegations. Some times these claims can be between separate businesses who have had dealings, while other times, the claims can arise within the company, among owners, directors, officers or key employees. When a dispute arises and the basis for the dispute is not a contract, tort claims may exist.
Business relationships with third parties are, under certain circumstances, a protected interest that should be free from another third party's interference. There may be multiple business related torts based on one set of facts.
The same is true in cases involving disputes within a company. For example, breach of fiduciary duty against company insiders may include allegations of conflicts of interest, fraudulent conduct, or breach of the duties of care and loyalty. Intentional or tortious interference with business contracts or business relationships are also common.
Trademark & Trade Dress Infringement
Of the most valuable assets of any business are its trademarks: its name, its logo, or even its trade dress: its product packaging, design, or interior decor. In some instances companies have asserted ownership over something as fundamental as a color in their industry. Trademarks are sometimes registered with the United States Patent and Trademark Office, but not always. An unauthorized third party’s use of these types of property can be tantamount to significant losses. Protection may be available even if trademarks or trade dress are not registered with the United States Patent and Trademark Office. A company may find out someone has been using its trademark to sell their goods causing customers to be confused as to whose products they are buying. In other cases a company may be accused on such infringement but believes the accuser is staking a claim for protection that it is not entitled to.
Employment Related Disputes
Employment disputes can occur both in regards to key employees and wage based laborers.
Disputes with key employees often concern matters arising from an employment agreement, such as non-compete or confidentiality clauses. Other times a breach of fiduciary duties such as the duty of loyalty may be at play.
Employment of wage based employees is regulated both on the state and federal level. Governmental investigations concerning misclassification of wage based employees as independent contractors, minimum wage and overtime compensation issues can often lead to a defensible dispute when there are facts and factors the government has ignored during their investigation. Even if the business decides to comply with the conclusions of an investigation, the government’s initial allegation of sums owed can be lowered by significant sums through careful analysis and argument.
The IRS or a state department of revenue may claim a business failed to pay the actual taxes owed based on a variety of reasons, despite good faith efforts. For example, the IRS may allege that a company or its owners reported losses based on a claimed basis which it believes has not been substantiated. Rules governing basis vary on a variety of factors such as the type of entity your own.
In other situations, a state department of revenue may claim a business underpaid sales taxes despite always having used an accountant for its reporting. Such cases can even give way to potential claims against an accountant.
In some cases, a department of revenue can claim that business owners failed to report proper taxes based on the idea that a 'common enterprise' exists among a number of their separate business entities.
Franchise Related Disputes
Franchise Agreements and Franchise Disclosure Documents are dense and complicated documents. They are also regulated by federal and state government agencies. Parties commonly enter into a business relationship without even being aware that their relationship is actually franchise, subject to all the relevant regulations - the “accidental franchise.” This can make the accidental-franchisor the target of government investigation. At times, the accidental franchisee can use the lack of compliance to void the entire relationship and its own liability to the other party.
In established franchises, because of the volume of responsibilities arising from the agreement, there is a great deal of room for unintended breaches and potential liability by both parties. At times, a franchisee can argue the larger entity, the franchisee, abused its strength in the relationship. Other times, a franchisor may claim that the franchisee failed to comply with restrictions or reporting requirements.
Real Estate Related Disputes
Commercial leases are often worth several million dollars over the span of their term and are often extremely detailed. Most global and national developers use lease formats that are extremely unfavorable to tenants. And yet, these commercial leases are often signed by tenant businesses without the analysis and negotiation necessary, leading to severe consequences, even for successful businesses. At times a business can realize long after entering a lease that a landlord failed to disclose prohibitive zoning restrictions. At other times a tenant can see escalating monthly expenses undermining their profitability. A defaulting tenant can learn too late that simply leaving a premise despite a failing location can be far more costly than staying in business due to accelerated rent provisions. At times, radius restrictions or relocation clauses can have very negative consequences. Settlements for disputes based on such situations and many others can often be negotiated to avoid eviction or excessively costly judgments.