Frequently Asked Questions About Commercial Litigation in New York
What is commercial litigation?
Commercial litigation generally involves legal disputes arising from business relationships, commercial transactions or the operation and ownership of businesses.
Examples include breach-of-contract cases, disputes among business owners, fraud and business tort claims, restrictive-covenant disputes, breach-of-fiduciary-duty claims, and disputes concerning the interpretation or enforcement of commercial agreements.
Commercial disputes may be litigated in New York State or federal court or, where applicable, resolved through arbitration or mediation.
What remedies are available in a New York commercial dispute?
The appropriate remedy depends upon the nature of the claim and the governing agreement.
Monetary damages are common in commercial litigation, but they are not the only potential remedy. Depending upon the circumstances, a party may seek declaratory relief, specific performance, a temporary restraining order, preliminary or permanent injunction, or other equitable relief.
Determining the desired remedy early in the case can be important because it may affect how the action is pleaded and litigated.
Can I obtain an injunction in a New York business dispute?
Potentially. New York courts may grant temporary or preliminary injunctive relief when the applicable legal requirements are satisfied.
In commercial cases, injunctions may be sought in disputes involving restrictive covenants, confidential information, business ownership or control, contractual authority, or other circumstances in which monetary damages alone may not adequately protect the party seeking relief.
Because applications for temporary restraining orders and preliminary injunctions can move quickly, parties facing an urgent commercial dispute should consider obtaining legal advice promptly.
Are non-compete agreements enforceable in New York?
The enforceability of a restrictive covenant depends upon the particular agreement and circumstances.
New York courts generally scrutinize post-employment restrictions and consider factors including the scope and duration of the restriction, the interests the restriction is intended to protect, and the burden imposed on the restricted party.
Non-solicitation, confidentiality and other restrictive provisions can raise different issues depending upon their language and the underlying relationship.
Businesses seeking to enforce restrictive covenants and individuals asked to comply with them should have the specific agreement and circumstances evaluated before assuming that a restriction is either enforceable or unenforceable.
What is tortious interference with a contract?
A tortious-interference claim may arise when a third party intentionally interferes with an existing contractual relationship under circumstances recognized by New York law.
These claims are distinct from ordinary breach-of-contract claims because the defendant accused of interference is generally not the party that breached the underlying contract.
New York also recognizes, under different and generally more demanding requirements, claims involving interference with prospective business relationships.
Can I bring fraud and breach-of-contract claims in the same lawsuit?
Sometimes.
A commercial dispute can involve both contract and tort claims, but simply characterizing a contractual breach as fraudulent does not necessarily create an independent fraud claim.
Whether both claims can properly proceed depends upon matters such as the nature of the alleged misrepresentation or duty, how it relates to the contract, and the injury for which relief is sought.
Careful pleading is particularly important when fraud, breach of fiduciary duty or other business tort claims accompany a breach-of-contract claim.
What happens when business owners disagree about control of a company?
Ownership and control disputes often depend upon the entity’s governing documents, such as an operating agreement, shareholder agreement, partnership agreement, bylaws or other contractual arrangements.
The dispute may concern voting rights, management authority, removal or appointment of officers or managers, access to information, fiduciary obligations or whether particular actions were properly authorized.
In some cases, declaratory or injunctive relief may be appropriate where the dispute threatens the continued operation of the business or one party is allegedly exercising authority it does not possess.
Should a commercial dispute be litigated, arbitrated or mediated?
That depends upon the governing agreement and the circumstances.
Some contracts require arbitration and therefore limit the parties’ ability to litigate the dispute in court. Where arbitration is not mandatory, the parties may still agree to arbitrate or mediate.
Litigation may be appropriate when court-ordered relief is necessary or when the nature of the dispute requires judicial determination. Arbitration may offer a private alternative forum. Mediation can allow the parties to explore settlement while retaining control over whether to accept the proposed resolution.
The best forum depends upon the dispute, contractual provisions, available remedies, cost, timing and the client’s objectives.
When should I contact a commercial litigation attorney?
Ideally, before the dispute reaches a point where important options have been lost.
Early advice can be useful when a significant contract has been breached or is threatened with termination, a business relationship is deteriorating, a restrictive-covenant dispute is developing, confidential information may be compromised, business owners are disputing control, or litigation appears likely.
Early evaluation can also help preserve documents and evidence, identify potential claims and defenses, and determine whether immediate court intervention should be considered.
Experienced Commercial Litigation Representation
Thorgood Law Firm brings nearly three decades of legal experience to significant commercial disputes.
Our litigation background encompasses commercial and civil litigation, New York State and federal court proceedings, appellate matters, U.S. Tax Court litigation, arbitration and mediation.
We bring the same careful preparation, detailed legal analysis and strategic approach developed through decades of high-stakes tax controversy and litigation to our representation of clients in commercial disputes.
Clients should understand the strengths, weaknesses, risks and practical consequences of their available options. Our role is not simply to identify possible causes of action. It is to help determine how best to protect the client’s interests and resolve the underlying dispute.
Speak With a New York Commercial Litigation Attorney
If you are involved in a significant contract, business ownership, restrictive covenant, business tort or other commercial dispute—or believe litigation may be imminent—early evaluation can help protect your rights and preserve available remedies.
Thorgood Law Firm represents plaintiffs and defendants in commercial disputes in New York State and federal courts and in arbitration and mediation proceedings.
Contact Thorgood Law Firm to schedule a consultation regarding your commercial dispute.