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31 Jan 2025

Commercial

Commercial litigation

6 Types Of Commercial Disputes

Commercial disputes can arise at any time.

Commercial challenges are an inevitable part of the business landscape.

That said, business owners should be aware that there are many types of commercial disputes that can arise for a number of reasons. 

Before we discuss the types of commercial disputes, it is helpful to know what a commercial dispute is.

What Is A Commercial Dispute?

In short, a commercial dispute is a disagreement between two or more businesses in relation to the exchange of goods and services. 

These disputes can relate to quality, performance, pricing, and more. Disputes can be revolved through several different means, from mediation to adjudication and litigation.

That said, commercial litigation should be considered a last resort due to its cost implications and the potential consequences for your business.

Types Of Commercial Disputes  

Types of commercial disputes include, but are not limited to:

  1. Contractual disputes;
  2. Partnership disputes;
  3. Debt disputes;
  4. Professional negligence;
  5. Shareholder or director disputes; and
  6. Insolvency disputes.

1. Contractual Disputes

Contracts play a fundamental role in business, but they can also lead to commercial disputes.

A contractual dispute can occur when one side of the party fails to comply with the terms of a contract, doesn’t perform their side of the obligations, or the goods supplied are not of satisfactory quality.

A contract is only valid when both parties understand the agreement and are willing to accept the terms, and an ‘employer should make clear which parts of a contract are legally binding’.

That said, contractual disputes can be time-consuming and costly, so you should seek relevant advice from an experienced solicitor to see where you stand in the first instance.

2. Partnership Disputes

The next type of commercial dispute is a partnership dispute. 

For many people, forming a business partnership is a logical option, with you and your partner(s) personally sharing responsibility for your business.

However, partnership disputes occur when disagreements arise between business partners. 

This might relate to ongoing issues in a business, such as company objectives to use of income, for instance.

Alternatively, they may arise due to an unbalanced partnership whereby one partner contributes significantly more than the other. 

Even minor disputes can be detrimental to the future of a business partnership.

3. Debt Disputes

Another type of commercial dispute is a debt dispute.

Debt disputes can arise for numerous reasons, such as faulty goods or services or late delivery.

As many businesses rely on their invoices being paid on time, commercial debt disputes can cause a range of issues.

If your attempts to recover commercial debts have failed, it’s time to seek legal advice from a solicitor. 

Our team of company and commercial solicitors at Harding Evans are on hand to help. Contact us today.

4. Professional Negligence

A common type of commercial dispute is professional negligence. 

Professional negligence is when a professional fails to perform their responsibilities to the required standard or breaches a duty of care.

The poor conduct results in damage being sustained to the client, resulting in a loss. 

That said, professional negligence disputes can be complicated because a professional negligence claim will be unsuccessful if it cannot be shown that the negligence has caused a loss.

5. Shareholder Or Director Disputes 

Shareholder or director disputes involve disagreements between individuals who have a vested interest in the success of a company.

Shareholder or director disputes can arise when a director’s duties are breached or involve an unfair prejudice petition. 

Unfair prejudice petitions typically come about when one or more minority shareholders find that their interests are being prejudiced by a majority shareholder, commonly occurring when the shareholder has control at board level.

6. Insolvency Disputes 

Insolvency is a state of financial distress that occurs when a company is unable to cover the debts it owes due to a lack of funds.

The insolvency of a business can often trigger a commercial dispute.

Disputes can arise between shareholders, stakeholders, banks and insolvency practitioners once the insolvency process has begun.

Resolving Future Commercial Disputes 

With proactive measures and legal guidance, businesses can minimise commercial disputes and prevent them from occurring in the future. 

At Harding Evans, we believe having legally robust, clear and usable commercial contracts in place not only reduces uncertainty and the likelihood of disputes, but also helps to provide solutions when things don’t go according to plan. 

How We Can Help 

Our company and commercial solicitors have an excellent reputation for delivering a high level of service to businesses across Wales and beyond.

If you need help or advice regarding a commercial dispute, our solicitors have the expertise and experience to negotiate complex areas of commercial law and a highly successful track record in settling disputes.

Get in touch with a member of our team today.

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