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Poorly drafted contracts can give rise to commercial litigation

Although start-up ventures may have auspicious beginnings, it's important to have clearly drafted business contracts if things go south. Indeed, there's no absolute safeguard against business litigation among owners, partners or vendors even in times of prosperity.

Running a business usually requires many different contractual relationships. For example, a real estate or leasing contract might govern the physical space where a business operates. Contracts with vendors might govern how a business gets its supplies. Licensing and insurance agreement might be needed before a business can sell its goods. Of course, employment agreements will be needed if a business hires employees. 

Contracts are used to draw up business organization agreements. There are specific limitations on individual liability associated with various business entities. In a general partnership, joint and several liability is usually present among all partners for all debts of the partnership, even if caused by one partner's negligence or misconduct. A limited liability partnership, in contrast, shields some or all partners against this possibility. Various corporate business structures may offer similar protections. 

Yet disputes may arise over the division of duties between owners or partners, between employees and their employer, or between an owner and a vendor. Although a breach of contract lawsuit might be filed in court, an attorney that focuses on commercial litigation might recommend several strategies for resolving disputes.

A lawsuit can take time, and a new business might suffer in the interim. Alternative approaches might be renegotiating a contract or exploring alternative dispute resolution options, while represented by counsel. To learn more about contract dispute options, check out our firm's website on business law and commercial litigation.

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