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Author Archives: Todd McMurtry

How a Solid Buy-Sell Agreement Can Avoid a Bad Business Breakup

Author By Todd McMurtryPosted on

Like a prenuptial agreement in a marriage, a buy-sell agreement is a crucial tool for preventing a messy and potentially disastrous business divorce. This goes beyond disputes over division of money and property. A solid agreement can safeguard the continued existence and success of the business you’ve worked hard to build. By stipulating how owners’ shares may be valued and reassigned if any owner leaves the business, the agreement fosters clarity, control and financial security, allowing you to avert unpleasant and interruptive litigation.

A buy-sell agreement offers these benefits in the case of a business divorce:

  • Orderly succession — A buy-sell agreement defines the process for transition, whether the breakup is due to a planned retirement, a sudden disability or unforeseen circumstances like death or bankruptcy. This pre-determined path promotes a smooth transition, minimizing disruption and maintaining business stability.
  • Avoiding costly battles for control — A buy-sell agreement establishes clear procedures for purchasing the departing owner’s interest in the case of a buyout, retirement or death. This saves everyone time, money and stress, allowing the business to focus on productivity.
  • Setting a price for ownership interests — Closely-held businesses are not valued based on market indicators, so ownership shares are difficult to measure in dollar amounts. A buy-sell agreement can set a fixed price or establish a valuation method, providing both the departing owner and the remaining partners with financial predictability. The agreement can also specify a third-party to serve as the valuation expert.
  • Keeping out intruders — Outsiders with incompatible values or interests may wish to take an ownership stake. A buy-sell agreement gives current owners the power to keep them out. It allows co-owners or the business itself the right or obligation to purchase a departing owner’s stake, effectively acting as a gatekeeper against undesirable takeovers.
  • Job stability — A well-crafted buy-sell agreement can provide job security for remaining owners and key non-owner employees. Knowing the business’s future is secure can boost morale and foster a sense of stability within the organization. It can also help in recruiting new talent.
  • Funding the transition — In an ownership dispute, one of the chief issues is how any buyout offer will be financed. The agreement can provide for insurance policies and other financing to be obtained to make sure purchasing owners or the company itself have the funds to pay for the departed owners’ shares.

No business founders want to think of the possibility of a breakup in the foreseeable future. Nevertheless, engaging in some effective planning at the onset can avert a painful and costly ordeal later on. An experienced business divorce attorney can help you put a well-structured buy-sell agreement in place, one that you can safely rely upon for years to come.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

When Can an “Opinion” Become a Defamatory Statement?

Author By Todd McMurtryPosted on

Defamation is publishing a false statement that causes harm to another person’s or organization’s reputation. A defamation lawsuit can be brought only if the statement is an assertion of fact, not an opinion. Certainly, statements of opinion can tarnish reputations, but in the United States, opinions are protected by the constitutional right of free speech. However, sometimes a statement that purports to be an opinion is capable of being construed by an audience to have a factual basis. If so, and if the statement is false, it can amount to defamation.

One of the most problematic situations in defamation cases is when a statement mixes opinion and fact. A simple statement of opinion is based on underlying facts that have been established. But a mixed statement intertwines opinions with undisclosed or implied facts — or in recent parlance, “alternative facts.”

To resolve the fact/opinion dilemma, courts use a multi-factor test, analyzing the following:

  • Precision of wording — Courts evaluate whether the language used implies an assertion of fact. If the language is loose, figurative or exaggerated, it may lean toward being an opinion. On the other hand, if the statement contains specific details, it might be treated as an assertion of fact.
  • Verifiability — Factual statements are typically capable of being proven true or false through external sources. Opinions, by contrast, convey the speaker’s own sense of morality, propriety or other personal standards.
  • General context — Courts consider how and where the statement was made, taking into account the medium and its audience. Statements made in an editorial, commentary or opinion piece may be more likely to be considered as expressions of opinion, while statements presented as news reports are typically treated as assertions of fact.
  • Broader context — This level of analysis seeks to ascertain the credibility that might be accorded to the statement by any reasonable reader.

The fact/opinion analysis is especially difficult when it comes to statements made on the internet. Fact and opinion are routinely mixed in postings on social media platforms like Facebook, Twitter and Tik-Tok and discussion forums like Reddit, Quora and Digg. These online apps serve as news aggregators, and there is little or no effort by their hosts to control content. Posters often express opinions while linking to sources of uncertain veracity, thereby potentially spreading misinformation.

Despite the challenges posed in evaluating statements made on those new forms of media, the opinion defense is still a force to be reckoned with in defamation cases. Nevertheless, it is not bullet-proof. An experienced defamation attorney can demonstrate how statements alleged to be opinions might contain or imply untrue statements of fact for which you may be entitled to recover damages.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

Red Flags That Your Lawyer May Be Committing Malpractice

Author By Todd McMurtryPosted on

Legal malpractice is easy to define but often hard to spot as it occurs. In general, it means a lawyer failed to exercise the accepted professional standard of care for the type of matter being handled, and that this failure caused the client harm. The problem is that malpractice may not be suspected by the client until the case ends unsatisfactorily.

If you’re involved in a legal matter, noticing the signs of possible legal malpractice by your attorney can put you in better position of averting a negative result. Here are some red flags you can be on the alert for:

  • Foot dragging — If your lawyer seems to be delaying any aspect of your case, it could be a sign of lack of industry or preparedness. Some delays are to be expected, but an unexplained or extended lapse of time could risk missing the statute of limitations, which can cripple your case.
  • Missed deadlines — Worse than foot-dragging is failing to serve or file pleadings or other documents on time. The negative results can include court-imposed sanctions or possible case dismissal. You can keep tabs on your lawyer’s compliance with deadlines by demanding to be copied on all pleadings and filings.
  • Failure to communicate — This is perhaps the most telltale sign of a lawyer mishandling a case. Failure to advise you of significant events or issues can be detrimental. If your lawyer is not keeping you updated and/or is not returning calls or answering emails, it may signal negligence.
  • Failure to obtain consent — Your lawyer must seek your input and approval when it comes to taking actions that could significantly affect your case’s outcome. This is another reason for demanding that you be copied on correspondence and court filings.
  • Failure to heed instructions — You entrust your lawyer with overall management of your case, but that does not mean he or she can disregard your wishes. The attorney can advise you that adhering to them might not be beneficial but ultimately must follow your instructions.
  • Conflicts of interest —You should be alert to any actions taken by your lawyer that may indicate a lack of loyalty to you. If your lawyer has failed to disclosed a potential conflict, it may constitute malpractice.
  • Settlement pressure — Although a negotiated settlement can be beneficial, you should be on guard if your lawyer seems unwilling or unable to fully explain why. Urging you to accept a settlement without full disclosure of risks and alternatives is unethical and may be harmful.

There are many other indicators of legal malpractice, such as your lawyer seeming unprepared in court, unclear about the current state of pertinent law or at a disadvantage while arguing or trying your case. Recognizing these signs and promptly consulting with an experienced professional malpractice attorney can protect your rights.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

What Is Minority Shareholder Oppression That Can Lead to Litigation?

Author By Todd McMurtryPosted on

Many businesses have only a few owners or shareholders. This is particularly common among closely held businesses. It is the owners who decide major issues such as selling or purchasing assets, merging with another company or declaring dividends. However, not all owners are equal. Individuals who own the majority of the shares have the greater say on these decisions. Minority shareholders have limited power, but they are nonetheless entitled to certain rights. When these rights are infringed, it may constitute shareholder oppression that creates a legal right of action.

Shareholder oppression, in order to be actionable, must comprise conduct that is fraudulent, unfair or illegitimate. Being outvoted on a given issue does not constitute oppression. The majority’s action must be inherently unfair and harmful to the minority’s interests. Examples of shareholder oppression include:

  • Income diversion — The majority owners might divert the company’s net profits to themselves to the prejudice of the minority owners. This can be done in a number of ways, some of which are either fraudulent or illegitimate.
  • Share dilution — The majority owners might pass bylaws that reduce the voting power of the minority. This creates an even bigger power imbalance and gives the majority even greater leverage over the minority shareholders.
  • Denial of access — Minority owners might be denied access to the company’s books and records or they might be restricted from attending official company meetings or entering upon company property.
  • Employment — In many small companies, shareholders are also employees. Sometimes the majority will vote to terminate a minority owner’s employment and remove their access to company property and records.
  • Withholding dividends — Owners typically derive a percentage of the company’s net profits based on their shareholdings. Sometimes majority owners vote to keep the dividend within the company rather than distribute profits. Doing so can cause minority shareholders financial hardship. For some owners, company dividends are a large percentage of their income.

Minority shareholders do have remedies. A Kentucky statute allows a shareholder may seek a court order dissolving the company upon showing that the directors or those in control have acted, are acting or will act in a manner that is illegal or fraudulent. In addition, a minority owner can bring a lawsuit asking the court to use its equitable powers to craft a remedy. The court may enjoin or stop the majority from taking further oppressive actions and reverse those that have already been implemented. The court could also order majority members to buy out the minority at a given price. An experienced business litigation attorney can analyze your situation and advise on appropriate action.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

 

Proven Ways to Ease the Pain of a Business Divorce

Author By Todd McMurtryPosted on

A business divorce occurs when one or more of the company’s owners or partners leave or is forced out by those with a controlling interest. It can happen for myriad reasons, such as personality conflicts, disagreements on business goals or operating procedures and external changes in economic conditions that hurt the company’s profits. In many ways, a business divorce is like ending a marriage. Assets must be divided and any future obligations among the parties must be decided. The process can be contentious, frustrating and expensive.

However, there are ways to make a business divorce more efficient and less painful. Here are some positive actions that small business owners can take in preparing for a breakup:

  • Proactive planning — The reality is that most startup businesses change ownership or dissolve within a few years. However, entrepreneurs often do not often contemplate restructuring or failing. It is critical to enter the venture with an understanding of those risks and to craft a plan of action in case a business divorce becomes necessary. This can be done through the company’s bylaws or operating agreement. These documents can govern how a business divorce will proceed and specify each owner’s rights and responsibilities both during and after the divorce.
  • Focus on the process — Some owners take business divorces very personally. They will use the divorce as a platform to blame and berate other owners and as a tool to seek retribution. This is shortsighted, as this type of conflict only makes business divorces take longer and cost more. Every owner should focus on making the divorce as clean and orderly as possible. By doing so, the parties can quickly move on to other business opportunities.
  • Hire a mediator — A mediator is an unbiased third party who can help facilitate the settlement of a business divorce. The mediator should be familiar with the company’s line of business and its relevant market. A good mediator will be able to explain the strengths and weaknesses of each party’s legal position, temper unrealistic expectations and increase the chances of the parties negotiating a settlement.  
  • Be flexible — Whether a business divorce is negotiated, mediated or litigated, no party is likely to get everything they want. Divorcing owners should concentrate on coming to an agreement that is fair and reasonable overall. All owners should be prepared to make some concessions. Every hour spent on the divorce is one less hour available for engaging in productive activity.   

An experienced business divorce attorney can advise you about the best options to accomplish the ownership change in your company, whether it involves a buyout of a departing owner, the sale of the owner’s interest or, as a last recourse, the company’s liquidation.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

Proving Damages in a Business Defamation Lawsuit

Author By Todd McMurtryPosted on

It can take years for a company to develop a reputation among its customers, suppliers, investors and employees. But that reputation can be quickly impaired when someone disseminates falsehoods about the company, its employees or its goods and services. This is known as business defamation and it may entitle the injured company to legal relief and compensation.

Business defamation differs from personal defamation in that damages are not presumed. The defamed company must prove monetary losses or other economic damages. Further, there must be an identifiable link between the false statements and the harm suffered by the company. The losses must also be reasonably quantifiable, not speculative. In other words, there must be a measurement of the amount of loss attributable to the defamatory statements.

Proving damages caused by business defamation often requires the use of expert witnesses. In many cases, experts demonstrate that the company had a long history of stable financial results right up until the time the defamatory statements were published. Then there was a significant or even precipitous drop in performance. Financial reports and projections also are used to show how the false statements brought actual economic harm to the business.

There are several different kinds of economic losses that may be demonstrated, including:

  • Lost revenue — If the defamatory statements caused an immediate and significant loss in sales, this will be evident in the periodic financial reports. Lost future revenue may be shown in the company’s sales projections. While future revenue is hard to predict, sales projections may be persuasive evidence if the analyses are logical and credible.
  • Lost profits — Revenue and profits are often tied together. However, not all sales generate the same profit margins. Defamatory statements might cause only a modest reduction in revenue but a large drop in net profits. Both recent profit reports and future profit analyses can be used in assessing damages.
  • Lost shareholder value — Defamatory statements can affect the value of the shares. This is particularly important when the stock is publicly traded. Poor financial performance easily affects stock price in the near term. Also, defamation losses may undermine the public’s faith in maintaining or growing shareholder value, which in turn can affect current and future stock prices.
  • Damage control — Companies might spend large sums of money in refuting false claims and pursuing defamation actions. Advertising, public relations firm costs, legal fees are often necessary expenses in countering business defamation. These costs may be compensable in a business defamation lawsuit.

Proving these damages can be complex, especially because valuation of a company’s worth and future prospects is subjective and may be challenged by the defendant’s own experts. An experienced business defamation attorney can analyze your situation and advise about the best approach to proving the case.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

 

7 Key Clauses to Include in a Terms and Conditions Agreement

Author By Todd McMurtryPosted on

As recently as 2018, just half of the country’s small businesses had a website. But today, in the aftermath of pandemic-era lockdowns and closures of physical plants, around 95 percent of small businesses have some form of online identity. The internet offers powerful tools to present your products, generate revenue and provide customer service. However, taking full advantage of an internet presence requires devising new ways to deal with the public, including adoption of a terms and conditions agreement.

Also known as terms of service (TOS), a terms and conditions agreement outlines the rules governing your website or app and defines the relationship between you and your users, who implicitly agree to the terms and conditions.

The TOS should be crafted to fit the types of merchandise and services that your business offers, but certain provisions are generally advisable. Here are seven clauses that you should consider having:

  • Limitation of liability — You can include disclaimers designed to protect your business from being held liable for certain losses suffered by users, such as data loss, malware infections and other mishaps outside your control. You can also state a maximum amount of damages for which your company can be held liable.
  • User code of conduct — Any site or app that allows users to post content, such as reviews or comments, should have a code of conduct. It should also state the consequences of posting unacceptable content, such as account suspension or termination. The code can explain that you have the right, but not the obligation, to remove offensive user posts.
  • Governing law clause — This tells users that if they file a legal claim against you, it will be governed by the laws of the state you specify.
  • Intellectual property clause — This prohibits the use or distribution of your company’s name, logo, domain name, trademarks or copyrights without your permission.
  • Payment and refund procedures — The TOS should clearly explain the payment methods you accept, the consequences of non-payment and your policy for issuing or refusing to issue refunds.
  • Termination clause —This reserves your right to delete a user’s account if they violate the terms of service.
  • Cookie usage — The TOS should explain how your site or app uses cookies to track users and to provide them with relevant information. It should also explain users’ rights to limit or prevent use of cookies.

There may be other clauses you’ll want to include, such as one setting out a procedure for conflict resolution. A qualified business attorney can analyze your situation and draft a TOS that is best suited to your needs and objectives.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

What Are the Most Common Forms of Legal Malpractice?

Author By Todd McMurtryPosted on

You expect your lawyer to represent you effectively and to work hard to achieve the results you want. However, the fact that the lawyer fell short of your expectations doesn’t automatically mean you can sue for legal malpractice. Also known as professional negligence, malpractice is limited to situations where an attorney does not act according to the accepted standard of professional care. The lawyer might do something that a reasonably competent lawyer would not have done in a similar case or, conversely, might fail to do something that should have been done. In addition, the act or failure to act must have harmed the client in some way.

The following are some of the most common examples of legal malpractice:

  • Commingling funds — This means the attorney or law firm failed to keep client funds in accounts separate from business accounts.
  • Lack of experience or training — Lawyers cannot know everything about every area of law, so they are obligated to take only those cases they are competent to handle. A corporate lawyer who has no experience in family law could make critical mistakes in a divorce case.
  • Missing deadlines — Attorneys are expected to adhere to all deadlines imposed by law and by courts or other tribunals. Among the most critical deadlines are statutes of limitations that set time limits on certain claims.
  • Not knowing the facts or applicable law — Lawyers must take the time to learn the facts and laws applicable to each case in order to represent the client’s interests thoroughly and effectively.
  • Fraud or misrepresentation —Lawyers must disclose to clients all material information about their cases and do so truthfully. Lawyers also have a duty of candor and honesty to courts and tribunals, as well as to other parties and lawyers.
  • Failure to communicate — Lawyers have a duty to keep clients informed of what is happening in their cases so the clients can participate in making informed decisions. 
  • Improvident acceptance or rejection of settlements — Lawyer should not accept settlement offers that are not in their clients’ best interests, nor should they reject settlements that might be beneficial. Failure to discuss settlements with clients can also constitute malpractice.

Legal malpractice claims can be challenging to win. You have to prove that you would have achieved a benefit if your attorney had adhered to the proper standard of professional care. This is known as a “case within a case,” since it means presenting evidence sufficient to support a favorable outcome in the underlying matter. The lawyer you retain for your legal malpractice claim should also have familiarity with the area of law involved in the original case.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

Determining Company Value During a Business Divorce

Author By Todd McMurtryPosted on

Dividing property is one of the most important and potentially contentious aspects of business partners falling out and going their separate ways. A business divorce requires that the company be fairly valued so that all or part of it can be sold, whether to insiders or to outside buyers.

A business valuation analyzes all areas of the company to determine the worth of its various departments and of the entity as a whole. Professional evaluators look at such as elements as the company’s capital structure, its management, the market value of its assets and its future earnings potential.

There are numerous ways to value a company during business divorces. Some of the most common methods are:

  • Market capitalization — The value of a public company typically is calculated by multiplying the company’s share price by the number of shares outstanding. If the price is $50 and there are one million shares outstanding, the company’s value is $50 million.
  • Times revenue — A multiplier is applied to the revenue the company has generated over a certain time period. The multiplier varies by industry. A tech company might be valued at 5x revenue while a service company might be valued at 1x revenue.
  • Earnings multiplier —The company’s price-to-earnings ratio is adjusted to account for current interest rates. This is often more accurate than the times revenue method because the earnings multiplier is based on profits.
  • Discounted cash flow — This is similar to the earnings multiplier method, except that the company’s cash flow is calculated taking inflation and other market risks into account.
  • Book value — This is the company’s total assets minus its total liabilities as shown on its balance sheet.
  • Discretionary earnings — This method, often used for valuing small businesses, takes gross earnings and adjusts them for depreciation, interest expense and non-operating and non-recurring income.

When business owners are engaged in a split up, it is to be expected that the choice of valuation method will be a point of contention. Different owners will likely choose their own evaluators, with each employing a different method. If the owners can’t agree on a selling price, some form of alternative dispute resolution, such as mediation, may be used to arrive at a settlement.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

What to Do if Your Business Gets Sued for Breach of Contract

Author By Todd McMurtryPosted on

Contracts have been called the lifeblood of a business, and when unexpected troubles interrupt the flow, the health of the enterprise is affected. Being sued for breach of contract can greatly tax your business, costing you legal fees and exposing you to the risk of paying monetary damages. If you have been sued or believe that you might be sued, there are prudent steps you should take.

Even if you have not yet been served with a complaint, consult with a business attorney about the risk of litigation and how to prepare. At your initial consultation with the attorney, you should bring a copy of the contract, your business liability insurance policy and any other relevant documents. Your attorney can review the situation and your relationship with the prospective plaintiff and can advise you about possible actions to avert the suit.

Once you are sued, you should immediately contact your insurance carrier. You may hold a general liability policy, a commercial property policy or a business owner’s policy that includes both. Provide the carrier with a copy of the complaint and answer any questions the insurance adjustor asks about it. If your policy covers the dispute, the insurance carrier has a duty to defend you, which means that it must provide you with capable legal counsel. If you don’t have a policy that covers the dispute, you must retain your own lawyer.

Your attorney, whether provided by the insurer or retained by you, will take the following steps as appropriate:

  • File a motion to dismiss the complaint, based on any substantive or procedural defects.
  • File an answer to the complaint, listing your defenses and raising any counterclaims you might have against the plaintiff.
  • Conduct discovery, which is a set of procedures for obtaining information from the opposing party, which could include requests for production, interrogatories (written questions) and depositions (oral questions).
  • Help you respond to discovery and represent you and your employees during depositions.
  • File and respond to pretrial motions.
  • Conduct settlement negotiations on your behalf.
  • Prepare evidence and witnesses for trial.
  • Present evidence in your favor and rebut the plaintiff’s evidence during trial.
  • File or respond to any post-trial motions.
  • Represent you in any appeals.

If you retain your own counsel, make sure the firm is experienced in business litigation as well as in negotiation. Skillful handling of breach-of-contract cases includes making efforts to avoid excessive costs and disruption of business operations, as well as to preserve customer and supplier relationships to the extent possible. These goals are best accomplished if the case is settled out of court. However, the attorney must always be prepared to effectively protect your interests at trial.

About Finney Law Firm, LLC

Founded in 2014, FLF has grown to 15 attorneys located in offices in Eastgate and downtown Cincinnati with five major practice areas: Corporate Law, Real Estate Law, Employment Law, Commercial Litigation and Public Interest and Constitutional Litigation.  FLF has the unique claim to three 9-0 victories at the United States Supreme Court for its public interest practice along with breakthrough class action work.

FLF also has an affiliated title insurance company, Ivy Pointe Title, LLC, that closes and insures nearly a thousand commercial and residential real estate transactions annually.

For more information about Finney Law Firm, visit finneylawfirm.com.

Media Contact: Mickey McClanahan; mickey@finneylawfirm.isoc.net; 513.797.2850.

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