Business litigation disputes can stem from any number of causes, but there are a few areas that litigators see more than others. The upshot is that by taking note of the most common sources of dispute, companies can proactively tighten up policies and strengthen contracts to mitigate as much litigation risk as possible. And while some disputes come from age-old triggers such as breach of contract, the rapid integration of artificial intelligence (AI) and changing regulatory frameworks can make it imperative that businesses take an agile approach to protecting themselves.
The following are common litigation issues between businesses today:
1. Breach of Contract & Economic Disputes
Contractual disagreements remain the most frequent source of litigation, often centered on:
- Performance & Delivery: Lawsuits arising from supply chain inconsistencies or missed deadlines, where one party claims “force majeure” or “commercial impracticability” to excuse non-performance.
- Pricing Conflicts: Disputes over price-escalation clauses or the ability to pass through increased labor and material costs to the other party.
- AI-Generated Agreements: Poorly written contracts that allow parties to shirk responsibilities, alter performance, or demand extraordinary privileges without clear language to enforce have always been a problem. This has only accelerated with the use of AI. The rising trend includes litigation over “hallucinated” or unenforceable terms in contracts drafted by AI without sufficient legal oversight, leading to disputes over governing law or indemnification.
2. Employment & Labor Compliance
Employment litigation continues to evolve as businesses adapt to hybrid work models and changing federal oversight. Typical disputes include:
- Worker Misclassification: High-stakes lawsuits regarding whether workers are independent contractors or employees, impacting benefits, taxes and overtime pay.
- Wage and Hour Claims: Litigation regarding uncompensated “off-the-clock” work, especially for remote employees where tracking hours is less centralized.
- Restrictive Covenants: Disputes over non-compete and non-solicitation agreements, which are facing increased scrutiny and legal challenges from regulatory bodies.
3. Partnership and Shareholder Conflicts
Internal disputes often turn into external litigation when partners or business owners want to go separate ways, resulting in:
- Fiduciary Duty Breaches: Allegations that a partner or director acted in their own self-interest rather than the company’s, often during a merger, acquisition or liquidation.
- Governance & Strategy: Lawsuits filed by minority shareholders or partners who feel excluded from decision-making or believe the majority is mismanaging assets.
- Dissolution Disputes: Conflicts over the valuation of assets and the distribution of funds when a company closes or a founder departs.
4. Intellectual Property (IP) & Data Privacy
As digital assets become the primary value-drivers for many firms, IP litigation has moved to the forefront. Clashes between businesses commonly center around:
- AI Training & Copyright: Businesses suing one another over the use of proprietary data to train machine learning models without authorization.
- Trade Secret Theft: Lawsuits involving former employees or partners who allegedly took proprietary processes, client lists or software code to a competitor.
- Data Breach Liability: When a business partner (like a vendor or cloud provider) suffers a security failure, the resulting litigation often concerns who is contractually liable for the lost data, customer claims, or damages, and regulatory liability.
5. Regulatory & Tax Litigation
Increased enforcement from federal, state and local agencies has led to a rise in international and domestic compliance disputes, including:
- Tax & Tariff Challenges: Disagreements with authorities—and between business partners—regarding the allocation of tax burdens, especially following recent legislative updates like the “One Big Beautiful Bill Act” (OBBBA).
- Environmental & Safety Compliance: Lawsuits between contractors and owners over who is responsible for meeting new, stricter environmental or workplace safety standards.
Hackstaff, Snow, Atkinson & Griess Business Law Practice Can Help.
Our experienced business attorneys can help not only when disputes arise, but also when businesses want to evaluate their policies and contracts to better protect themselves against future litigation. Learn more about our Business Law practice.
If your business is undergoing potential litigation or you simply want help strategizing ways to mitigate risk, our attorneys are here for you. Contact us for a consultation.