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Major Causes of Business Litigation -- Part 2

Buffington Law Firm's business trial attorneys have broad experience in handling many types of breach of contract and other business disputes. In Part 1 of this series we discussed the importance of ensuring that a business contract sets realistic goals for the parties, rather than "aspirational" goals which are realistic only in a perfect world. In this second installment, we discuss the increasingly common problem of business transactions for which the parties draft no contract at all. It may seem odd that a six or seven figure venture, agreement, or transaction would be carried out without a written contract. In the real world, it happens. Perhaps most often this sort of transaction occurs between family members who "trust one another." Other times the parties simply never get around to finalizing the contract in the midst of all of the activity getting the venture or transaction up and running. Just as "good fences make for good neighbors" a good contract that spells out the rights, duties, and the contributions of the parties can avoid disputes and keep the parties out of court. Few things are nastier than a business dispute between angry family members.

Experienced business trial lawyers know that in court pretty much nothing is more persuasive than "the written word." Where there is a contract the court and jury can actually see, in written form, what the parties said was supposed to happen in a transaction. Without a contract, not so much. Buffington Law Firm's business trial attorneys have tried numerous cases involving large transactions in which the parties did not embody their agreement into a writing. This puts the claimant at a distinct disadvantage when he or she is trying to enforce an agreement the terms and details of which are the subject of heated dispute. Typically, testimony in court goes every which way.

These situations become even more dangerous when parts of the transaction were done by contributions by one or more parties in cash money rather than a documented transaction such as a check or wire transfer. Our business trial attorneys have handled cases in which the entire transaction was done in actual cash currency. To say that courts are unsympathetic to litigants who claimed to participate in a transaction of this type, e.g. all cash, no written contract, is an understatement.

When a party has a claim deriving from a business transaction for which there is no contract this can involve challenges deriving from either the Statute of Limitations or the Statute of Frauds. The statute of limitations for a written contract is four years, while for oral agreements it is two years. Worse, the Statute of Frauds makes certain types of oral contracts unenforceable in court. While a detailed discussion of these issues is beyond the scope of this short Blog article, it further illustrates the hazards of doing business without a written contract.

If you are involved in a dispute over a business transaction, we invite you to call our office for a free legal consulation with one of our experienced trial lawyers. There is never any charge or obligation, and we will discuss your case with you on a confidential basis.

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Buffington Law Firm, PC
8840 Warner Avenue Suite 300
Fountain Valley, CA 92708

Toll Free: 800-835-2447
Phone: 714-450-6568
Fax: 714-842-6134
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