The fights that turn into business lawsuits

Most business lawsuits start from the same few problems:

• a customer will not pay, or a supplier sent the wrong or broken goods;
• you and another company read the same contract two different ways;
• a lender or guarantor dispute over a loan;
• a former employee or partner took your customers, prices or other secrets;
• someone lied to get you into a deal;
• your own co-owners disagree. That has its own page: partner and shareholder disputes.

Some of these have their own pages too: breach of contract, fraud and injunctions. This page covers what is different when both sides are businesses.

What changes when both sides are businesses

Consumer protection laws often do not help

Missouri’s main consumer fraud law protects people who buy things mostly for personal, family or household use. If your business bought something for business use, that law usually does not apply. Your rights come from the contract and from general laws, like the law against fraud.

Loan terms are mostly what you signed

Missouri lets businesses agree in writing to any interest rate and fees on a business loan. So if you are fighting a lender, the loan papers matter most.

Where you can sue an LLC

You can usually sue a limited liability company (LLC) in the county where the problem happened, where it has an office, or where its registered agent is located.

Ask the court to settle a question early

You do not always have to wait until the damage is done. A Missouri court can declare what a contract means before anyone sues for money. This is called a declaratory judgment.

It helps when two companies disagree about whether a contract has ended, whether an exclusive deal still applies, or whether a promise to back a loan still counts. Getting an answer early can save a lot of money later.

Protecting your secrets and your customers

If a former employee or competitor takes your private business information, time matters. Missouri law lets a court order someone to stop using or sharing your trade secrets. A trade secret is private business information, like a customer list or pricing, that you work to keep secret. The court can even order steps to protect it.

The fast court orders used for this are explained on our injunctions page. Whether a non-compete agreement can be enforced is covered at employment agreements and non-competes.

Save your emails and files now

In business cases, most of the evidence is electronic. Think emails, accounting software, customer records, shared drives and phones. The other side can ask for all of it, and can even ask for original computer files.

If a lawsuit is likely, do three things now:

1. Turn off any automatic deletion of emails and files.
2. Tell the people who have the records to keep them.
3. Write down that you did both.

A company that destroys evidence can be ordered to pay the other side’s legal fees. In serious cases, it can lose the case.

Picking the right place to fight

Before we file, we answer three questions. Does your contract require arbitration? Does it say where you must sue? Are the two companies from different states? If they are, federal court may be an option.

Each answer changes the cost, the timeline and your right to appeal. Harjot Singh Padda, JD, puts these answers on one page for you, along with your deadline and your options. Then you can decide whether to sue, defend, negotiate or wait.

Common questions

Related reading

• Civil litigation overview
• Breach of contract
• Business and corporate law
• Federal court litigation
• Employment agreements and non-competes