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Depending on the nature of the case, commercial litigation can involve complicated procedures of data collection, collation of evidence, taking of witness statements as well as obtaining expert reports (particularly in relation to financial matters or issues relating to duty of care). Much of Australian commercial law has been effectively codified under statute. Legislative instruments and delegated legislation (such as various regulations and other rules) have largely set the parameters for commercial litigation.

This does not however mean that there are no other sources of legal obligations that need to be considered when repapering a case. Contracts and agreements, for example, whether they are written in deed form or made orally (or where the terms of provisions can be found in both written and oral form) will almost certainly contain provisions relating to duties, obligations, rights and liabilities of parties. The common law itself will contain a host of principles and concepts that relate to commercial law and commercial litigation and that may aid in or sometimes complicate the interpretation of such contracts. Case law will also impose certain obligations on contracting parties that may not have been explicitly stated in any agreement.

Commercial litigation will usually but not always include two major types of claims or sub-claims:

(a)   Contract

Usually, commercial litigation disputes involve a contract in respect of which there is a dispute as to how and whether a party has complied with its obligations. There may be a question as to whether the contract came into existence, whether there was sufficient consideration, whether it was terminated validly, whether a party has a right to withdraw, rescind or make some election. The general laws of contract interpretation will invariably apply here and a commercial litigation solicitor will have regard to them when investigating the terms of the agreement. 

Commercial litigation can surround the exercise of a party’s purported powers where the breach is argued to be a breach of a fundamental term or an essential term of the contract. If a breach is not a breach of a fundamental or essential term of the agreement between the parties, the remedy may not include the innocent party’s right of rescission. In this case, damages may be the only remedy available. However, this can only be determined on a diligent investigation of the factual matrix and the relevant case law. Taking action before this investigation is made can lead a party to do something that was not open to it, and they may render the innocent party guilty of breach itself. On the other hand, failure to exercise a right in a timely fashion may also result in an election to waive that right. Care must therefore be taken before a party commits itself to any course of action. 

Some other common disputes in commercial litigation may include the definition of undefined terms, the scope of provisions, the legal effect of restraint of trade clauses, penalty clauses, liquidated damages clauses, the operation and affect of confidentiality clauses and privacy clauses. A commercial litigation lawyer will consider all of these in light of the facts of the case and the updated laws as they apply to those facts. 

(b)   Negligence and Professional Negligence 

Negligence claims can arise from the same facts as breach of contract claims. Indeed, a breach of a contract may also be sufficient evidence to establish a cause of action in negligence. This of course will depend heavily on the nature of the breach. Negligence claims, and in particular professional negligence claims, are notoriously difficult to prosecute. This is because the consequence of filing an action in negligence can be severe on either party. These are highly sensitive issues in litigation and the standards are therefore high.

A commercial litigation solicitor will need to conduct the necessary factual and legal research before any claims are filed. Filing a claim will set the parameters of the argument being made against the purportedly guilty party. Where that claim has been filed with inaccuracies, amendments may need to be made with leave of the Court. Either way, it will look poorly on the litigant where a claim is filed without proper preparation. The commercial litigation lawyer will need to take diligent instruction from the client and the witnesses, and all witness statements will need to be prepared and scheduled so that the strength of the claim can be assessed before active steps are taken to prosecute it. 

Generally speaking, negligence and professional negligence cases require proof and evidence of a duty of care, establishing that that duty was breached by the party allegedly being negligent, and then adducing evidence into Court which illustrates the type and extent of the damage or loss suffered as a result of the breach.

(c)    Intellectual Property Law

Intellectual property disputes can occur in many commercial claims. These will often arise between individuals who are engaged in a business that uses intangible property such as copyright material, trademarks or patents. Litigation involving intellectual property may well involve claims and counter claims as to the proper title to the property which is subject of the dispute. Title may be challenged on various grounds involving disputed claims over ownership, authorship and the creation of the intellectual property itself. Alternatively, the agreement of contract under which the intellectual property was created or used may contain provisions concerning the use and ownership of the property. These matters will need to be carefully investigated by an intellectual property solicitor for proper legal advice to be provided.

(d)   Business and Corporate Law

There is a host of legislative and other legal provisions that govern the manner in which business and corporate operations can and should be engaged in. Business and corporate law disputes are some of the most common forms of commercial litigation that is taken before courts. For reasons of business efficiency, business and corporate law litigators will traditionally seek a negotiated or settled resolution to a dispute before commencing action in the courts. Sometimes this is not possible and protracted litigation may be the only option available to disputing parties.

Asset protection, disputes between business entrepreneurs, liabilities arising under the principles of employment law, rights and liabilities in relation to actions for debt recovery, as well as matters centred around business tax law disputes, all of these types of cases fall under the broader category of commercial litigation. For more information about these, visitors are encouraged to visit their respective pages.

(e)   Building and Construction Law

Disputes in and around the building and construction practice area can be hotly contested by builders, owners of land, contractors, employees of building companies, insurance companies as well as various third parties. Building and construction law significantly overlaps with the commercial practice area due to the involvement of commercial legal principles. Construction projects can be undertaken for a business or commercial purpose, and disputes may therefore concern the rights and liabilities of individuals as well as their legitimate business interests as well. A building and construction solicitor who deals in such disputes will naturally have the requisite commercial practice experience to offer the necessary legal advice to his commercial clients.

More information can be obtained on the differing and particular types of commercial litigation disputes that can arise, in this “Civil and Commercial litigation” area of this website. Prospective clients are welcome to have regard to these for further information.

If you are preparing to commence or defend a case in commercial litigation, you may wish to contact our office and make an appointment to see one of our solicitors in our Sydney office. 

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