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How Can Commercial Transactions Go Wrong?

Every business relies on the ability to efficiently conduct transactions with its customers, without being impeded by unnecessary hurdles or concerns. And yet, any business that is not careful can find itself dealing with the consequences of a poorly thought out contract or some legal problem they did not foresee. Here are just some of the ways that commercial transactions can go wrong:

  • Language in a business contract is vague or unclear
    • One surprisingly common source of business litigation arises out of unclear or vague language in a business contract. This is an especially common issue when business people attempt to write their own contracts without legal counsel. When lawyers aid in commercial transactions, they will typically go over the critical terms to ensure there is no ambiguity and that potential disputes are preemptively addressed that may otherwise lead to a lawsuit.
  • Failure to disclose, or deliberately concealing, important information
    • For commercial transactions to be carried out efficiently, it is important that both sides of the transaction engage in good faith bargaining. However, sometimes one side will either fail to disclose something they should have, or deliberately conceal critical information. Often, this is done to help secure a deal they might not have gotten if they were honest, or to get a better deal than they should have. It is critical that a contract protect your business’ interests in the event you later discover that the other party concealed or misrepresented material information, particularly if that concealment or misrepresentation causes damage to your business or to a third party.
  • Alleged breach of contract
    • Another potential issue that can arise in commercial transactions is if one or both sides are alleged to have breached the contract. This can happen for a number of reasons, both intentional and accidental, but whenever it happens, it can lead to trouble. Fortunately, many such breaches can be cured without the need to engage in litigation, provided both sides are acting in good faith. Parties acting in good faith should agree to contract terms that provide for a reasonable cure period so that the entire business relationship is not lost due to one fixable mistake or circumstances that may be beyond either side’s control.
  • Alleged theft or misuse of intellectual property
    • Many commercial transactions involve deals over the use of intellectual property, including trademarks, copyrights, and patents. Whenever a business uses someone else’s intellectual property, there is always the risk they will exceed the bounds of their licensing agreement, or that they will steal information from that intellectual property for themselves. When this happens, it may lead to serious litigation, as the intellectual property holder works to protect their rights. A properly drafted contract provides the best protection for your business’ intellectual property, and also sets clear limits for you and your business to follow for utilizing someone else’s intellectual property.
  • Failure to uphold guarantees or warranties
    • Even the most basic business contracts typically include certain warranties or guarantees, some of which are explicit and others which are implied by common law. This includes things like the implied warranty of merchantability, the warranty of fitness for a particular purpose, and any other express warranties listed in the contract. Anyone who fails to uphold these warranties can find themselves the subject of litigation.


The Law Offices of Hunziker, Jones & Sweeney routinely handle business law matters for New Jersey business owners, whether for a small start-up, a mid-sized company, or a large corporation. Whether the matter concerns the drafting of a simple agreement, or instead involves a more complex transaction involving multiple parties or facets, the firm can assist. Contact the firm for a consultation at (973) 256-0456 or fill out our contact form for a consultation.

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