Learn more about what an injunction is in business.
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An injunction is a court order that commands a person to either do or refrain from doing a specific act. Unlike damages — which compensate parties for past acts — injunctions attempt to prevent future harm from occurring. There are several kinds of injunctions that business owners should be familiar with. Failing to comply with an injunction could increase your business’s legal liability. So take a few moments to learn about the definition of injunction. We’ll also review an injunction’s benefits and tradeoffs.
According to Merriam-Webster’s online dictionary, the definition of “injunction” is “a writ granted by a court of equity whereby one is required to do or to refrain from doing a specified act.” Another injunction definition is “an official order given by a court that demands that something must or must not be done.” Because there are different types of injunctions, however, “injunction” can have several meanings depending on the situation.
There are three main types of injunctions: temporary restraining orders, preliminary injunctions, and permanent injunctions.
A temporary restraining order (TRO) is a short-term injunction that serves as a stopgap measure while the court prepares a more lasting action. Courts can enact temporary restraining orders with relatively little legal process or notice, but TROs cannot last more than a week or two.
Preliminary injunctions are more lasting than TROs. To impose a preliminary injunction, a court must typically have a proceeding of some kind and give notice to the opposing party. In federal court, a party that seeks to have a temporary injunction must show that they are likely to prevail in their case. They need to also demonstrate that they’ll suffer “irreparable injury” without the injunction that is more severe than whatever injury the injunction will inflict on the other party.
Finally, there are permanent injunctions. As you might imagine, it is most difficult for a party to obtain a permanent injunction. In federal court, the requesting party must prove several specific factors.
As an equitable remedy, injunctions have both advantages and disadvantages. A small business owner should take a moment to understand these traits in the event they find themselves in a legal dispute.
An injunction’s primary advantage is its flexibility. Because it can be temporary or permanent, it can be useful in several different situations. Unlike other remedies (like monetary damages), courts can also rescind injunctions according to changing circumstances. Finally, because it is a form of equitable relief, injunctions can be used more freely by courts than a legal remedy (i.e. monetary damages).
Using an injunction carries disadvantages as well. For one, courts generally use injunctions only to prevent a party from doing something. Aside from specific performance, where a court forces a party to fulfill a contractual obligation, it is more difficult to use an injunction to force another party to do something. Also, parties may have only a limited amount of time to petition the court for an injunction. And it can be difficult to successfully obtain an injunction, especially a permanent injunction.
Injunctions are a remedy used by courts to prevent a party from doing some act. Depending on the situation, injunctions can be temporary or permanent.
If you find yourself in a legal dispute, you may have to propose (or defend against) an injunction. Therefore, it’s important to understand what injunctions are. However, there are many other tasks that can occupy your attention as a business owner. Filing the right paperwork to form a business, update your business structure, or obtain necessary permits can be overwhelming.
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Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.