Dealing with business litigation is stressful for both parties. It can cost you a lot in time, money and trust. In hindsight, you may realize you could have taken measures that would have avoided a problem becoming a lawsuit.
How can you reduce the risk of business litigation?
- Well-written contracts: Many disputes come about because the contract terms were not clear enough. Perhaps you are a restaurant owner claiming against a supplier who failed to deliver on time, causing you to run out of an essential ingredient. If you had put a clause in your contract that stipulated financial penalties for late delivery, maybe your supplier would have prioritized delivering to you over another restaurant.
- Clear communication: Perhaps you were the supplier, unable to provide a restaurant owner with the ingredient they needed for the Christmas menu they had planned. If you had warned them ahead of time, they could have made alternative arrangements and avoided disappointing their customers.
- Tax problems: A good accountant can save you vast amounts of money. A bad one can cost you dearly. Have a system of checks to ensure you are not blindly trusting someone with your company’s financial health.
- Clear policies: As an employer, you might face a discrimination lawsuit from an employee. By laying out clear communication channels for employees to report harassment or discrimination, you increase the chance you solve any such incidents in-house rather than through litigation.
The laws related to running a business can be complicated. It is best to seek legal advice from a business attorney rather than trying to understand the rules and regulations alone. Failing to understand them can result in costly legal problems.