Small Business Owners: Tips to Help You Avoid a Lawsuit

March 21, 2012

We live in a country where lawsuits aren’t hard to find; and they financially drain small businesses, regardless of whether or not a business is guilty or not.  As such, small business owners should take every precaution they can to avoid any legal confrontation because just one could mean the end of their business.  Here are a few ways to go about avoiding them.

Be Cautious of Copyright, Patent, & Trademark Infringements

When establishing your company’s name and logo, do research on whether someone else has copyrighted or patented either.  The same goes as far as trademarking any of your products or services.  Then have an attorney double-check that you won’t be guilty of infringement.

Draft and Sign Attorney-Reviewed Contracts

When entering into an agreement with another person or company, always draft a written contract that specifies what the agreement will entail, each party’s responsibilities in that agreement, and what should happen if a party doesn’t uphold that agreement; also include a liability waiver if applicable.  Next, have an attorney review the agreement; once it is complete, have every party in the agreement sign it.

Know Where You Are Susceptible to Lawsuit

Do not let a lawsuit sneak up on you.  Know which areas of your business are susceptible to lawsuit, take preventative measures, and implement a plan for lawsuits that could arise from those volatile areas.  For instance, if you own a trucking company and know your employees may sustain injuries as a result of driving or moving heavy equipment, the last thing you want is to get a call finding that an injured employee has hired a personal injury attorney.  Provide employees with protective clothing and safety training.  If you own a business that requires certain environmental conditions to complete work, include a liability clause in your contracts that states that you cannot be held responsible for delayed completion dates given poor weather conditions. 

Take Complaints Seriously

Those who file suit against a business do not always do so purely out of the pursuit of financial gains or compensation; many also file suits when they feel they’ve been treated disrespectfully or been taken advantage of.  Therefore, it is imperative that you not only treat both customers and those outside parties you work with respectfully, but that you listen to even the smallest of complaints and react to them appropriately.  This isn’t to say that you should allow those around you to walk all over you, but being courteous to others will not only protect you from lawsuits, but will help you run a good business. 

You should also know when to say when, even if you are right.  Attorney and court costs are very expensive, especially for small business owners, and many times it will be easier and financially responsible to give someone what they want. 

This guest post is brought to us by Sara Witt, a guest blogger and writer.  Horrified by the way some attorneys hoodwink citizens in need of council, Sara set out to provide laypersons with a resource to help them with the legal process.  As such, Sara provides citizens with educational articles detailing everything from how to deal with a personal injury case to what to look for when researching car accident attorneys.

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