Today our nation has more laws and government regulations then ever. From age discrimination to sex harassment, accommodating workers with disabilities to unfair competition, every business faces legal threats no one ever dreamed of a generation ago. These are in addition to age old legal risks from accidents, unhappy customers and contracts.
As legal risks and the potential for lawsuits increase, so does the need for business owners to take steps to control these risks. Here are areas where taking a few easy measures can help business owners avoid lawsuits and increase their chances of success in the event a lawsuit does occur.
Review Contracts Before Signing
Many business owners lose money or get embroiled in lawsuits by not reading contracts before signing them or not having them reviewed by their lawyer. It’s almost always best to have your lawyer review a contract before you sign it, especially important ones like leases and loan agreements. This alerts you to provisions you may be unaware of but which can cause disputes later. It also helps you include terms that will benefit you in the event of problems, such as provisions to limit your liability. If you cannot have a lawyer review a contract, be sure to read it carefully before signing. If you are unsure about anything, seek legal help.
Handle Customer Complaints Properly
Have a system to handle customer complaints so they do not become serious disputes and eventually lawsuits. Your system should include at least the following key points:
• complaints should be handled by someone with authority to solve the problem. Hearing that a problem must be repeated to someone else usually makes a customer even more upset.
• keep written notes of all discussions about the problem. This will help if the matter becomes a legal problem.
• try to reach a prompt solution, even if it involves some expense. This builds goodwill. Also, the cost of solving a problem early is usually less than the cost of legal proceedings.
Keep Your Premises Safe
Personal injury lawsuits involving customers injured on the premises of a business are very common.
To reduce the risk of personal injury claims, make sure walkways and stairways have adequate lighting, and that tripping hazards are fixed, such as loose stairs, torn carpet and other dangers.
Along with these suggestions, it’s also wise to conduct regular inspections to make sure your entire premises are safe, including the work area, customer area and parking lot. In most states, if someone is injured on your business premises you can be held liable not only if you knew about a danger and did not fix it, but also if you should have known about it.
Research Your Business's Name
Many businesses are surprised when a competitor asks them to change their business name, saying they've been using a similar name for years. Disputes over business names can quickly evolve into expensive and time-consuming lawsuits. To help prevent disputes over business names, have a trademark search conducted to ensure your business name is okay to use, and then have it trademarked to prevent others from using it.
Reduce The Risk of Lawsuits Between Owners of the Business
Many business lawsuits are between the owners of the business themselves. They may disagree over the direction of the business, or want to buy out the other's interest. Having a buy-sell agreement, which is an agreement between the owners of the business stating what happens if an owner dies or wants to sell his or her interest, can make for a smooth transfer of interest between feuding co-owners and avoid a lawsuit.
Raising Money
Disputes involving people who invest money in the business are common. Businesses can run afoul of securities laws when raising money, and this can lead to legal trouble. To help avoid legal problems, see legal assistance when your business raises funds (including from friends and relatives) to assure that all securities and other laws are followed.
Protect Yourself In Case of Disputes With Suppliers
Problems can arise from dealings with suppliers, such as burdensome payment terms or getting poor quality products or services. A good supply or purchase contract tailored to your business helps protect you when buying goods or services, including by making sure there are proper warranties. It can also help you in the event of claims arising from these goods or services. For example, asking your suppliers to agree in writing to indemnify you for claims relating to the goods or services they provide can give you a significant amount of protection.
Keep Sales Materials Accurate
Trying to increase sales sometimes leads to promotional materials promising more than you can deliver. Check all written materials your business produces. Re-examine your sales presentations. Make sure all statements — written and oral — are true, and that promises can be kept. In one case, the seller of a product was sued for misrepresentations in its sales brochure. A court ruled for the buyer even though he admitted he did not rely on the brochure before buying.
Use Care In Hiring Employees
Employment-related disputes are the most common kind of legal dispute faced by businesses. Whether it's a former employee who feels he or she was improperly terminated or a job applicant who claims discrimination, these are reminders to take steps to prevent problems. To reduce the risk of job-related lawsuits, consult a lawyer before terminating employees. Also, have employment documents like job applications, contracts and employee handbooks reviewed by a lawyer to reduce disputes from their contents.
Some lawsuits cannot be avoided. To minimize their cost, review your insurance policies to make sure they will help defend claims.
These are some of the areas that are most likely to be the source of lawsuits involving your business. Taking a few proactive steps in these areas can help prevent time consuming and expensive lawsuits. Having proper insurance can reduce the cost of lawsuits that do occur.
Contact an attorney at DeMarco & Triscaro today. Please call us for all your legal needs. We offer a full range of legal services to individuals, families and businesses, including personal injury, estate planning, real estate, family law and business matters. We are dedicated to providing the highest quality legal services at a reasonable cost. |
