How Your Business Can Prevent a Litigation Issue

Your company can prevent a litigation issue by following some simple, practical tips that will help you safeguard your position. Litigation takes a heavy toll on any business. It will take time away from your core business, and it has the potential for damaging your business reputation. Your employees may even experience a decline in their morale. The following tips will help you prevent a litigation issue. NM Law, APC can discuss these further as well as provide other tips on how to prevent a litigation issue.

1. Agreements should be put in writing. Agreements with partners, suppliers, customers and employees should be documented in a written agreement taking the form of a contract. However, an agreement or contract that is poorly drafted and does not accurately reflect the matters that have been agreed to, will likely be useless. An attorney who is experienced in creating all types of contracts should be retained to formalize all matters that have been agreed to between the parties. This is one of the best ways to prevent a litigation issue.

2. Make sure that the people you choose to do business with are the kinds of individuals and companies that you want to do business with. Do they have a reputation for initiating litigation? Do they fit into your business values and practices? Be aware that some employees may have a tendency to attract trouble, and these employees should be terminated.

3. Keep the communication open and ongoing. Many disputes arise from dissatisfaction with a missed cut-off date, or a price increase that has not been previously discussed. Discontent builds when a business does not return phone calls or emails promptly. Displaying obvious respect for employees and business clients and customers will help avoid the negative feelings that so often precedes litigation. Never take the other parties business for granted.

4. Read agreements and contracts frequently so you will always be aware of the terms you have agreed to. Many businesses do not see the need to do this, but the reality is that time can diminish the memory of what was agreed to, or some of the details that seem to be small matters can be important to the other parties. Litigation often arises from business actions that fall short of complying with the provisions of the agreement or the contract.

5. Don’t let small problems become big problems. Take swift action to deal with any glitch or complaint before it rises to the level of a serious dispute that could bring about litigation. Encourage your employees to tell you about any potential problems that they may see. They are on the front lines and they will likely be the first to know if an issue is about to turn into a serious matter.

6. Include provisions in an agreement or a contract for mandatory mediation if a dispute arises that cannot be solved by a good discussion of the problem and then proposing a resolution. This will often prevent a litigation issue.

Disclaimer: This article is intended to provide a general summary of laws in the State of California and should not be construed as a legal opinion nor a complete legal analysis of the subject matter. Noelle Minto is an attorney at NM Law, APC in Tustin, California, a law firm specializing in Trusts & Estates and Business Transactions.

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