Starting a business, whether small or large, isn’t for everyone. Months or even years before deciding to leave your cushy job and start a business, you should’ve already planned how you’ll manage any risks that you might encounter along the way as you embark on a journey that can either make or break you. But one of the risks that even the most experienced business owner might still have a hard time dealing with is when someone files a lawsuit against them. Having to face business litigation might not have been listed in your agenda when you first started your business, so here are some tips that you can use to prevent that from happening to you:
- Draft typewritten copies of every contract that you make with anyone that has to do with your business in general.
When you first started your business, you might have had very little to no idea at all how contracts work that you believed a gentlemen’s agreement is more than enough to close a deal and get things going for both you and the other party involved in it.
- However, oral and handshake agreements usually hold very little water in court and won’t help you defend yourself from a lawsuit filed by the other party against your business.
- So regardless of how high or low the stakes are, you should set every business agreement between you and the other party in writing so that you both have something to look back to in case you might get into a dispute over some of the provisions in your contract.
- Get an attorney to review each contract that you’ve written.
You might have drafted a typewritten contract using any of the templates available on the Internet with only minor revisions on your end to make it look as if you didn’t rip most of it off online.
- However, the contract that you’ve whipped up might contain grammatical errors, or incorrect terms that can put you at a disadvantage should the other party point them out to you much later.
- Thus, you should hire a lawyer and let them review every contract that you write so that they can point out what you need to revise to make it look more business-like while keeping it grounded in language that’s easy to understand.
- Exercise caution when entering into deals with potential partners and clients.
One of the most common beginners’ mistakes that you might commit when starting a business is to place your trust in any potential partner or client who shows even the slightest amount of interest in what you do. When in doubt, you should do a background check on your potential partners and clients either on your own by checking their online presence or by hiring a private investigator to check on them.
According to a survey conducted in 2013 by Penn Schoen Berland and Public Opinion Strategies, more than 40 percent of small business owners reported themselves as either threatened with or facing litigation. And getting slapped with a lawsuit against your business can cause you to quit being an entrepreneur altogether. You wouldn’t want that to happen to you which is why the above-listed tips on how to prevent experiencing business litigation are there to help you. But in case you have no other choice but to deal with a lawsuit that your business is facing, you should contact a lawyer as soon as possible and discuss any legal actions you can take against whoever filed it against you.