Three Common Types of Business Disputes and How to Avoid Them

Litigation is extremely expensive. If you can take steps now to avoid having a legal dispute in the future, that can save you thousands of dollars in legal fees, time and effort, and goodwill. Of course, it’s not always possible to anticipate a lawsuit, but there are a few very common types of business disputes that often lead to litigation. If you can avoid these, then you will significantly decrease the likelihood of getting sued.

  1. Breach of Contract Disputes

Contracts affect virtually every aspect of your business—purchases, sales, service agreements, leases, staffing, and so on. When a contract is breached (or a party does not fulfill their part of the deal), then litigation may result. The easiest way to avoid this type of dispute is to ensure that you understand and can follow all of the terms of the contract before you sign it, but sometimes circumstances change or another party’s action can put you in a precarious position.

To avoid the expense of litigation, you can take steps to protect yourself if there is a potential breach. For example, you may want to include a clause in the contract that requires all parties to enter mediation before filing a lawsuit or to use arbitration instead. Sometimes, even something as simple as stating that you will use a forum located near you (instead of across the country) can significantly cut down on potential costs.

  1. Partnership Disputes or Shareholder Litigation

Sometimes the most significant business disputes to affect a company takes place within its own walls. Partners or shareholders may disagree about how to run a business, how to value their share of a company, and about a variety of other issues. This type of dispute can disrupt a company to the point where it can no longer operate in some situations.

The best way to prevent this type of dispute is to create a clear and comprehensive shareholder or partnership agreement. Addressing potential conflicts at the outset can save substantial time and money down the road.

  1. Personal Injury or Product Liability Claims

Litigation also can arise when customers or clients are injured on your property because of your products or due to the conduct of your employees. In those situations, they can assert a personal injury claim against your company, which can be very expensive to defend.

Unfortunately, you simply cannot prevent this type of litigation in some cases. However, ensuring that all of your workers have proper training, that you are using appropriate quality control measures, and that safety is a priority for your business can go a long way. Having the appropriate amount of insurance to cover issues like these is also very important.

If you want help recognizing and avoiding potential business risks, Integrated General Counsel is a great resource. Contact us today to learn more.

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Written by Integrated General Counsel

Our focus includes handling a variety of corporate matters and also includes litigation in state and federal courts. Our current practice includes providing transactional services and representing a variety of small and medium-sized companies as their outsourced general counsel.