Operating a business can be daunting, especially if you don’t know typical legal hazards that can threaten your enterprise. 90% of companies get sued at some point in their lifespan. About 12 million contract lawsuits are filed against small businesses annually. Sudden lawsuit confrontations or investigations can put a damper on your business activities. The risks of reputational and financial damage can stem from poor knowledge or misconception about the application of the law to your company. Therefore, business owners have to take the necessary steps to protect their assets by being aware of litigation risks. Although several legal challenges can pose risks to businesses, there are the most common hazards to watch for.
- Contract breaches
Contract breaches are one of the most common legal cases businesses often have to deal with. A contract breach occurs when one party violates the terms and conditions of a deal or an agreement they have with another party. It can cause significant financial damages for the party that feels wronged. A few issues that may lead to a breach of contract include failure to deliver goods and services, make payments, or meet deadlines. Therefore, companies must strive to obey contracts and ensure they are clear and concise. Some contracts are too complicated for the average business owner to fully understand. Getting a law firm to review such contracts before you sign them can help avoid costly legal disputes in the future.
- Intellectual property infringement
Intellectual properties are intangible assets with value, such as trademarks, copyright, logos, and trade secrets. Safeguarding intellectual property is essential for business success. You risk facing a massive lawsuit if your business steals the patented inventions of another company. Businesses may want to consider signing confidentiality agreements with employees to discourage them from sharing their trade secrets with other companies.
- White-collar offenses
White-collar offenses include fraud, embezzlement, government procurement fraud, and bribery and corruption. These complex offenses carry substantial stiff penalty risks for businesses and individuals. Luckily, hiring the services of white-collar criminal defense law firms such as the Federal Criminal Practice Group can help protect your rights if you are accused. White-collar cases are document-intensive and involve financial information. However, a lawyer who possesses the skills and experience necessary for mounting a strong defense against such issues can be a lifesaver.
- Defamation
Making untrue statements about another person, brand, or company can have negative repercussions. Businesses must be cautious when making advertisements that compare their products to competitors. You can avoid defamation lawsuits relating to ads by stating the benefits of your products rather than attacking direct competitors. Comparative advertising laws vary from region to region. So, know your local rules and state your point without tearing down another company.
Managing litigation risks in business is as easy as understanding that they exist. Having a lawyer in your team can help you stay on top of your legal risks. In addition to this, the tips discussed above will give you the desired outcome, so keep this in mind.