If you run a small business, you know just how tight profit margins can be. Spending money on legal fees or lawsuits is never desirable. No small business owner or operator wants to deal with those legal costs being added into the annual budget.
Unfortunately, the risk of lawsuits is something that small business owners are forced to deal with in our current economic and legal climate. In fact, according to the U.S. Chamber of Commerce, nearly half of all small business owners report that they have been threatened with a civil lawsuit.
Knowing this reality, as a small business owner, you should be prepared to respond to any threats of legal action.
Here are three common lawsuits facing small businesses and what can be done about them:
Many small businesses end up in legal disputes over the terms of contracts. Whether the contract in question was between your business and another company or with a current or former employee, your company will need legal protection.
In some cases, contract disputes can drag on for years and do damage to the underlying financial interests of both parties.
If your small business is involved in a contract dispute, it is important that you seek assistance from an experienced contract law attorney who can protect the rights and interests of your company while also seeking a quick and cost-effective solution.
Small businesses also must be ready for the possibility that they will be facing a tort claim. These claims often come from a customer or prospective customer. Generally, they are based around the idea that your business was negligent, and the other party suffered damage as a result.
For example, if a customer slips and falls on your property, he or she may take civil legal action against your business. Alternatively, you company may face a negligence claim if a customer feels that he or she suffered damage because of some type of defect with your product or services.
If you face a tort claim, it is imperative that you consult with an attorney who can help you to assess your situation and can determine what needs to be done in order to protect your company.
Employment Law Disputes
Finally, small businesses can face civil legal action from current or former employees.
Small business owners often develop close relationships with their employees, so these types of disputes can be particularly painful and frustrating. This is especially so if your former or current employee alleges that you have done something wrong.
Employment lawsuits involve everything from claims of discrimination or labor law violations to sexual harassment allegations. Your business must take these claims seriously as they can carry serious financial and reputational repercussions for your business.
Ultimately, the best way to handle employment litigation is to take proactive steps to reduce the risk of a lawsuit in the first place.
Of course, even if your company does everything right, a lawsuit could still arise. If your small business is sued by an employee, you should seek immediate legal assistance.