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4 lawsuits that may catch your small business off guard

Growing a small business is often an effective way to realize financial freedom. Further, if you have a brilliant idea, in-demand product or necessary service, your small business probably plays and important role in the community. Still, a lawsuit may bring your organization to a standstill. 

According to some estimates, more than 50% of small businesses are parties to litigation at any given time. Therefore, even if your company has managed to stay out of court until now, you probably cannot avoid a lawsuit forever. Here are four types of litigation that may sneak up on both you and your business.

1. Breach of contract 

In an effort to meet customer demands, your small business likely works with suppliers, vendors and others. To ensure all parties have a meeting of the minds, you may execute contracts either frequently or occasionally. Of course, if your small business does not live up to its end of the bargain, you may face a breach of contract suit. 

2. Torts 

Torts are wrongful actions that may expose your company to civil liability. For example, if someone slips and falls at your place of business because you failed to repair a damaged section of sidewalk, he or she may sue your company to compensate for injuries. 

3. Employment discrimination 

As a small business owner, you likely have a variety of state and federal anti-discrimination laws you must follow. If you take adverse employment action against an employee or applicant for impermissible reasons, you may have to deal with both a governmental investigation and a lawsuit. 

4. Wage inaccuracies 

Like with anti-discrimination laws and regulations, there are some wage-related rules your small business must follow. For example, you likely must pay workers at least the minimum wage and comply with overtime rules. Skirting wage laws is often a fast way to land a company in legal hot water. 

It can be tough to be a small business owner these days. Fortunately, by understanding the common ways small business owners often find themselves inside a courtroom, you can better plan for avoiding a potentially costly lawsuit.

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