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Preparing for litigation as a small-business owner

On Behalf of | Sep 5, 2023 | Business Litigation |

Lawsuits may seem exclusive to major corporations, but the reality is that small businesses are not immune to litigation. No matter what type of company you have, the financial consequences of business litigation can be devastating. If your business faces potential legal issues, taking proactive steps to prepare will be crucial for its future.

Common reasons small businesses are sued

Many small-business lawsuits stem from disgruntled employees, vendors or customers. If your small business fails to fulfill its contractual obligations in any way, you could potentially face a breach of contract lawsuit. This could include issues such as failure to deliver goods or services as promised, late or missed payments, billing errors or other violations of the terms of the agreement.

Employment disputes may also arise if your staff believes they are not fairly compensated or are suffering discrimination at work. Additionally, unsatisfied customers who receive defective products or suffer an injury at your place of business may also lead to lawsuits.

Such issues can damage your business’s reputation and result in financial losses. To minimize negative impact, professionalism in all aspects is a must.

Handling a small-business lawsuit

Businesses that are under litigation are heavily scrutinized by their lenders, vendors, customers and employees. Here are two major steps to take when facing legal troubles:

  1. Review your case with legal counsel: Big corporations often have in-house counsel who can help them mitigate any legal issues quickly, but this is not often the case for small businesses. If you don’t already have a legal team (in-house or outside), consider retaining a lawyer immediately.

A business litigation attorney can help you prepare for litigation by providing advice on how to conduct yourself, helping you gather evidence and building a compelling defense.

  1. Be careful with what you say: The other party could take anything you say, write or do against you. When facing legal issues, it is wise to keep interactions with the other party to a minimum. The other party may be baiting you to acquire more information or strengthen their case. If necessary, let your attorney speak for you.

Facing litigation can be daunting, but it’s essential to keep a level head and be prepared. Approaching the situation with caution and support from professional legal counsel may help small-business owners save their businesses from suffering financial and reputational harm.