Those who own a business long enough will likely find themselves facing potential business litigation. The reasons can be a vendor who does not honor a contract, a disagreement with a partner, a client who is unhappy with their services or products, or a dispute with local or state municipal authorities.
Litigation is often something the owner wants to avoid because it can be expensive, it takes time, and it takes focus away from running the business. Nonetheless, owners need to be smart about business litigation to avoid costly mistakes that can hurt their company further down the line.
Evaluating the options
Ignoring a business problem seldom makes it go away, so it often best to be proactive in evaluating the situation before making any decisions:
- Cost vs. benefits: Depending upon the issue, it may make sense to resolve a business outside of court using a type of arbitration outlined in a contract or mediating the dispute. These options are less expensive than court, yet they may still get similar results.
- Documentation: Every well-run business needs to keep detailed records of all agreements and business deals. Referring to the contract may provide insight for resolving the matter. It is also crucial to keep records of correspondence with the parties involved in the dispute. This can strengthen a case.
- Do not make it personal: Regardless of how the other side acts, being emotional or stubborn about a dispute can be counterproductive and may end up costing the client more money.
- Be careful about all communication: Attorney-client privilege means that anything said to an attorney is confidential, but the same cannot be said if a client says or does things witnessed by others before or during the dispute.
It is often best to work with an attorney
An attorney with experience handling business disputes can be extremely helpful regardless of whether a case goes to court. The attorney focuses on the matter, leaving the owner to focus on running their business. Moreover, their experience negotiating disputes and knowledge of the law can also serves the client well, perhaps resolving the dispute before ever appearing before a judge. Of course, they can also represent clients when court is the best option for effectively resolving the dispute.