6 Common Sense Tips to Avoid Litigation in Business

avoid-litigation-in-business

Litigation is every business’s worst nightmare. Legal Advice will tell you that not only is it time consuming and expensive, the trauma of it all can cause you to feel ill and affect your ability to make good business decisions, so business growth will be hindered. It can also affect employee morale and the reputation of your business. That can cause a lot of loss and take years to recover from.

So how do you avoid litigation? Here are some common sense tips to help you.

  1. Every agreement you have with anyone to do with the business should be put into writing. Both parties should read and sign the agreement – in fact, a legal agreement should be drawn up by lawyers. Such agreements can be between suppliers, customers, business partners and employees. Without an agreement the terms discussed and agreed on can easily be forgotten or deliberately not adhered to and you have no way of forcing the issue.
  2. As a business owner it is up to you to read all the agreements and ensure that the terms are adhered to by all parties. If you don’t know what these terms are, you won’t know whether they are being kept or not. You can easily be ripped off by a less than honest party who knows you haven’t read the terms of an agreement.
  3. Keeping customers, suppliers and clients in the loop as to what is happening helps to prepare them for unexpected changes. If your machinery breakdown is going to make you late for supplying goods or equipment to your clients, shoot them an email to let them know what is happening and give a new date of supply. This is simple business courtesy. If you were in the same position you would want to know.
  4. Don’t ignore a glitch or complaint. Get right onto it before it escalates out of control. Ignoring problems is no way to solve them. You can hope all you like that it will all go away without you doing anything, but this is highly unlikely. When the parties involved see you want to help them resolve the dispute immediately, they will be impressed with your attention to detail and more easily trust you to solve it for them. You’ll have happier people and avoid loss.
  5. Research before you do business with anyone. If you find out they are often embroiled in disputes, avoid them. Some people are just difficult to do business with; others do it on purpose hoping to get a payout of some kind.
  6. When a dispute comes up, put yourself in the other party’s shoes. There are usually good reasons for a dispute. If you can work out what the other party’s motivation is, you’ll be halfway to resolution without litigation.