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Is your business ready for a lawsuit?

Like many business owners, you are proud of what you have accomplished and have hopes of even more success in the future. This is why you devote as much time as necessary to risk management. You carefully train your employees, carry adequate liability insurance and stay current with the laws affecting your industry.

Nevertheless, a perennial problem for business owners is the lawsuit. Dealing with people, their money and their rights leaves you open to disputes, some of which you may not be able to resolve over a cup of coffee. It is important to be aware of the most common lawsuits business owners face. This may help you avoid situations leading to such costly disputes and allow you to be proactive if they should arise.

Common legal actions businesses face

Lawsuits cost a business time and money. They may slow down productivity and damage the trust of your customers and employees. You can avoid many misunderstandings using solid contracts, but contract disputes are one of the most common reasons why business owners end up in court. A vendor or client may accuse you of failing to uphold a service agreement, or you may have an employee who violates the non-disclosure clause in his or her contract.

Other lawsuits businesses face include the following:

  • Another company or individual accuses you of infringing on their intellectual property rights. This could be through the unintentional use of a similar logo or outright plagiarism or patent infringement. On the other hand, you have the right to take legal action against someone who steals your intellectual property.
  • An employee may accuse you of discrimination, harassment or retaliation. There are so many laws protecting the rights of employees and potential employees that it would behoove you to have a firm understanding of the ones for Texas. Frequent training for your staff and thorough employee files can help you defend against unfounded accusations.
  • Clients may accuse you of committing fraud by intentionally misleading them. This may be through your advertising, verbal agreements or the failure to deliver on the terms of your contract. Fraud implies that your actions were deliberate.

It is possible to run a business without ever facing a lawsuit. It requires diligence in your behavior toward your staff and customers, in considering every word you post or publish, and in carefully screening and training your employees. You can also take advantage of the advice of legal counsel who can assist you in understanding the ways you can protect yourself from the damages a lawsuit can cause.

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Sergi & Associates, P.C.
329 South Guadalupe Street
San Marcos, TX 78666

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