5 Common Causes of Business Litigation

Business owners in the U.S have to fulfill a number of legal requirements and comply with a set of operating standards to prevent turmoil. Regardless of the business type, size, and scale, you cannot escape legal liabilities; though you can safeguard your company by working closely with a lawyer who specializes in local Business Law. Believe it or not, but business litigation costs the U.S economy more than a hundred billion dollars per annum. Many gigantic corporations and small family businesses are sued by employees, customers, partners, or clients over something that initially appears to be insignificant.

A fitting example is the McDonald’s Hot Coffee case, where a 79 year old woman from New Mexico, named Stella Liebeck, sued the fast food franchise after receiving third degree burns from exceptionally hot coffee. The woman initially demanded $20,000 for the incurred damages, but was not offered more than $800. The case went to trial and the court suggested that the victim be paid $2.9 million as compensation; Liebeck later settled for around $600,000.

Business Litigation Attorney in New York discusses 5 common causes of business litigation:

1. Product or Premises Liability

The product or services you sell are the foundation of your business. If your product does not function as intended, the customer is entitled to sue you for whatever threat or damage it instigates. Everything you manufacture and market should be thoroughly tested/audited to establish quality control. The premises of your company or operating grounds should maintain a safe environment for employees and visitors. If someone gets injured on your property, you can expect to be held responsible to pay for their pain, loss, and suffering.

2. Breach of Contract

A contract refers to a document or paperwork that institutes strict terms and provisions for a professional relationship/partnership between two parties. Any contract you sign with an employee, client/customer, or business associate is binding. If your actions defy the clauses of a legitimate contract, the other party can initiate a lawsuit on the basis of ‘breach of contract’. If failure to abide by the contract was a mistake or error, try to make things right immediately. Negotiate with the plaintiff to reach a settlement outside court. Strive to avoid litigation, since it is a grueling and expensive affair.

3. Real Estate Disputes

Your business may encounter legal disputes with regard to real estate that is rented, mortgaged, or purchased. For instance, you may have acquired a cheap property to later discover that it is foreclosed, or the previous tenants have an automatic stay. If your work includes frequent investment and sale of real estate, the involvement of a lawyer is recommended in all transactions. Contested property and fraudulent real estate agents can lead to massive financial loss.

4. Discrimination Lawsuits

Employees, customers, clients, business partners, and anyone else you work with should receive the same level of respect. If you treat someone differently with regard to their age, gender, color, ethnicity, religion, sexual orientation, social status, disability, marital status, or some other physical characteristic, you are guilty of exercising discrimination. Your business policies and work ethic must not offend anyone you deal with, or you may face dire legal consequences.

5. Intellectual Property Conflicts In this modern era, intellectual property has become increasingly invaluable for businesses. Given that the use of digital resources has elevated drastically in the past few decades, theft of creative ideas, concepts, and inventions has become all the more mainstream. Many individuals and companies are unlawfully utilizing trademarks, patents, and copyrights that belong to someone else. Protecting intellectual property from third parties and maintaining individuality may implicate complications.

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