The 4 Most Common Causes of Business Litigation
When businesses fail to take charge of their legal issues, they open themselves up to lawsuits from other parties. Anything is possible, which is why it’s important for you to minimize risk in all aspects of your business. Take a moment to familiarize yourself with the most common sources of business-related litigation in order to start preparing your company for potential suits today.
Breach of ContractBusinesses use contracts all the time to define their relationships with business partners, contractors, vendors, and customers, which is what makes breach of contract such a common cause of business litigation. Your business uses contracts to outline its rights and responsibilities in relation to another party, and vice-versa. When one party reneges on its duties or breaches the terms of the contract—or when the contract is fundamentally poorly-written—the resulting dispute can often land both parties in court.
Employment DiscriminationMany employees and prospective hires file suit against businesses on allegations like discrimination, harassment, and wrongful termination. Federal anti-discrimination laws protect employees from mistreatment based on sex, race, religion, pregnancy, disabilities, age, and other factors. To avoid litigation, employers should educate themselves on discrimination law, implement a well-planned HR process, and keep thorough documentation of employee complaints.
Intellectual Property InfringementIntellectual property disputes are popular for one major reason: if you don’t take a proactive approach to protecting your IP, you could lose your rights to it altogether. Businesses must register their copyrights, trademarks, and patents—for example, your company logo or slogan—and aggressively go after parties that attempt to steal or copy their IP.
Negligence TortsNegligence claims can arise when a business owner or employee creates a set of circumstances that injures another person or damages another person’s property. For instance, let’s say a grocery store owner neglected to clean up a spill, which caused another person to slip and fall. If that person was injured, they could sue for damages to recover lost wages and medical bills. Negligence can also happen in a product liability context, which involves a defective product causing injury or illness.