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Legal Challenges Small Businesses Should Prep For


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Running a small business is no easy task. Among its most significant challenges is the liability associated with ownership. Unlike large corporations, small businesses and their owners can face serious consequences when faced with lawsuits.

Small businesses can be sued for several reasons, but the most common instances stem from disgruntled employees, threatened competitors, upset customers, and troublesome suppliers. To deal with these situations head-on, or even proactively, business owners need to seek legal consultation. You may need a lawyer to fight these common claims:

Employee Accidents or Injuries

Accidents are always possible and put employers in difficult positions. Regardless of the business owners’ intentions, an injury on the job often leads to a lawsuit or workers compensation dispute. Several steps are taken to be proactive against these claims, including maintaining and enforcing proper safety measures and appropriate workers compensation arrangements, but they are not seamless.

Employee Grievances

Just like any business, small business owners must make decisions that impact the company and its employees. These choices can quickly become personal if an employee is upset or feels that they have been mistreated. When a decision is made, employers must also prepare for the worst, including:

  • Discrimination
  • Harassment
  • Wrongful termination, and
  • Unfair pay

Employers should constantly assess the risks and benefits of their choices, but attorneys can give them the support to protect themselves and their company if needed.

Partnership Disagreements

Entering a partnership can bring significant benefits to your business, but it could also cause trouble when an issue or dispute arises over assets, power, decisions, or even unrelated misunderstandings. Failed partnerships can lead to a number of problems, including:

  • A breach in a partnership agreement
  • A violation of a non-compete agreement
  • A violation of a compete for disclosure clause
  • A disagreement regarding compensation

With the business at stake, disagreements between partners could seriously threaten a small business. They can also be tough to predict. Small business owners should acknowledge the risk early on to avoid the consequences.

Breach of Contract

Lastly, a small business may be threatened by a breach or violation of a contract. A violation could present itself in many ways and can apply to written or oral agreements, making it essential for employers to understand. Breaches that affect business owners include:

  • Anticipatory Breaches, which occur when a party claims they will break the contract
  • Minor Breaches, which happen when the party fails to fulfill a part of the obligation but still completes the deliverable
  • Material Breaches, which occur when a party fails to perform or deliver its obligations, and
  • Actual Breaches, which happens when a party commits the violation and does not adhere to the terms of the contract

This process begins when the second two parties enter into a contract. Business owners need to make thoughtful decisions. Even with the business and its employees’ best interest in mind, issues and disputes can arise. It’s impossible to foresee every event; however, taking the proper steps to help prevent and protect your company can save time and money when facing legal challenges.

“While you cannot predict injuries or disagreements,” Attorney Jonathan Sparks says, “you can take steps to protect yourself and your company from them.” Finding a lawyer is the best way to help prevent contract breaches, employee disputes, and partnership disagreements.

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