Avoiding a Business Foul: Practical Steps to Dodge Business Litigation
The best litigation for business decision makers is the litigation that never happens. Court cases are time-consuming, expensive and take a business owner’s mind off business. The best way to avoid litigation? Document everything, know your obligations and be certain your protections are in place.
“It sounds a little simplistic, but I would say, know your legal obligations, comply with them, and most important, create documentation of your compliance,” said Lee Roberts of Weinberg, Wheeler, Hudgins, Gunn & Dial.
“Most litigation arises out of the business disputes with a party you’re doing business with, and it’s almost always about money,” said Roberts.
Step one in keeping a business out of litigation is to make certain the rights and obligations of both sides of a deal are documented. Whether with a formal contract created by a lawyer or a memo of understanding, or even a letter sent to the other side, it’s important there be some form of written documentation.
“Most disputes arise, in my view, from factual disagreements between two parties who want different things, or who believe that they’re entitled to some performance that the other side never expected to provide,” said Roberts.
“Keep and maintain comprehensive documents,” said Aviva Gordon, Gordon Law. “Plenty of businesses, local in particular, have been successful for a very long time and have followed the term of ‘a person’s word is their bond.’ Unfortunately that doesn’t always hold true and documentation is always the best way to go.”
Beyond documentation is understanding. Pat Lundvall of McDonald Carano, suggests business owners perform an internal audit, and hire competent counsel that will learn the business and evaluate the protections in place. Review employee handbooks and training of all kinds – safety, sexual harassment – and perform the reviews before there’s any threat of litigation.
“Every business-based threat, how do you protect yourself against those threats? As with any form of protection, the first line of defense is prevention,” said Lundvall. Business owners should ensure they’re covered by every type of protection specific to their business, whether that’s insurance or contractual documents or some other protection.
“Having an audit done is just sound business advice,” Lundvall added.
Nevada Business.com
March 1, 2017
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McDonald Carano has been shaping Nevada’s legal, business, and policy landscape since our founding in 1949. With more than 60 lawyers and government affairs professionals working from offices in Reno, Las Vegas, and Carson City, we are Nevada’s law firm for business. Our local, national and international clients include Fortune 500 corporations, fast-growth and mid-market companies, entrepreneurs and startups, non-profit organizations, government entities, and high-net-worth individuals. Our attorneys deliver cross-discipline, one-stop, business law and government affairs counsel. Please visit mcdonaldcarano.com
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