But business ownership is part of the American dream. Although it is a way to make a living, it‘s also an opportunity to pursue a passion, carve out a niche, and help others. Like many life endeavors, it‘s not without its challenges and hardships.
Whenever possible, it‘s best to avoid legal issues by hiring a great Colorado business lawyer and taking proactive steps to reduce legal business risks. Understanding these top three most avoidable transaction litigation pitfalls can help businesses take these steps. A keen awareness of these vulnerabilities and how to avoid them can significantly decrease the risk of disputes and litigation.
- Failure to Document
All businesses should document and retain information about their transactions and other business dealings. Documentation in the form of a contract, agreement, or other signed paperwork is proof that something happened and that at least two parties agreed with each other. You should also retain future communications with parties involved in your dispute, including emails and other tangible documentation. If necessary, your trial attorney can use them as evidence during litigation.
Documentation is crucial to all transactional disputes. Your dispute could be over a lease agreement detailing how much rent the tenant should pay and when, as well as what happens if they don‘t pay rent. Disputes can arise when one party fails to perform as the agreement states they will. For example, when a supplier contracts to deliver a specific amount of goods by a specific date each month. Then they breach the contract by delivering late or delivering the wrong goods or wrong quantity of goods.
In any of these situations, you need first to prove the terms of the agreement. Then you need to show how the other party failed to meet those terms. If you don‘t retain and safely store your documents, it might come down to your word against theirs. Your claim will be more challenging to prove without documentation. By consulting with a seasoned business lawyer, you can ensure that you save critical documents that can protect your business in a transactional dispute down the road.
- Incomplete Contracts and Agreements
Ensuring that your contracts and agreements are complete is equally essential to protecting your business interest as saving documentation. When drafting and signing the contracts, don‘t just assume that you and the other party agree on specific terms. It is important that every detail of your agreement be on the document. You can‘t hold someone liable for breaching a contract if you don‘t have proof that they agreed to all its terms. Your rights to a remedy will be limited at best without proof.
Your contracts should be comprehensive and thorough. Go into specific details about what is required of each party, when it is required, and what happens if either party fails to adhere to the contract. With an attorney working on your behalf, you can be assured that your contracts will be complete and enforceable. In Colorado, business transactional disputes are often caused by or related to:
- Failure to pay
- Failure to perform to standards
- Delay in performance
- Leasing
- Construction endeavors
- Real estate sales
- Vendor contracts
- Partner disputes
- Software development
- Not Taking Disputes or Litigation Seriously
You should handle all transactional disputes with care. Don’t wait for the matter to be in litigation before you sit up and take notice. Most of the time, if you can deal with disputes when they first arise and are small, you have a much better chance of avoiding litigation. Selecting the right business lawyer will ensure that you make every attempt to put out these fires early on.
If you end up in litigation, cooperate with your trial attorney. Provide them with necessary documents, specific details, and even witnesses if needed. The future and success of your business can hinge on disputes and litigation and should be taken seriously.
Avoid Putting Your Business at Risk by Finding the Right Lawyer
Business law has grown incredibly complex, making it impossible for a business owner to run a business and be their own attorney.
Nearly every business owner will need to consult a lawyer at some point to safeguard the ongoing success of their enterprise. Isn‘t it better to hire a lawyer to help before you make innocent mistakes that land you in legal hot water?
Hiring an attorney who doesn‘t have a business law background isn‘t much better than representing yourself. You need an attorney who brings the knowledge and experience of business law to every aspect of your company. The right business lawyer will equip your business to be successful and help protect it from disputes and litigation.
