6 Actions that Help Avoid Lawsuits

One of the most important goals in drafting a contract is to lessen the risk of your business being sued or having to sue another party. Another important goal is to safeguard your position if litigation should become necessary. Below are a few things to consider:

Investigate the other party

It is always a good idea to conduct due diligence on the party you are entering into a contract with. This may be as simple as an Internet search or obtaining referrals from other parties that have had agreements with the party.

Get your agreements in writing

Putting things in writing is one of the most effective ways to protect you. Whether it is a contract with a vendor, supplier, employer, or business partner, a contract that clearly outlines the agreement can prevent the need for litigation. In contrast, if the contract is poorly drafted and leaves questions as to what the actual agreement is between the parties, then litigation is likely. It should also be noted that if you don’t have a contract in place, verbal agreements should at a minimum be documented with a follow-up note or email.

Read and understand the contract

It is essential to not only carefully read every agreement, but also to ensure you understand the terms and how they will apply to your daily operations. Knowing and understanding what your agreement provides can help you recognize when things are going downhill. Addressing problems as soon as they start to occur can keep them from evolving into nasty disputes.

Communication and action

If you keep your clients informed about what is going on, it can help prevent litigation. In other words, if they are aware of price increases or scheduling conflicts as they occur, they are more likely to understand when you miss a deadline. That being said, as soon as you encounter an issue, take action to correct it and giving your attorney a heads-up is a good idea too.

To ensure that your contract provides you with the most protection from liability available, contact Leslie S. Marell to schedule an appointment. Our office is located in Torrance, California, but we proudly serve businesses of all sizes from all over the country.