Commercial litigation is a very broad term, essentially meaning any legal procedure that seeks to resolve a business-related problem. It could be an issue between a business and its customer(s), vendors, competitors, other businesses, or even government entities.

In today’s litigious environment, when lawsuits seem a first rather than last resort for working out disagreements, it is essential that a business have good legal representation. However, there are things that every business can do to protect and prepare itself. These measures can reduce the chances of being sued in the first place, and also position a firm in the best possible way for attaining a just resolution, in or out of court.

The Basics

The first thing to know is the degree of your company’s legal exposure. That is, a company making hand lotion has a slightly different set of concerns than a company in the service industry, say, an accounting consultancy. The manufacturer of the lotion, for example, must have product liability insurance, and may be called on to demonstrate that the appropriate government agencies approved the product formula for human use.

The various areas in which business litigation can arise include, but are not limited to, the following:

• Contract disputes, including breach of contract • Tortious interference with contracts or business relationships • Uniform Commercial Code (UCC) disputes • Shareholder and partnership disputes • Breach of fiduciary duty cases • Disputes over corporate management and control • Business dissolutions • Employment disputes • Disputes over non-compete agreements • Franchise disputes • Antitrust and trade actions • Consumer fraud and consumer protection issues • Debt collection actions • Civil RICO (Racketeer Influenced and Corrupt Organization) actions

As a first line of defense, then, a company must employ thorough, well-documented filing systems. Keep every important document related to your business, in both electronic and hard-copy form, if possible.

Good Records and Paper Trails In addition to keeping good, accessible records, every business owner should understand that honesty really is the best policy – in fact, it’s the only policy. It should be self-evident, but one very important ingredient in company success is integrity. This means that your company and its employees should be transparent, honest and ethical at all times.

In addition to acting ethically, of course, it helps to have a record and paper trail of such honest dealings. Therefore, make it a point to save and archive all business correspondence, including internal communications such as e-mails, memos, meeting notes and so forth. Similarly, every single e-mail, receipt, letter or memorandum dealing with materials, manufacturing, customer credit, collections or anything else, from any department, needs to be saved.

It does you no good to retain complete records if you cannot lay your hands on what you need, when you need it. Therefore, make sure you have a workable file system, competent administrative employees, and secure storage both online and off. You should have at least one, if not two, complete computer backups, with one kept offsite along with a photocopied set of onsite hard copy documents.

Page 1 of 2 :: First | Last :: Prev | 1 2 | Next