As a business owner, you will need to invest a significant amount of time in ensuring that transactions and relationships are running smoothly. If you do not do this effectively, you may find yourself in costly disputes and even subject to legal claims.
In order to avoid business disputes, you should take the time to understand the nature of some of the most common issues that businesses encounter. By doing so, you will have a better idea of how to put procedures in place to avoid these costly disputes.
Avoiding disputes with shareholders
Shareholders should be an asset to your business, helping to finance and guide your business in the right direction. When shareholders disagree with management on key business decisions, disputes can arise. These types of disputes are inevitable, but the way they are handled can have a huge impact on how they can be resolved. A clear shareholder agreement on voting procedures and rights will help a democratic process to be executed within the business.
Avoiding contractual disputes
Contracts should be written thoroughly and with an emphasis on clarity. This can help to avoid certain situations from being unaccounted for, and it helps to avoid misunderstandings. There should also be clauses within a contract to outline how contractual breaches and disputes should be dealt with. Many businesses decide to include arbitration clauses in their contractual agreements in an effort to avoid costly litigation.
Preventing professional negligence claims
If your business offers professional advice or support, you may be at risk of being subject to professional negligence claims. These claims can arise when another party accuses you of giving poor advice in an area of expertise. Mistakes in this regard can always happen, but protecting your business from legal action is important. Make sure that communication is always clear, and that any advice given is done so while acknowledging the risks. You should also ensure that all employees are only giving advice that they are qualified to give.
If you want to take further action to avoid costly litigation claims as a Texas business, it is important to understand the ways in which the law can work in your favor.