Running a business in Texas comes with a unique set of potential legal challenges, including the potential for business litigation.
Understanding the most common types of business lawsuits can help you prepare and strive to protect your interests. Here are five frequent causes of business lawsuits.
Breach of contract
A common prelude to litigation is a breach of contract. They occur when one party fails to fulfill their obligations as outlined in a contract, leading to losses for the other party. Contracts should be clear and detailed to minimize the risk of disputes.
Product liability
If a business sells a product that harms a consumer, the owner can face a product liability lawsuit. These cases often involve defective products or inadequate warnings about potential dangers. Businesses should prioritize product safety and compliance with regulations to avoid such lawsuits.
Premises liability
These injury lawsuits can arise when someone suffers physical harm on business property, often due to unsafe conditions. Examples include slip-and-fall accidents, inadequate security or other physical hazards. Regular inspections and prompt repairs can help prevent these incidents.
Partnership disputes
Disagreements between business partners can lead to lawsuits, especially in closely held businesses. Such disputes may involve issues related to profit sharing, decision-making authority and breaches of fiduciary duty. Clear partnership agreements and open communication can help prevent conflicts.
Shareholder disputes
In corporations, disputes among shareholders may arise over issues such as dividend distribution, management decisions, and shareholder rights. A well-drafted shareholder agreement can help you address potential conflicts timely and provide a framework for resolving disputes.
Being aware of these potential issues and taking proactive measures can help business owners protect their interests and avoid costly legal battles. If litigation is unavoidable, experienced representation can provide additional protection.
