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Ways to avoid business lawsuits and disputes

Many lawsuits can be prevented. The odds of business litigation may be reduced with certain strategies.

Act early

Minor grievances among management and partners may grow into major disputes. Dividing equity, business goals, and assigning responsibility are among the issues that should be settled early before their complexity and consequences increase.

Written documents

Handshake agreements or off-the-record deals are inadequate. All business dealings should be carefully documented to avoid and resolve business disputes and discourage lawsuits.

Solid data is important. Keep records of emails, contracts and agreements, loan documentation, proof of payment, accounting data, calendars and meeting minutes and agendas.


Fairness, honesty, and ethics can help avoid resentment and legal disputes and should govern all practices and policies and dealings with partners, employees, shareholders, clients, and customers. This includes negotiation and enforcement of contracts and communications with partners, employees, and customers.

Internal policies and procedures must strictly comply with laws and standards applicable to your business. These should be designed to treat all your organization’s board members, executives, employees, customers, and other stakeholders fairly.

Strong policies will help reduce the possibility of unethical, illegal, unfair, or careless behavior. These can also help eliminate disputes.

Intellectual property

Business needs to notify all employees and contractors that any creative content they produced is the business’ intellectual property. Seek their agreement to sign IP rights over to your business to avoid any confusion over IP ownership rights.

IP ownership should be clearly defined. To avoid misappropriation and disputes, trademarks and copyrighted materials need to be registered, and inventions should be patented. Trade secrets must be guarded.


Business typically enters contracts with employees, officers, vendors, licensees, and other parties. These should be carefully drafted and precisely address expected quality, duties and rights, performance, time periods, termination and dispute resolution and contingencies on the delivery and acceptance of goods and services.

Fiduciary duty

Business owners owe a fiduciary duty to their business, shareholders, and investors. These duties include care, loyalty and acting in the best interest of the business and its investors and shareholders.

Business policies and activity should reflect this duty. This can help avoid lawsuits and even regulatory problems.


Clear communication can help reduce disputes. Do not overpromise and provide prompt notification if commitments cannot be met. Internal policies should also set forth clear guidance on communication.

Lawsuits or legal dispute are not always avoidable Effective business tactics, however, can strengthen a company’s position in these matters. Lawyers can help business protect their interests in lawsuits and disputes.