Sunday, January 20, 2008

How to head off lawsuits

Business writer Jeff Wuorio has written a great article on how to head off lawsuits in your business. I think lawsuits are like war: destructive and useless. By the time they're over, even the alleged “winners” have usually lost.

So to help you stay out of trouble, here’s a brief recap of Wuorio’s seven points.

1. Never let a lawsuit take you by surprise. “Most lawsuits are preventable if you proactively manage trouble and have plans already in place."

2. Get all agreements in writing. Legally, a handshake agreement isn't worth the paper it’s not printed on.

3. Specify how disputes will be resolved. Example: many contracts specify that the parties agree to arbitration or mediation rather than head to the courtroom.

4. Ensure a lawyer sees all agreements. Even well-intentioned written contracts can blow up in your face if they contain some loophole or other issue that the other party can exploit.

5. Never ignore customer complaints. Far too many problems start out as small issues and fester into a lawsuit simply because someone didn't pay sufficient attention to dealing with them as minor headaches.

6. Swallow your pride. "Even if you're in the right, offering a discount, compromising a bill or even offering an apology will almost always trump the eventual cost of a lawsuit."

7. Spend now, save later. For instance, rather than having an attorney draw up all contracts from scratch, do some research and track down the best sort of prototypes that you can find. Then have your lawyer tailor them to your business.

There are more useful details in the full story. Click here.

2 comments:

Sarah said...

I liked your tips & have saved them as a just in case. My business has not yet become large enough to worry about lawsuits as it is only a few weeks old. I was reading over some of you marketing tips and just wanted to ad that the most useful piece of info I have come across is automation I was reading someone elses blog and came across James Brausch. He highlights many ways that you can take the load off your work. Thanks for your post I am sure I will be back to visit it soon.

Jessie said...

Lawsuits are worrisome to business owners and it is something to take seriously. Your tips are very helpful, Rick. I was surprised to see that someone else mentioned James Brausch. He has some helpful tips on how to start and market your own internet business. Good job Rick, keep it up.