3 Legal Pitfalls your Company must Avoid

One of the most important things a business owner can do is find ways to minimize risk. While there are a variety of liabilities facing your business that are predictable, there are also many that are unexpected and occur out of the blue.

1. Trusting oral promises . New business owners are particularly vulnerable to relying on oral agreements. Other individuals are excited about your new business venture and they often make promises and even handshake agreements. If it is an individual you know and trust, you are likely to believe you can rely on them to keep their promise. Unfortunately, this type of oral agreement can cause serious trouble for your company. If a lawsuit over the agreement becomes necessary, it is difficult to prove an oral contract existed because it usually comes down to your word against the other party’s word. Thus, it is imperative that a business owner requires all agreements to be in writing.
2. Competing unfairly . All business owners should familiarize themselves with the state’s unfair competition laws. Many business owners get themselves into trouble by hiring a competitor’s key employees. When the new employee provides your business with client lists or other valuable information from their prior employer, you can bet a lawsuit will be filed.
3. Infringing on another party’s intellectual property . Don’t fall into the trap of thinking that a Google search on the internet will allow you to discover if another party has come up with the same idea as the one your business is founded on. All business owners must conduct an exhaustive search to confirm that his or her business does not infringe upon an existing trademark , patent or copyright. Spending time and money defending an intellectual property lawsuit can ruin your company before it even gets the chance to be successful. The small fee you pay to have a business lawyer verify that your company name, idea, service or product will not infringe on another party’s rights can save you thousands in the future.