Litigation! The word has many connotations, most of which are pejorative. The “litigation happy” label is ubiquitous. In the business world, “litigation” has a much more pragmatic import. It remains a useful tool for San Diego business seeking legitimate recourse but simultaneously is the source of unease. While a full proof method of avoiding litigation may be impossible, there are six simple practices businesses of all sizes can follow to reduce the risk of litigation. The first three pre-conflict practices are set forth below. The remaining three post-conflict practices are set forth in Avoiding Litigation – Part Two of this article.
Get It In Writing. Ideally a contract attorney will assist with the drafting and negotiation of all contracts. However, this may not be practical for many businesses, especially for new and growing businesses or those that routinely contract with vendors and customers. If an attorney is cost prohibitive, drafting basic instruments yourself to memorialize your agreements is a pragmatic alternative. The internet provides a wealth of helpful instruction, sample contracts and anecdotal information from other business owners. The paramount concern is mutual understanding. Although you may not recognize all the legal complexities of contracting, a writing that memorializes your agreement at the very least reminds each side of the representations made. Be sure that everything discussed orally is in writing. Don’t take anything for granted. If the person you are contracting with is resistant to a detailed agreement, there is reason for concern (see “Use Common Sense” below). Faced with a written agreement, even the most difficult of parties will often concede critical points. Getting it in writing without the assistance of an attorney can be a pragmatic alternative which is better than no writing at all. However, consultation with a contract attorney remains the best way to ensure that an enforceable contract is in place to protect your business’ interests.
Use Common Sense. Learn to recognize repeat problem areas either with customers or vendors. If a vendor is repeatedly late with deliveries or a customer owes you money or either is constantly complaining, it’s generally a sign that those types of problems will continue. Don’t ignore obvious perils. When your gut tells you something is fishy, it’s probably not worth the frustration to go forward no matter how appealing a customer’s business or how economical a vendor’s products or services may be. These are the folks that are more likely to create conflict with you and others. If you offer a service or invite customers into your place of business, don’t be oblivious to hazards. No matter how busy you are, immediately address anything that might cause even the slightest mishap. There is no substitute for common sense. There is no rule book for you to follow. Your job is to be aware.
Treat Everyone With Respect. This is difficult for some people. Entrepreneurs and successful business men and women are generally driven focused people with a clear vision. They are intelligent, savvy and direct with little patience for distraction, excuse or delay. Unfortunately, this personality trait is not always conducive to building strong enduring relationships. Your customers, vendors and clients are part of a diverse population comprising varying degrees of motivation, intellect, knowledge and patience. Some communicate better than others, and some are simply nicer than others. They all have one thing in common – they consider the deal between you and them to be very important. Whatever the personality trait, treating even the most difficult people with respect reduces the likelihood that they will go back to their office or home complaining about how they were treated. This in turn reduces the likelihood of conflict. It’s the difficult people that will most likely lead to conflict, so for this very reason they are the ones you should be most careful with. In colloquial terms, “suck it up”. Stay polite and considerate, and be apologetic (not apathetic) when you cannot accommodate them. It won’t cure every potential conflict, but it will reduce their occurrence. If you think you are incapable of this type of patience, insulate yourself using management and staff who have these skills. The ultimate reward is the goodwill respect garners over time – a priceless commodity for your business.
These seemingly obvious rules are too often overlooked. A little common sense and respect go a long way even for the largest corporations. And don’t forget – get it in writing. Avoiding Litigation – Part Two sets forth the three post-conflict practices that are conducive to reducing your business’ risk of litigation.