Commercial Litigation in Your Start-Up

Starting a business from the ground up is by no means an easy venture. It’s all about taking your passion and turning it into a working, profitable company. That’s a huge undertaking.

One of the toughest experiences start-up business owners could face is the possibility of litigation. Despite making use of some of the top commercial litigation lawyers Melbourne and other Australian cities have available, it can still put a strain on your business. And the reality is most litigation issues could have been avoided.

Here’s Provide Simple Steps to Avoid Litigation Issues in Your Start-up

Anyone who has ever had to deal with extensive commercial litigation will easily tell you that in hindsight, a few different decisions or business practices would have avoided the situation completely.

If you’re thinking of, or have recently started your own company, it’s important to know what steps to take to avoid being dragged into litigation. Fortunately, we’ve compiled a list of five steps to prevent or at the very least, minimise the risk of getting your start-up stuck in a court battle.

Seek Legal Advice in Advance

Some business owners view lawyers in the same light as plumbers. They only call them once the proverbial you know what has hit the fan. In reality, investing in the services of a commercial litigation lawyer in advance will save you a lot of money and aggravation.

Any agreements or contracts you draw up or sign should first be reviewed by your lawyer. This will ensure you don’t put yourself or your company at risk by committing to a faulty document.

Stick to Agreements

One of the biggest causes of commercial litigation results from a breach of contract. This happens when one of the parties involved has deviated from the stipulated terms of the agreement.

In layman’s terms, stick to what you have promised. Do what you agreed to, on the date that you agreed to do it. This includes agreements between employees, customers and suppliers.

How exactly do you maintain this? Your golden rule should always be to never over-promise on anything!

Keep Accurate and Up-to-date Documentation

As a business owner, it’s crucially important to keep a record of your company’s affairs. This means taking the time to efficiently document communications and agreements. Your records might one day save your company in the case of litigation.

If you don’t regard yourself as an organised person, it might be a good idea to employ someone with administrative experience to handle that aspect of your business. A few tips you can follow yourself include the following:

Don’t do handshake deals. Any type of agreement must be in writing, reviewed by your lawyer and then signed by the relevant parties. Each party must receive a copy of the contract.
Have a separate email address for your business. Keep work emails organised in a system that makes it easy to find necessary communication even if it’s a few years old.
If your business makes use of manual receipts and documentation, keep dated copies. Wherever possible, transfer these manual records to a hard drive so that they can be backed up.
Any information processed digitally should be organised and regularly backed up. Ensure that you have adequate anti-virus software to prevent cyber intrusion.
Ensure that access to your customers’ files and personal information is password protected and not easily accessible.
Have a separate business bank account in your company’s name. Never mix your personal money with business funds.
Keep manual documentation, employee records and supplier or manufacturer contracts in a sealed filing cabinet in your office. Never leave your documentation where any disgruntled employees can have access to them and use the data to hurt your reputation.

Treat All Employees Fairly and the Same

Many commercial litigation cases involve employees. A few tips to protect your brand:

Treat your employees as workers and not as friends.
Keep to the work hours and agreements stipulated in each person’s employment contract.
Treat all employees the same. There should never be favouritism or special preference given to any employee.

A disgruntled employee might keep better records than you and won’t hesitate to use them against you in a litigation case! So, rather play it safe!

Eliminate Unethical Behaviour

Avoiding litigation isn’t just about your behaviour and your contracts. It also involves your employees’ behaviour. They’re a representation of your company. Often, they are the face of your business because that’s who the customer deals with.

For this reason, keep track of how your employees treat customers and suppliers. There should be a clear guideline of work principles and work ethics that need to be followed at all times. Never allow reckless or unethical behaviour to happen in the name of your company.

Final Thought

Starting your own business is about a lot more than turning your dream into a sustainable income. A large chunk of running your business involves staying out of court and keeping the company afloat.

Follow the tips we’ve shared with you and any other offered to you by your commercial lawyer. Never see your lawyer as a last resort but rather as the first line of defence. Doing this will not only help you survive but even flourish!