Unfortunately, when you become a business owner, you quickly find that what you don’t know can kill you. Even if that sounds a bit bleak, that is the unfortunate reality that many entrepreneurs and business leaders end up learning the hard way.

One of the fastest ways to deplete resources is to be involved in a lawsuit as a growing company, so we at Hartmann Law Group wanted to highlight some of the top reasons why smaller companies get into legal trouble.

Actions in Tort

A tort is a legal term indicating a wrongful act or an infringement of a right (other than under contract) leading to civil legal liability.

Torts fall into three categories:

Intentional torts – Intentionally hitting a person or causing damage to a vehicle, for example

Negligent torts – Causing an accident by failing to obey traffic signals or causing property damage by not following standard procedures, for example

Strict liability torts – Liability for making and selling defective products or an occurrence resulting from not following industry regulations, for example

Businesses are often sued for harm that their products or employees cause to a person’s property or self. If an employee damages a floor while working inside a home, or if a product breaks and a piece of it causes harm to someone, that is an example of where a lawsuit would likely occur.

Since businesses can be sued for damage done to someone’s property, they should be aware that the plaintiff just has to prove that the business and/or their representative was negligent in failing to exercise reasonable care while performing the activity that caused the harm.

At the same time, if a product does damage to a person or their property, then that person will be looking to prove that 1. They were using the product in accordance with provided instructions and 2. That the occurrence was something that the company should have accounted for in their design and manufacturing process.

Breach of Contract

Businesses are often sued for not fulfilling their end of a contract. These claims can come from individuals or other businesses and can be completely valid or questionable.

If the contract is valid, which will be the first thing we at Hartmann Law would investigate, then the business may get sued if it cannot or will not perform the specified actions as per the contract, and within the previously agreed upon timeframe.

Breach of contract lawsuits will sometimes ask the court to order the business to do what it agreed to do in the contract, which is known as specific performance. In other cases, the pursuer of the lawsuit will sue for damages, asking the court to award as much money as they would have made in profit had the contract been fully performed.

Discrimination and Wage Related Claims

Wage payments are the subject of frequent lawsuits against smaller businesses. Such claims may come from current and former employees, or be brought against the business by government agencies such as the Department of Labor.

Many wage disputes have to do with the withholding of wages or overtime pay that is due to an employee, or for paying less than minimum wage.

With a similar likelihood of resulting in government intervention, discrimination cases often involve the withholding of services or rights from disabled person underemployment or contract agreement. This includes Title VII offenses, age discrimination, failure to accommodate or provide equal treatment for pregnant and disabled employees, as well as unequal treatment for other reasons such as gender or race.

If you or someone you know would like to safeguard against litigation, contact the team at Hartmann Law to put in place strategies and documentation for protecting you from what can be a very long, resource-intensive, and draining legal process.