5 Things You Can Do to Avoid Business Litigation

Guest Post by Patrick Watt

Photo by bruce mars on Unsplash

Lawsuits are common to every business. Many executives and business operators will face lawsuits at some point in time. While it is very difficult to keep lawsuits at bay, here are five tips suggested by Streeterlaw, an Australian law firm where you can find the best commercial lawyers in Sydney, that you can and should take to protect your business interests when disputes arise.

Always operate under a contract

When getting into a business relationship with other organizations, always ensure you are covered with a contract that entails the full extent of your relationship. Also, ensure that the contract is clear and easy to understand by both parties. Additionally, your contract must contain everything that has been agreed upon, and it is signed and reviewed by a solicitor.

Make documentation a priority

Retaining all the important documents will also protect you and your business. All relevant communication and commitments must be filled safely. The following are the best filling tips:

  • Keep all your email well organized in a secure filling system
  • Avoid handshake businesses
  • Have important key contracts of vendors, which must be reviewed regularly by counsel, so as to help you remember the different relevant provisions. It is advisable to hire legal counsel that would be reviewing or drafting of contracts, settlement agreements, document retention policies, and non-compete agreements.
  • Save all that is important, including contracts, loan documents, all proof of payments, and tax information.

It is also very important to note that when you are anticipating any business litigations, you should apply for a litigation hold also known as a preservation order or a hold order. Once it has been brought to your attention of any existing dispute or a potential dispute, secure all information and ensure nothing gets lost.

Improving communication is vital

Many business disputes arise because companies are either not honest with each other or one party fails to properly update the other. When communication is well managed, a lot of potential disagreements can be avoided. Always make it your habit to clarify expectations by doing the following:

  • Avoid over-promising
  • Keep a promise that you make, and in case you are not in a position to fulfil it, let the other person know in good time. Be the first to offer a plan on how you will make it up, and be sure to call and make email follow-ups.
  • Be proactive and make sure you encourage open conversations. Avoiding tough situations or conversations will most likely escalate a dispute.
  • Evaluate and enforce only the best practices on how your employees should communicate.

Consider meditation

When both parties to a dispute are ready to compromise, then the best option would be to involve a mediator. For proper mediation to be carried out, lawyers from the two sides must be present as well. Mediators are great in identifying issues and help the parties achieve mutually beneficial solutions. They usually are trained at assessing the parties’ positions more objectively than the parties own lawyers.

Explore different dispute resolution

The courts advise and encourage other ways of dispute resolution including commercial dispute resolution. These alternative dispute resolutions, other than the courts, are usually fast and cheap to conducting a trial before a judge. It does not matter if it’s an internal dispute, such as partnership disputes or a dispute with external bodies; off courts dispute resolution are simply the best.


Business disputes are inevitable but can be easily managed. Some of the points above can help you avoid litigation hence makes you focus your time, energy, and money in your business improvement. The cost of litigation is also quite high and the time, stress, and pressure on the business can be damaging. As the great Einstein once said, “A clever person solves a problem. A wise person avoids it”. The best way to protect your business from litigation is by surrounding yourself with the right people.

About the Author

Patrick Watt is a content writer, writing in several areas, primarily in business growth, value creation, M&A, and finance. Other interests also include content marketing and self-development. Say hi to Patrick on Twitter @patrickwattpat.