Does Commercial Litigation Apply to Small Businesses?

Does Commercial Litigation Apply to Small Businesses

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Commercial litigation applies to businesses of any size, from the smallest one-person operation to a global multi-conglomerate. Small businesses in particular, though, can benefit from an understanding of commercial litigation.

The law has always been, ideally, about protecting the rights of society's weaker members from the abuses of its more powerful ones. This is equally true of commercial litigation, which can help you protect your business against unfair treatment by suppliers, competitors, and even customers. It is also important to understand commercial litigation because even a small lawsuit can be a big deal for your company.

Bullying Is Common

Business disputes are common among all types of companies, and, unfortunately, the bullying of small companies is common. Individuals and other companies think they can dictate behavior to a small company because the small company cannot afford to not comply. Some common types of bullying behavior include:

Distributors who give preferential treatment to larger customers

Customers who try to avoid paying

Companies that attempt to steal your intellectual property

Larger contractors that interfere with your work, workers, or equipment at shared sites

Competitors who use fraud or unfair business practices to try to drive you out of business

Commercial litigation (or the threat of litigation) is a tool you can use whenever one of these situations arises to protect your business and its interests.

Even Small Losses Are Big Losses to Small Business Another reason why commercial litigation is crucial to a small business is that small businesses often operate on thin margins, so that one bad business deal or unfortunate lawsuit can be the difference between your business thriving or failing. Your business may be based on one piece of intellectual property, and if that is lost, so may be your business. If your business has three employees and one of them begins a dispute about wages, breaks, or a termination, it can eat up your payroll. A poorly-handled product liability lawsuit can easily eat up all the profits from the ten thousand other hand-assembled units your business has sold. In any of these cases, commercial litigation be the end of your business.

A Business Lawyer Can Stop Trouble before It Starts

The best way to reduce the risk commercial litigation poses to your company is to head it off. Consulting with a business lawyer is a crucial step to forming your business. Not only will the lawyer help you set up your business in a way that protects your personal assets, he will help you write contracts that will discourage people from trying to avoid compliance with terms, and be enforceable in the event of a breach. A business lawyer can help you understand how to protect your intellectual property and identify unfair business practices. A business lawyer will probably have experience with other businesses similar to yours and be able to apprise you of possible legal issues that may arise in the future.

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