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Five Common Reasons a Business Gets Sued

Businesses commonly get sued for a variety of reasons.  There are endless ways a business can get sued, but generally speaking the following five are some of the more common reasons.  The following isn’t a conclusive or exclusive list, rather it is just a few common causes.  It is important to remember that anyone can start a lawsuit for just about anything, merely starting a lawsuit doesn’t mean the plaintiff has a legitimate claim.  

  1. Intellectual Property.  Lawsuits for intellectual property infringement often center around patents, trademarks, and copyrights.  Whether you know it or not, your business has certain intellectual property rights and is potentially infringing on others intellectual property rights.  If your rights become significantly infringed or you infringe on another’s intellectual property rights, a lawsuit is a potential.  When and if the infringement becomes extensive, that is when the lawsuit is likely to occur. 
  2. Employment/HR.  Employment and Human Resource issues may be the most common reason a business is sued.  I typically recommend my clients to hire a Professional Employer Organization (PEO) to manage their employment issues.  Generally, a PEO takes on the legal and accounting issues.  In my opinion this is the way to handle and mitigate this lawsuit risk. 
  3. Injury/Accident.  Slip and fall accidents and other such unfortunate situations are typically unexpected incidents that are generally out of a business owner’s control.  Business owners certainly can be negligent in allowing such incidents to occur, but generally business owners try to avoid such incidents.  Reasonable approaches to mitigate risk from such situations include having appropriate insurance and periodically performing a risk analysis/response. 
  4. Fraud/Contract Breach.  Fraud and contract breach lawsuits really represent to me a broad variety of lawsuit causes.  It is not uncommon when these lawsuits are precipitated due to some level of poor or miscommunication.  When two parties aren’t effectively communicating, it is common that the parties begin assigning negative intent to the other’s actions.  Good communication certainly isn’t the only answer or solution for all disputes, but it can go a long way in mitigating risk.  Good communication can come in the form of clear contracts, timely responses, fully fleshed-out agreements, and not engaging in “shady” business dealings. 
  5. Partnership/Securities.  Partnerships and investor relationships can become extremely emotional very quickly.  When parties become emotional, lawsuits can likely follow when the stakes are high.  Securities law specifically is complicated and is filled with many state and federal legal landmines which may precipitate a lawsuit. 

There are many other reasons one can get sued and there are many industry specific reasons one can get sued.  For example, civil rights lawsuits can be common in the property management industry or product liability lawsuits may be common in the manufacturing industry. 

Now ultimately, one of our goals as Fargo Patent & Business Law, PLLC is to try and mitigate the risk of your business being sued.  It is impossible to stop all possibility of being sued, but you certainly can mitigate the risk.  

We at Fargo Patent and Business Law have experience running businesses and understand business.  This unique trait can help bridge the gap between the needs of business and the demands of the legal system.  If you have a question, please don’t hesitate to reach out.

Fargo Patent & Business Law, PLLC – info@fargopatentlaw.com – 701-566-7571