Broken sales agreements often leave companies in an awkward position. They may have invested significant time and money in the process. Sometimes, they’ve shared trade secrets with the partner that ultimately backed out of the sales agreement. In any case, a trusted partner has let them down in terms of trust at the very least. It’s a frustrating situation. Is civil litigation the best way to handle a broken sales agreement? In some case mediation or a new negotiation may be the best approach. In more extreme cases, civil litigation may be the best approach, depending on the circumstances.
In legal terms, broken sales agreements are typically referred to as “breach of contract”. These agreements can be broken for a wide variety of reasons. The other party could experience unexpected financial difficulties. Other events might cause the breach of contract like problems in the business, loss of critical team members or other issues. These types of problems don’t typically lead to civil litigation because they are unexpected and don’t show bad faith on the side of the other party.
Breach of contract can occur when the other party is dishonestly. They may decide that they want to pursue other opportunities and decide to shelve your business agreement. The company might find a more beneficial arrangement and ignore the arrangement that they’ve made with your company. This is the kind of situation where civil litigation might be a viable option. In most cases, these types of civil litigation cases go to small claims court where the injured party tries to recover any financial damages that are caused by the breach of contract.
One consideration when it comes to civil litigation and broken sales agreements is the solidity of the agreement. Is it well written? Are the terms of the agreement clear? If you want a sales agreement that is clear enough to protect you in the event that the other party breaks the contract, it’s a good idea to seek legal counsel to help draft the agreement. If a breach of contract occurs, your attorney can advise you about whether civil litigation is the right step to take in your particular situation or whether you should consider mediation or cancellation instead.
All managers, business owners and human resource professionals worry about civil litigation suits from past or current employees. Civil litigation suits are costly and cause a great deal of stress within the company. There is also the risk that one legal suit will spur other employees to bring cases against the company whether they are justified or not. Even frivolous suits cost the company money in terms of legal fees and time and energy. The better your company understands the most common types of employee lawsuits, the better you’ll be able to avoid these suits and prevent them from occurring.
Some civil litigation cases occur due to misconduct on the part of management. These are the easiest types of court cases to avoid. Common examples include sexual harassment and unpaid overtime. Some employees file suit due reasons such as discrimination based on age, race religion, nationality, sexual orientation and disabilities. If an employee’s career stalls based on these issues or he or she is terminated for these reasons, a lawsuit is likely.
To avoid civil litigation, it’s critical that your company have expertise on the laws that protect employees. There are a wide variety of protections including the Family and Medical Leave Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act and other important federal labor laws. You should also be aware of state laws that affect employer-employee relations.
How can you prevent these types of civil litigation suits? The most important strategy is training. Your human resources or training department should ensure that all new managers, team leaders and supervisors attend training on issues including sexual harassment, appropriate performance review practices, approved company practices and avoiding discrimination. Often, people who are new to management roles are unaware of appropriate practices and aren’t conscious of how their actions may appear to employees. New managers should also receive mentoring and feedback on their actions.
You should also ensure that company standards are in line with practices that prevent employee litigation. These include having employee advocates, an employee-friendly work environment, harassment prevention training for all workers and appropriate training on employee warning, discipline and dismissals.