You may have worked with a small business attorney when creating your company. Having one you can consult with as you operate your business is wise, too, for a variety of scenarios.
The good news is that it’s not always necessary – or even possible – for small business owners to hire in-house lawyers or expensive corporate attorneys. There are lawyers firm that charge a contingency fee, which means you only pay for any claims you’re a part of if your legal team wins your case.
Here are 10 of the most common types of business-related legal claims to be aware of. If you experience any of these situations, it’s wise to contact an attorney for assistance.
1. Breach of Contract
One of the simplest and most common types of small business claims is a breach of contract. This is where a contract exists between individuals or businesses, in which one side agrees to do something or provide something for something in return. When the contract is broken, and one party suffers a monetary loss, they may make a breach of contract claim against the offending party.
2. Construction Litigation
Construction law claims occur both in the construction industry and because of small businesses dealing with construction companies. Some reasons why construction litigation may occur include delays on projects or late project completions, structural failures, excessive work scope changes, failure to meet performance standards and guarantees, and construction defects.
3. Real Estate Fraud
As your business is searching for commercial real estate for an office space, there are several types of real estate fraud that may occur with aims to take advantage of your business. These include misappropriation of funds, advanced fee schemes, misrepresentations, and falsified documents and fraudulent statements made by any party involved in the real estate transaction.
4. Investment Fraud
Small businesses may invest in other parties, or work with investors to get their own funding. Investment fraud occurs when the entity one party is investing in is not legitimate, or when an investor uses illegitimate or illegal obtained funds to make an investment.
5. Technology Disputes
When business-patented technology is stolen or misused, or technology use is granted then denied or stripped, technology disputes may take place. These relate to software and systems, physical equipment, partnership and investor disputes, vendor disputes, licensing disputes and independent contractor disputes.
6. Whistle-blower Actions
Whistle-blowers are employees who report an employer for improper actions. Whistle-blowers are protected by the Whistleblower Protection Program, which means employees who report violations of workplace laws are unable to be discriminated against. Small business owners should be aware of disgruntled ex-employees who may claim to be whistle-blowers but who are just trying to hurt the business.
7. False Claims Act
Small business owners should be aware of avoiding potential violations to the Federal False Claims Act, which is a tool combating fraud against the federal government. Any time a small business is stealing government funds, whether through defence contractor fraud, securities and financial fraud, insurance fraud, Medicare and healthcare fraud or other types, whistle-blowers may alert the government about possible illegal action.
8. Wage and Hours Claims
Wage and hour claims result from an employee stating that an employer failed to pay the wages that were due for the number of hours worked, including overtime wages. The United States Department of Labor works to ensure employees are paid, regardless of immigration status.
9. Shareholder Disputes
For small businesses that have multiple shareholders, shareholder disputes regarding valuation and operations may occur. Some types of shareholder disputes arise because of fraudulent transactions, funding of personal expenses through business accounts, misappropriation or theft of physical assets, disagreements over valuations of physical assets or business value, and more.
10. Unlawful Competition
Small business owners rely on fair and legal competition laws so that they have a just opportunity to compete in the business market. Some types of unlawful competition that may occur that can harm the likelihood of small business success include trademark infringement, misappropriation of trade secrets, false advertising, false representation of services or goods, and unauthorized substitution of one brand of goods for another. All actions may be grounds for legal action.
Get Protection for Small Business Claims
As you can see, there are many diverse forms of legal threats businesses face every day, even when they’re operating completely legally. Ex-employees, current workers, shareholders and even the real estate agents who sell a business owner office space may all commit fraud that warrants a legal claim.
Other times, small business owners must fight against false claims filed against their business. Small business owners can connect with a business attorney who works on a contingency basis during these times, so that they save money and only pay for legal action that protects their business.