More civil disputes involving emerging companies arise out of ambiguity in the terms of these agreements than an absolute failure of one party to perform. Today, it is an accepted practice for business contracts to limit the liability of the provider of goods or services to the cost paid for those services and to contractually waive liability for consequential or other indirect damages. The failure to include a liability limitation clause in an agreement can cause a simple employee mistake to bankrupt a company. Clear Relationship Among Business Owners . The absence of a clear written understanding among the owners of an emerging company can turn a death, divorce or departure of an owner into a very expensive experience which can destroy a company.
Legal counsel can point out the impact of contemplated actions on a future potential transaction.
As a business grows and hires more employees, the company's employment practices become increasingly important. Legal advisors should be able to advise a company as to which anti-discrimination and other employment statutes apply to it, particularly as the number of employees increases. Effective employment policies can then be developed and implemented to insure compliance with the myriad of federal, state and local employment statutes. The importance of effective policies and implementation through training was recently highlighted by the Supreme Court when it granted broad protection to employers with a written sexual harassment policy which is effectively communicated to employees, and placed a great burden on those companies that do not. Counsel and company executives must then set priorities and establish an efficient and cost effective relationship to allow counsel to most effectively assist the emerging business to reach its goals.