Four Costly Misconceptions About Business Law
Meeting the daily demands of running a business often means making choices that will shape its success over the long term. Unfortunately, when those decisions are grounded in legal misconceptions, the consequences can be costly. Many business owners unwittingly rely on common myths that do not seem harmful but that can result in financial loss, conflicts, and expensive litigation. Below, one of our Utah business law attorneys breaks down the truth about four costly misconceptions in this legal area.
Written Terms are Automatically Enforceable
Most business owners know to get any important agreements in writing. Signed documents are always better than relying on another person’s word but it is important that you do not assume that every written agreement is automatically enforceable. All contracts in Utah must meet specific legal requirements in order for a court to uphold its terms. Too many business contracts do not fulfill these requirements.
Verbal Agreements are Not Enforceable
Just as some business owners believe written agreements are automatically enforceable, others mistakenly think that verbal agreements are never enforced. Verbal contracts are harder to prove than those that are in writing, these agreements can still be legally binding if they meet the same legal requirements as written contracts.
The main issue with verbal contracts is not that they are illegal. It is that they are much more difficult to prove than their written counterparts. Without a written agreement, it is much harder to show the terms that were agreed upon, or even that there was an agreement at all. It is also important to keep in mind that certain contracts must be in writing under Utah law, such as contracts involving the transfer or sale of real estate.
A Lawyer is Only Necessary if You are Sued
This misconception can be particularly costly. Waiting until a legal issue arises can mean greater expenses and fewer options. One of the best ways to protect your business from preventable issues is to be proactive and seek legal guidance well before the first sign of trouble. A lawyer can help you determine which business structure is right for you, craft properly executed contracts, help you avoid expensive mistakes with employee handbooks, and more.
An LLC Assures Protection for Personal Property
A limited liability company (LLC) can protect your personal assets from being seized to pay for debts of the business and other liabilities. However, if a court determines the business is not being run properly, they may treat the business as an extension of yourself. This can happen if you combine business and personal finances, sign agreements for yourself instead of on behalf of the LLC, or neglect business records or fail to keep them current.
Our Business Law Attorneys in Utah Can Help You Avoid Mistakes
At AGS Law, our Utah business law attorneys can help you establish a business, draft the contracts it will rely on, and provide the sound advice you need to protect you and your company. We help you avoid legal mistakes so you can focus on running your business. Call us now at 801-477-6144 or contact us online to schedule a consultation and to get the sound advice you need.
Source:
le.utah.gov/xcode/Title15/C15_1800010118000101.pdf
