Business Owners: Avoid These Three Legal Pitfalls

Posted on: 30 August 2022

Owning a small business is a great way to be your own boss and take part in the American dream. One key aspect of being a business owner is dealing with the various legal issues that arise from being a proprietor of a shop or other type of establishment. This article examines three of the most important legal issues every business owner must keep in mind. 

Employees and Liability

In certain instances, an owner could be held legally responsible for the actions of an employee. Because an employer is seen as being in charge of an employee's actions, the law may hold you liable if one of your workers causes harm to a customer, another employee, or some other person.

A legal concept known as "respondeat superior" holds business owners responsible for damage or harm caused by workers during the course of their job. For example, if one of your employees drives recklessly to keep an appointment with a client and has an accident, you are likely to be liable for any damages arising from the crash. If the employee has an accident while using the company for unauthorized personal reasons, however, then you probably would not be held responsible.

Another potential problem occurs if you hire an employee without doing a background check and that employee harms someone. If you neglect to perform a background check and hire a person convicted of fraud, for instance, and that individual defrauds a customer, you could be held liable.

Slip and Fall

A common legal issue for business owners is called "slip and fall." When a customer falls and injures themselves on an owner's property, the law holds the owner responsible in some cases. Typically, the injured party must show that the employer was aware that a dangerous condition was present on the property and that the injured person could not have reasonably avoided it.

If you own a paint store, for instance, and do not clean up a paint spill promptly, you may well be liable if a customer slips and injures themselves. On the other hand, if a customer is running up and down the aisles of your store and falls due to their own carelessness, the law does not consider you responsible.

Product Issues

If your business manufactures a product, you must be concerned about product liability. Any defect in the manufacture or design of your product that leads to harm could leave you liable for a lawsuit. Also if your warning label or set of instructions is deficient in some way, this could be used against you in a legal action as well. 

The field of business law is clearly complex and you will need the help of an expert to navigate your way through the complications when legal issues come up. Contact a business lawyer for more information.