General business law covers traditional legal topics, such as contracts and insurance, which directly relate to operating a business, as well as practical topics, such as business planning and preparing for and defending against business lawsuits.
Business planning encompasses more than getting your business going. It also involves becoming familiar with the relevant antitrust laws, so that you don't engage in conduct that illegal monopolizes your market or inadvertently enter into agreements that restrain trade, and learning how to salvage a sputtering business. Depending on your area of business, effective business planning may also require familiarity with less familiar legal topics, such as agriculture law and international law.
The law of contracts determines when promises are enforceable. The fundamental requirements for forming a binding contract are an offer, acceptance, and consideration. To be enforceable, a contract must be formed by competent parties, who give their consent, to a legal agreement. A party may be excused from performing under a contract by proving a defense to breach of contract. Such defenses include duress, fraud and misrepresentation, mistake, lack of consideration, and the statute of frauds.
Insurance transfers and allocates risks from the person taking the policy or "the insured" to the insurance company or "insurer." An insurance policy is a special agreement between the insurer and the insured. To be enforceable, the policy must meet all of the usual requirements of a contract and, in addition, the insured must have an "insurable interest" in the subject matter being insured, such as property, life, and health. Businesses usually carry basic property insurance and commercial liability policies. But they may also carry fidelity insurance, business interruption insurance, and directors and officers liability insurance.
To protect yourself from business lawsuits, shield yourself from personal liability exposure, make sure you have a comprehensive general liability policy in place, and have well-drafted company policies and procedures, such as an employee handbook, in place. If your business is sued, call your lawyer, tender an insurance claim, allow your lawyer to speak for you, investigate the allegations, assess your potential liability exposure, formulate a plan of defense, and strive for a settlement based on sound business judgment.