Whether you are a business owner or a consumer, there are some simple steps you can take to avoid litigation. First, regardless of who you are, when dealing with other businesses, customers, or providers of service, one should always investigate the person/company with whom you are dealing. It is certainly easy enough to google a person or entity to see if they have favorable or unfavorable reviews. With contractors and other businesses, one can contact the local department of consumer affairs or better business bureau to see if there are complaints lodged against them.
After you have done some investigation and are comfortable that the person or entity with whom you are dealing, the next step is to make sure that every single agreement you have with that person or entity is in writing. Oral promises and oral contracts are very difficult to enforce. Additionally, the terms of your arrangement should be very specific, as to avoid any confusion down the road as to its terms. If you are the supplier of goods or services, you should present a written contract to the distributor, customer, or other person or entity with whom you are dealing, spelling out the details of your arrangement. Of course, you should also make provision for the event of a default or misunderstanding, perhaps stating that disputes will be settled by arbitration. If you are the customer, you should have an experienced attorney review the contract with which you are presented, to make sure it is in your best interests and that you have an adequate remedy if there is a problem.
In conclusion, while it is nice to deal with customers, suppliers and others on a friendly, informal basis, it is imperative that one reduces their agreement to writing, in the form of a binding contract either prepared by or reviewed by an attorney.