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Legal Steps Every Business Owner Should Take

Lesson 11 of 13

Handling a Dispute Risk

Christina Scalera

Legal Steps Every Business Owner Should Take

Christina Scalera

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Lesson Info

11. Handling a Dispute Risk

Lesson Info

Handling a Dispute Risk

What happens when somebody has a problem? This is never gonna happen to you right? You're just the little guy and you're never gonna experience this. False! You, if you're a business owner, at some point in your career, you are going to be facing disputes, controversy, people accusing you of things, sometimes that you didn't even do often times, so let's talk about how to actually handle these things. These are three common scenarios and we're gonna go through each one of them now. So how do you deal with refund requests? What happens when somebody is requesting a refund from you? Well it depends on whether it was a product or a service, and if it was a service, likely there is some kind of contract in place that helps you to define what occurs in the instance where the client is not satisfied, and they do want a refund, or where the work hasn't yet been completed but the client still doesn't decide to go forward with the service, and maybe wants some kind of money back for the service...

s not yet performed. So dealing with refund requests and services is typically a sticky situation if you don't have a contract which is why I said it is one of the most essential things in your business, and it's super easy to knockout with Honey Book - shameless plug - but if you have a contract that describes how a refund request is going to be handled, this is something that can help you to alleviate any kind of tension, or abrasiveness between you and your client because you can just point back to the contract, and look at what it says, and then follow the directions and guidelines set forth in that document. Now, if it is some kind of product, maybe you're selling a digital product, or maybe you're selling a physical product, having a clear refund policy that you're creating today and not in the moment where you are feeling really badly about yourself, or you're just feeling very defensive because someone doesn't like your product, having a clear refund policy that you're creating ahead of time in a rational state of mind, is a great step for anybody, nobody how big or small you are, and no matter how much you think you actually don't need this thing. So again, instead of saying he said she said, and trying to figure out who's right or wrong, looking at your refund policy is a great idea in the instance where somebody is requesting a refund. So from a legal perspective it doesn't necessarily matter where or what your refund policy is, it only matters that it is very clear to the consumer that upon purchase that they can see somewhere on your website, or in your terms and conditions, what your policy about refunds is, and that they can clearly understand it; it's not something ambiguous that just says satisfaction guaranteed or you know, money back, no questions asked within 14 days, and that's not actually your policy. So it needs to be truthful, it needs to be somewhere that they can clearly see it and it needs to be something that is easily to interpret, there's no questions about what your refund policy is for this mass consuming public who's buying your product. Now, what happens when a client is disputing what has actually been offered to them, or there's some kind of discrepancy? Well, I hate to be a broken record, but this is where the contract is really helpful, and this is where you are going to be able to enjoy looking back, pointing back at that contract, and almost using it as a scapegoat to say this is what the situation is, this is how we are going to interpret it because this is the contract that we agreed on before we even started working together. So if there is any kind of client dispute or discrepancy, this is where we enter into a little bit more of a gray area than the refund request, and you're using your best, your best business judgment to make sure that the client hopefully is satisfied, or at the very least isn't blasting you on any kind of review sites, or social media, and that you are doing your best to serve the client even if they maybe are not acting as rationally as you would hope, or if they are disputing something that you could otherwise prove wrong, but you choose to maintain that client relationship or friendship. And then finally, what happens when we run into cease and desist letters. So this could happen on both sides of the fence. A cease and desist letter is exactly what it sounds like; somebody or you, but for this example we'll talk about what happens when you get one. So maybe somebody has seen something that you're doing and they are not happy about it. Their reaction might be to send you some kind of letter that's very formal typically, and maybe written by an attorney or a law firm, and it's requesting that you either take something down or stop using something, maybe it's a photo, or a name, and typically this happens, if you're in business long enough it's going to happen probably to everybody out there. It probably won't happen the first month in business but it's something that is just, it happens in business, and sometimes they're a mistake. So the first thing when you get a cease and desist letter is not to freak out, it's to maybe contact an attorney. This is definitely a situation that is starting to look like litigation, and that's where an attorney is a really good party to get involved if possible, maybe you could even find some attorneys that do free consultations, and let you know whether this is something that they would consider going further with, or responding to on your behalf. So if you do get a cease and desist letter the first step that most people take is just to freak out, and then immediately respond, and that isn't necessarily the best step to take. It's really just to take a step back, relax, and to contact some kind of attorney or legal authority in your life that can help guide you as to what the next steps may be. So sometimes you are actually on the other side of this where you have found somebody's work, and you're not happy with it. It looks a little too close to yours. Maybe it's even a screenshot or a copy and paste of your work. If that is the situation, the correct quote on quote thing to do is again, not to freak out. The first step is to calm down, come back to a rational place and then decide what to do. And the next logical step might be some kind of outreach to that person who has copied you, and to ask for further clarification, or kindly request that they take it down. Now, it might be a little bit weird as an attorney that I'm saying why don't you gently have a conversation with them if that's possible, because a lot of people's knee-jerk reaction is just to go to an attorney, let's sue them, let's get our what's due to us, let's get it taken down immediately, and sometimes that's necessary but often times the kinder, gentler approach works much better, and is far less expensive. So if it's possible to have a conversation, that's always my first gut reaction is to try to have that conversation with the party that has copied a client, or myself, and just try to work things out before we need to take things to the next level, which as you can imagine starts to involve attorneys and legal costs, and gets expensive. Then the last thing I wanna say about this cease and desist letter stuff is that a lot of people are under the mistake that if they just send this letter, that they have no consequence, the person has to take the thing down, they're done with them, they're wiping their hands clean, that isn't necessarily the case. So in recent years, a cease and desist letter has become what's called an invitation for litigation, which is basically just a fancy way of saying that the other person, if they have a lawyer at their disposal, maybe you have a boyfriend, a sister, a mum, a husband, like whatever it might be, if they have somebody like that or they even hire somebody, they could potentially be coming after you just based on that letter. So that's why if there is any kind of cease and desist activity, it's really, really essential to start getting an attorney involved to make sure that you're not doing anything that's either irrational, or going to get you into a bigger problem or situation than you're already facing with this letter in hand.

Class Description

The content and opinions expressed in this course are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem

Brought to you in partnership with

Navigating the legal waters when it comes to your business can feel overwhelming. Attorney Christina Scalera breaks down all the information that you need to know, empowering you to run your business with confidence. This class will teach you:

  • The differences between an LLC, a sole proprietorship and an S corp -- and which one is right for you

  • How to protect your business with legally sound contracts and where to find them

  • What to do when faced with a dispute

By the end of this class, you’ll be able to start the process of setting up your business structure, follow legal best practices and understand the resources available to you.

Ready to protect your business with top-notch legal contracts? Click here to start your free 7-day HoneyBook trial.

Class Materials

Free Bonus Material

How to Run Your Business Like a Boss

Legal Resource Guide

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Student Work

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Every minute of this is filled with such valuable info! She covers every legal topic you could possibly need to know about as a creative small business owner and clarifies lots of confusing topics. I feel super confident about my small business ownership after watching this. Thank you Christina!

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I loved this course! Covered so many topics I've been wondering about in an easy and understandable way!! Brilliant! Thank you!


Amazing! This stuff can be so hard to try and wrap your brain around but this is simple, easy to follow advice.