How to Prepare Your Texas Small Business for a Lawsuit Before It Happens

 Posted on November 14, 2025 in Business Law

When running a small business, a lawsuit could interrupt your daily operations for an extended period of time while draining your finances. However, in many cases, it is possible to get ahead of a lawsuit and take action to avoid litigation or mitigate the damage. If you are concerned about a potential lawsuit facing your company, be sure to get in contact with a Wilson County, TX business law attorney.

Geoff Mayfield, Attorney at Law understands that a threat to your business is a threat to your livelihood. To protect your best interests, we will explore every possible avenue to help you avoid litigation, pursuing other means of dispute resolution. If all else fails, Attorney Geoff Mayfield is also prepared to represent you in trial with fierce advocacy. Attorney Mayfield is a respected member of the Texas State and San Antonio Bar Associations, highlighting the trust he has earned in the legal community.

Common Reasons for Lawsuits Against Small Businesses

There are many situations in which a business owner may be facing legal action, whether from a client, another vendor, or even someone within the company itself. Not all business disputes have to end up in a drawn-out courtroom battle, but when not handled carefully, a disagreement can escalate to a lawsuit. Common disputes in small business matters include:

• Breaches of contract: If you are accused of not holding up the terms of a contract, the other party may try to take action to enforce it, up to and including litigation.

• Commercial landlord/tenant disputes: If you are renting a property to conduct business, you could face legal issues related to breaking the terms of a lease or allegations of not paying rent.

• Owner/partnership disputes: If you and a business partner agree about the direction of the company, a prolonged disagreement could end up going to trial.

In any case, Attorney Geoff Mayfield will take the time to understand your situation to better understand what is at stake for you and your business. We will pursue an ideal resolution to both protect your interests and avoid a lawsuit. 

Is Business Litigation Necessary?

Going to trial is often a last resort to resolve a business dispute. In many cases, the issue can be resolved through other, less expensive means. For instance, you might consider arbitration, which does not take place in court but allows for a legally enforceable agreement (Texas Civil Practice and Remedies Code Sec. 171.001). In arbitration, you and the other party or parties in dispute can argue your respective cases to a third-party arbitrator, who can then make a binding decision. Arbitration can usually be resolved with less time and money spent than litigation, making it a preferable alternative to a full trial.

You could also consider mediation as a way to avoid a lawsuit. Unlike arbitration or litigation, this involves collaborating directly with the opposing party with the help of a third-party mediator, working toward a settlement. You might consider going into mediation if you want to maintain a continuing working relationship with the other party in the dispute, like a business partner.

Preserving Documents Before Business Litigation

As a business owner, diligent record-keeping is critical in avoiding unnecessary lawsuits. You should keep track of:

• Records of employment at your company

• Important contracts, such as partnership agreements

• Financial statements and invoices

• Permits

• Business formation records

• Patents and copyright documents

Many business disputes arise from mistakes of fact or misunderstandings about the terms of an agreement. Having an easily accessible paper trail can help you dispute false accusations and allow you to resolve disputes outside of court.

General Counsel Can Help Business Owners Avoid Litigation

Many small businesses do not have the resources to maintain a dedicated legal department, especially if lawsuits are few and far between. However, if you are facing a legal issue that could end up going to trial, you could benefit from limited general counsel from a qualified business law attorney.

Seeking limited general counsel is valuable when you are confronted with an unexpected legal issue. For instance, if you need to make sure that your business is complying with industry regulations, a business law attorney can review your case and advise you of what steps to take. Attorney Geoff Mayfield can provide general counsel for a variety of issues, including drafting and negotiating contracts, employment law concerns, partnership agreements, and more.

Responding to a Lawsuit as a Small Business Owner

If you are threatened with a lawsuit by another party, your immediate response could shape the legal proceedings. First, look carefully at the allegations of the lawsuit to make sure you understand what you are being accused of. Then, make note of any important deadlines so you can start planning your formal response. If you fail to show up in court, it could result in a default judgment being issued against you, leading to an unfavorable outcome.

It may also be prudent to limit your contact with the other party in the dispute once legal action has been threatened. Any attempt you make to clear up the situation – no matter how good faith – could end up hurting your case more than it helps. When litigation becomes a real possibility, formal communication should be handled through your respective attorneys.

Seeking legal representation early on in a dispute is arguably the most important step. The sooner you contact an attorney, the more time you have to map out your course of action, whether it involves settling outside of court or responding to the lawsuit in a trial.

Contact a Comal County, TX Business Litigation Attorney

Our firm takes a strategic approach to every case, meeting business owners as individuals to better address their needs. With over a decade of legal experience, you can trust Geoff Mayfield, Attorney at Law to handle your concerns with care.
Do not hesitate to reach out if you have any questions about what we can do for your small business. To schedule a free consultation with our Wilson County, TX business lawyer, call us at 210-535-0870 today.