Three Essential Legal Risks to Tackle Before Year End

By Davis Law Group Trial Attorneys

As the year winds down, many business owners and professionals find themselves caught up in holiday plans and year-end celebrations. Yet, some legal risks quietly build up throughout the year, waiting to cause trouble when you least expect it. These risks rarely explode overnight. Instead, they grow from missing contracts, unclear agreements, or unpaid invoices that everyone assumes will resolve themselves.

Before the calendar flips to January, it’s smart to pause and ask yourself some key questions:

• Have you been doing business without signed agreements?

• Are there unpaid invoices that need your attention?

• Is someone relying on your trust instead of following agreed terms?

  
  

Taking time now to review these issues can save headaches and costly disputes in the new year. Let’s explore three essential legal risks you should address before the year ends.

Missing or Unsigned Agreements

One of the most common legal risks is operating without proper, signed agreements. Whether you run a service business, sell products, or collaborate with partners, contracts protect your interests and clarify expectations.

Why this matters:

Without a signed contract, it’s difficult to enforce terms if a dispute arises. Verbal agreements or informal emails rarely hold up in court. For example, a client might claim they never agreed to certain fees or deadlines, leaving you with little recourse.

What to do:

• Review all ongoing projects and partnerships. Identify any that lack signed agreements.

• Draft clear contracts that outline deliverables, payment terms, deadlines, and dispute resolution.

• Have a legal professional review your contracts to ensure they comply with Georgia or Tennessee laws.

• Get signatures before work begins or payments are made.

  
  

Example:

A Georgia-based consultant discovered a client refused to pay for extra work because no contract specified additional fees. After drafting a clear contract for future projects, the consultant avoided similar issues.

Unpaid Invoices and Outstanding Payments

Unpaid invoices can quietly drain your cash flow and create tension with clients or vendors. Ignoring these can lead to bigger legal problems, including collections or lawsuits.

Why this matters:

Late or missing payments affect your business’s financial health and may violate contract terms. If you don’t act, you risk losing money and damaging professional relationships.

What to do:

• Conduct a thorough review of all outstanding invoices before year end.

• Send polite but firm reminders to clients with overdue payments.

• Consider setting up payment plans for clients facing financial difficulties.

• If necessary, consult a lawyer to draft demand letters or prepare for collections.

  
  

Example:

A Tennessee contractor found several invoices unpaid for months. After sending formal reminders and involving legal counsel, the contractor recovered 90% of the owed amount before year end.

Relying on Trust Instead of Written Terms

Trust is valuable in business, but relying solely on it without written terms can cause misunderstandings. When trust replaces documentation, assumptions can lead to disputes.

Why this matters:

People may interpret verbal promises differently. Without clear terms, it’s hard to prove what was agreed upon. This risk grows when informal arrangements extend over time.

What to do:

• Convert any informal or trust-based agreements into written contracts.

• Clarify roles, responsibilities, and expectations in writing.

• Use emails or letters to confirm key points discussed verbally.

• Keep records of all communications related to agreements.

  
  

Example:

A small business owner in Georgia trusted a supplier to deliver materials on time without a formal contract. When delays occurred, the lack of written terms made it difficult to claim damages or enforce penalties.

Addressing these legal risks before the year ends helps you close the year on a strong note and start the new one with confidence. Taking action now means fewer surprises, better cash flow, and stronger business relationships. Schedule a consultation or call 404-446-2932 today.