To avoid legal battle, in bussiness world reference letters are written extremely terse. How do academics get away with this?
My impression is that the difference is largely cultural.  The academic community in the U.S. has developed a culture of relying on written letters of recommendation, and this practice has a lot of inherent stability.  Someone considering suing knows that a questionable lawsuit would permanently ruin their career, in a way that wouldn't necessarily happen in the business world.  (For one thing, academia is a much smaller, more tightly knit, and more philosophically coherent group.)  If a student or job applicant did sue frivolously, then it would probably be cheaper to settle, but the university would not do so: proving a point would be a higher priority than saving money.  (By contrast, for-profit businesses are less likely to make unnecessary expenditures to try to defend their principles.)  University attorneys know that if they advised faculty not to write or require letters, everyone would ignore them and it would just hurt the university's reputation.  The culture takes on a life of its own, regardless of the legal context.

However, I believe U.S. legal precedents are actually pretty favorable for academic letters of recommendation.  The key phrase is "academic deference," which as I understand it is the theory that academic judgments are not subject to legal review because the courts aren't even capable of evaluating these judgments.  (Of course I'm not a lawyer and so I'm probably at least overlooking subtleties.)  You can sue for reasons like discrimination, but you can't successfully sue someone who made a good faith effort to judge your academic performance or potential on the grounds that you think they judged it wrong.

The academic deference doctrine is based on a number of precedents, but it's somewhat controversial.  For example, people argue that it makes it too easy to get away with discrimination (since it makes courts reluctant to examine evidence), and that lots of non-academic judgments are equally difficult to evaluate but don't have a special doctrine protecting them from review by the courts.  See this article by Moss for a review of the precedents and an argument against academic deference.

Depending on the circumstances, there may also be other legal issues.  For example, it's much harder to sue someone for libel based on their evaluation of your published scholarly work.  In particular, you have to prove actual malice since publishing the work makes you a public figure for this purpose.  In other words, it's not enough to prove that the evaluation was wrong; instead, you have to prove that they knew it was wrong or at least had reckless disregard for the truth. (See, for example, Posner's wonderful opinion on whether calling someone a crank is defamatory.)  I believe this is much more clear cut and better established than academic deference is, but it is not relevant for unpublished work or other recommendation letter content.

Returning to the cultural theme, it's also worth thinking about psychological factors.  If I run a business, then my ex-employees could be applying for jobs at competitors, partners, or companies that are irrelevant to my interests.  Among these possibilities, partner companies I'm actively working with are only a small fraction.  The generic case is that I won't care about the new employer or will actively harbor ill will towards them.  If a lawyer advises me that it's best not to say anything, I may seize on that excuse even aside from the lawsuit potential.  By contrast, academia is a world in which we're all partners, and that feels very different.  Universities do compete against each other in some ways, of course, but there's a much greater feeling of good will and cooperation than you see between most for-profit companies.  It's no surprise that very different norms and practices have developed in a far less competitive environment.