Regardless of the size of a company, disputes are a serious issue that sometimes threaten the very existence of a business. From family-owned restaurants and small retail establishments to international corporations and very large firms, disputes arise for numerous reasons and often bring harsh financial consequences.
Aside from the financial side of business disputes, these disagreements often shatter crucial partnerships and bring down the reputation of a firm. It is imperative to focus on strategies to prevent disputes and ensure that they are handled appropriately when they arise.
What preventative measures can businesses take?
There are numerous ways in which business owners can avoid disputes from arising in the first place. For example, a strategic business structure can provide oversight that may catch potential issues before they escalate. Hiring outside consultants may provide additional perspective or identify potential challenges.
Many disagreements revolve around contracts. This highlights the importance of drafting effective contracts and reviewing them carefully before signing. Moreover, a solid understanding of various laws that apply to businesses (such as employment law matters and other obligations) is also crucial. If a disagreement comes up with a business partner, staff member, client or competitor, it is important to reduce tensions and strive for a mutually beneficial outcome.
How should businesses address these disputes?
Regrettably, some disputes are inevitable. There are three primary methods to address an issue that cannot be resolved between business entities: mediation, arbitration and litigation. The first two avoid a courtroom, while litigation utilizes the judicial system to determine an outcome.
Any business owner involved in a dispute feels immense pressure because of the situation. It is important to remain calm and move forward cautiously. Review any previous agreements carefully, collect evidence on your behalf, and explore all your legal options and resources available.
Business disputes may present a new challenge, but with preparation, a strong defense and the right mindset, it is possible to come out of the dispute with a new perspective that will benefit the business in the long term.