We face disputes in our lives often, whether they may be personal disputes or business disputes. Personal disputes, as sad as they may sound, come with an added benefit of a chance at resolution at some point. With business disputes, resolving them is a task as both the parties involved will always look out for things working out in their favor.
When a business dispute takes place, it involves many many aspects of law and litigation that need to be worked out in order to resolve a dispute. Disputes can lead to incurring losses in business, spoiled partner/employee relationships, etc.
What Are Business Disputes?
Any kind of disagreement between two parties who are involved in a signed contract can be referred to as a business dispute. Business disputes are inevitable and take place at least once in a lifetime. It depends on the severity of the dispute to decide how it will be resolved, which method should be adapted, and what the repercussions will be.
If business disputes are not resolved soon, they pose a threat to the functionality of the business.This can cause you to stop paying attention to the integral aspects of business that will help you achieve your goals and end up disrupting your flow of business and its success.
The most common business disputes arise between business partners or between a business’s suppliers, contractors, employees, or clients. These issues can arise if the promised terms of the contract are not fulfilled. For example, one of the parties may believe that the money offered is not adequate, the quality or the time of delivery was not up to the terms as mentioned in the signed agreement.
Most common business disputes have seemed to take place when a product or service is not up to the mark or does not satisfy customers. Business disputes can also take place between employees and the company if at any given point an employee feels harassed or threatened by the company. In situations like these, an employee can file for business claims.
Business disputes on a bigger level often take place between partners or directors which may be because of differences in terms of the company or business’s yield and methods of doing business, etc.
Can You Try To Avoid Business Disputes In Any Way?
No matter what your business may be about, disputes are inevitable. No business can have an anti-dote for disputes but some measures can be taken in order to help prevent these inconvenient situations.
- A ‘guidebook’ of sorts that every employee, partner, director and clients (remotely) can refer to before any business transaction going through and in order to stay aware of policies and procedures set in text and legal that will help establish straightforward rules.
For example, standardized forms and contracts can be used by businesses to make sure that they take all the possible steps to limit any business disputes arising.
- A lot of disputes sprout from hires and fires. It’s a hot topic for every business. These things come out of the blue and tend to surprise anyone since it’s in order to maintain some level of privacy. An employment lawyer can be introduced to the company as someone who can help file these rules that are not only according to the latest employment laws, but also applicable to all universally. People who need to abide by these rules as a part of this business will not feel targeted if all rules are drafted fairly.
- If a business is in the market for its products, any potential hazards can be made known to the customers via packaging or small manuals that come with the product in order to steer clear of any possible dispute seeds.
Various Types Of Business Disputes:
There are ‘n’ number of causes that can lead to a business dispute. The term ‘business dispute’ itself incorporates many differences that can turn into disputes in companies from every possible field and industry. A business dispute can be of any kind, regarding any profession, we can never be sure of the intricacies of these legal matters. Let’s discuss a few types of business disputes that can arise in the commercial world.
You definitely must have heard of real estate disputes at least once in your life. Real estate refers to property law and everything regarding it. Real estate comes with a lot of rules. That’s why you will always need a project manager to take care of all legal work. It’s impossible for someone not from that particular field to have knowledge on how to handle things or if what they’re doing is right.
Most real estate disputes take place because of things like disagreements over property lines, who pays for damages, blocked views, ownership rights, or who should be held accountable for any damage to the property. Breach of contract disputes are common as landowners/landlords can sometimes not see eye to eye with tenants and either of them can steer away from the agreement. Fraud disputes, co-owner disputes, boundary disputes, and many more are involved.
A contract can be referred to as a binder of rules. Everything written in this contract lays down the rules for the particular business transaction that is about to take place. These rules only exist in order to set boundaries for many details and how they must be carried out.
When someone signs this contract, it means that they have read rules and regulations and have decided to abide by them. If one party fails to respect any clause from the contract, the other party is entitled to sue them on the grounds of not obliging by the rules.
Supply Chain Disputes:
Supply chain disputes are very common disputes faced by customers, retailers, wholesalers, etc. When a company promises to supply a particular number of products to a customer who might be a retailer, a wholesaler, etc and then fails, that supplier can get sued by their customers for not maintaining their clause of the contract.
This can result in having to delay supplies to the buyers as the main manufacturer/ supplier has not been able to deliver goods on time. During the pandemic, supply chains were disrupted as the world’s economy went for a toss, demands rose, and the possibility of meeting these overwhelming demands depreciated.
Intellectual Property Disputes:
Things can get ugly for intellectual property disputes, Intellectual property is referred to as an idea or an invention made by someone that is being used at a commercial stage.
The idea of patents, trademarks, domain names, etc are used in order to make sure that one’s intellectual property is protected under their own name and nobody takes credit for it or makes any profit through it. Infringement and contract claims can result in disputes that need to be settled legally.
Business Sales And Acquisition Disputes:
Business sales and acquisition disputes can arise because of multiple reasons. Sales and acquisition refers to trying to bring in more customers who can help expand your business by availing your products and services. It can also be about selling your business off or having people buy shares of said company. Disputes in this area arise when there are unclear or disclosed contracts, unforeseen complications, lack of transparency, or even fraud.
Dispute between shareholders and directors can arise because of different decisions in terms of the company’s strategy. It can be regarding a director not living up to or performing his/her duties. It can be about less salary paid to shareholders working for the company. Differences in terms of the plan of action business strategies or services that they may offer.
How Can You Handle A dispute Before Stepping Towards a Resolution?
You cannot completely avoid disputes because they are not one sided. As they say – ‘There are two sides to a coin.’ So what can you do between the time of acknowledgement and the beginning of the resolution process?
Definitely easier said than done. But, keeping a calm mind only shows how well you can handle conflict and stay sane. Lashing out may give the opposing party some leverage through your behavior. They might think they have an upper hand in the situation and if things go to court, your behavior can be made an example out of.
Steer away from social media platforms. Don’t even think of using it as a place to rant your thoughts. That is not a good look for you and your involvement in the company’s future if you stand a chance. You might just ruin your future at that company and for any more work to come your way.
Keep track records of anything that might come in handy. Contracts, lease, products, warranties, purchases, etc.
Put Your Concerns In Writing
Address a formal letter to the opposing party or the party you have an issue with. Address your concerns in detail and let them know what your issues are and what do you suggest can be done to resolve these issues.
Aim For A solution:
Keep a positive outcome in mind and work towards the solution in a constructive way!
Business Dispute Resolution;
Generally business disputes are settled in a court of law through mediation or in a private setting outside of the court. However, many people think that the only way to settle business disputes is in court. That is not true. There are other cost effective ways that can be used to come to a middleground that works out for both the parties. Let’s have an overview of different resolution methods.
Negotiation is when the two parties involved in a dispute come to terms with their concerns and decide to settle on a few clauses that work out for both of them. During negotiation, one must be tough and not get carried away by their emotions.
These emotions can be used to make you or break you in a situation like this. You must stand firm in your decisions and take a call only pertaining to the advantages or disadvantages this step might make you go through.
Litigation is the most common way to resolve business disputes. In many cases, litigation is also the most fruitful option to go for. Subjecting the dispute in court might be ideal if:
- Both parties live in the same country, speak the same tongue, and are from similar cultural backgrounds;
- It’s established that the cost of claim should not be too high;
- The need to take this case to the court outweighs the need to reach a fast and quick decision;
- Mutual claims wont be high since the business relationship is small to medium;
- It’s a common economical relationship.
Arbitration is when a dispute is formally submitted by the consent of both the parties to one or more arbitrators who investigate and make a decision. This works perfectly since both the parties give their consent. Not all disputes are subjected to arbitration and the rules can differ from country to country.
- Both parties belong to the same country, speak the same language, and are from similar cultural backgrounds;
- Parties want to keep the information about the dispute confidential;
- Parties wish to receive a fast and quick decision;
- The dispute settlement body has a good understanding of the economical relationships in the bigger picture.
A ‘mediator’ is someone who is bought in. Unbiased and fair, this person listens to the concerns of both the parties and provides solutions in terms of advice that is feasible to both the parties. Meditation is more of a confrontation of one’s issues to the other and may get heated sometimes. It’s important to maintain your calm and try to resolve the matter at hand. If this fails, the case then proceeds to court for arbitration.
Mediation is mostly recommended when the subject to seek court for resolutions is not ideal.
Mediation is important when:
- It’s important for the two people or parties involved to maintain a healthy relationship in the future;
- Both parties wish to stay in control of the outcome and are ready to work towards it.
If you ever find yourself in any of the situations discussed above, simply look up ‘business lawyers near me’ in order to get in touch with professional help. There are many business lawyers in Melbourne to deal with business disputes. They can help you figure out the right way in an affordable manner and eventually reach the end of a dispute!