Business Disputes

Business disputes are an inevitable part of running a business, and every business owner will eventually experience a dispute or conflict of some sort involving their operations. While these types of issues can seem overwhelming, irritating, and financially draining, there are ways to minimize the difficulties of business disputes and to work to ensure effective and peaceful resolution of misunderstandings and disagreements.

Common Areas of Dispute

While business conflicts can arise from virtually any type of arrangement or element of your entity, certain areas of conflict are more common than others, and it is important for owners to be aware of these potential avenues for disputes so that they can do their best to prevent them. Any business working with suppliers, contractors, purchasers, or other business partners runs the risk of disputes arising from contract disagreements. This may occur because one party does not receive the products to which it believes it is entitled, or another feels that it was not paid the proper price for its services. Parties may find themselves disagreeing on the specifics of the contract arrangement, or how long it was intended to last. In all of these situations, breach of contract claims, or similar arguments, may arise.

Another common area of dispute is with customers or consumers who may be unhappy with an experience or service they were provided, or who may feel that the product they purchased was not up to the standard they expected. Businesses provide certain implied warranties on products when they are provided to consumers, and when these warranties are breached, and harm is caused, claims can arise.

Finally, employment claims frequently arise in the business context, especially related to hiring and firing. This is a particularly complicated area for many small business owners because important federal laws govern the treatment of employees and require businesses to take great care to avoid discrimination, harassment, or other improper working conditions that adversely affect certain employees. Many small business owners find that it is helpful to keep a qualified employment attorney in the loop to assist with these types of issues.

Preventing and Resolving Disputes

There are several important steps that small businesses can take to help limit the instances of business disputes that they experience. First, and most importantly, business owners should institute policies and procedures meant to govern day-to-day interactions and transactions, in order to reduce the possibility of disputes. For instance, standard contract forms and sales agreements can help to ensure that contracts follow proper requirements and include all necessary clauses for enforceability. Likewise, carefully developed and streamlined policies for hiring and firing employees can help to avoid or refute claims of unfairness or discrimination in those processes. Obtaining necessary waivers from customers and clients, or ensuring that your products clearly demonstrate all necessary warnings and information, can help to limit your liability and ensure that customers are fully informed of the products they may be purchasing.

In all of these situations, it is also very important to put everything in writing. While friendly agreements and arrangements with neighbors can seem reliable in the beginning, undocumented business arrangements frequently lead to dispute and hassle down the road when both parties disagree on exactly what they originally agreed to.

If, despite these best efforts, business owners find themselves anticipating a dispute, and possible litigation, there are several routes available for those who wish to avoid the expense of the courtroom. Small businesses may seek to rely on small claims court procedures for resolving outstanding bills, debts, or employment issues when damages are limited. Additionally, there is an emerging focus on the use of collaborative practices to avoid the courtroom altogether. Parties involved in this approach can retain the use of lawyers who specialize in a collaborative focus and will work with the parties to encourage negotiation and settlement, rather than adversarial litigation. Collaborative practice often works well in disputes arising between parties who have had a long and productive business relationship.