Even the best laid plans sometimes don't work out, but as Benjamin Franklin once said, "If you fail to plan, you plan to fail."
Businesses are involved in numerous interactions that can lead to any number of disputes - within the business, between businesses, and between businesses and clients. You can proactively work to minimize and avoid many common disputes, but even the most thorough planning is not always enough to evade disputes altogether. When a business dispute arises and is not adequately addressed, it can seriously impact a business' reputation, bottom line, and even survivability. You want to address the harm done to your business as soon as possible so you can prevent further damages and recover monetary losses or other relief. You also want to defend against claims that could result in monetary judgments against the business and result in other costly penalties.
While we can't promise you will never be in a dispute, we can be there to help guide you through the process and protect your interests and assets. Contact us today to learn more about effectively preventing business disputes and adequately addressing any that may arise.
Common Types of Business Disputes
Business disputes can involve anything from breach of contract to disputes arising from mergers or infringement of trade secrets. Below are some of the more common types of disputes that most businesses encounter at some point.
Breach of Contract
A breach of contract is a business dispute that arises when a contracting party fails to do something under a contract or breaches the terms of the contract. Contracts are a common feature of any business operation and, as such, breaches of contract are also common. They can involve consulting contracts, contracts for goods and services, and partnership agreements.
Partnership disputes often arise where partners disagree on what's best for the business or how to proceed in relation to a specific issue, like splitting profits. They can also involve a breach of fiduciary duty where one party acts against the interests of the other in breach of a partnership agreement.
Intellectual property law protects creators' rights in their original work. Business disputes can arise over who owns the intellectual property in a particular work or alleged copyright, patent, or trademark infringements.
Employment law disputes involve both internal conflicts such as harassment, discrimination, and wage disputes as well as conflicts with former employees, such as unfair dismissal or breaches of non-compete agreements.
How Are Business Disputes Prevented?
There are several ways to help minimize the risk of becoming involved in a business dispute.
Draft Effective Contracts
One of the best ways to head off any future disputes is to ensure you have effective, legally-binding contracts in place. A n experienced business attorney can draft carefully written, clear, and specific contracts for your business.
Seek Advice Early
If you are unsure about how to approach a complex issue or if you have a gut feeling that something is not right, seek advice from an experienced business attorney straight away. Obtaining legal advice at an early stage on how best to proceed helps you to avoid a business dispute.
It is best practice for a business to keep a written record of important documents or events in case a dispute later arises. This includes retaining copies of all emails, contracts, accounting information, loan documents, file notes, and meeting minutes. A experienced business attorney - especially one with business litigation experience - can assist you with developing a good document retention strategy and system.
How Are Business Disputes Resolved?
Before going to court, the parties may attempt to resolve an issue via alternative dispute resolution (e.g., negotiation, mediation, or arbitration). This can save the parties significant amounts of time and money.
During a negotiation, the parties discuss the matter to try and resolve it amicably. While negotiation is a more informal process, business attorneys will often be involved because they have skills that allow them to effectively navigate the process. Sometimes the business attorneys negotiate on behalf of their client, and sometimes the client conducts the negotiations while the business attorney advises them in the background.
Negotiation is the most cost-effective way to resolve a dispute; it avoids more formal processes that require the involvement of external parties.
In a mediation, the parties discuss the matter with an independent mediator to try and find a mutually agreeable solution to the issue. The process results in a mediation agreement, which the parties must follow.
During arbitration, an arbitrator (or panel of arbitrators) hears each party's case and decides the matter.
The contract often determines if arbitration is available to the parties in their specific situation. If there is an arbitration clause, the parties may be barred from going to court.
As a last resort, if parties are unable to otherwise resolve their dispute, they may proceed to formal litigation in court. This involves one party filing a civil complaint against the other and the matter is eventually heard before a judge and jury who then give their verdict.
Litigation can be drawn out, costing the parties significant amounts of time and money. The parties are typically represented by their respective business dispute attorneys.
Contact Us Today
Litigation is not the only method of resolving a business dispute, and besides, as mentioned above, it is the most time-consuming and costly method. Many parties to a business dispute are able to negotiate and compromise via a settlement process. Sometimes, it may go to arbitration. At R&R Legal Advisors, our attorneys have both business and business litigation experience and represent clients who want smart, resourceful solutions to business disputes. If you need help, contact us today either by filling out the online form or calling us at 973-662-4550 to schedule a consultation.