Quality Should Be Your First Consideration

3 ways to address business and contract issues out of court

Business disputes are common because people often have expectations or ideals that other people fail to meet. In some cases, business disputes are clear violations of a contract. Addressing these disputes proactively can help protect your business from further financial losses and prevent other people from attempting to take advantage of your company or you as an individual in the future.

Whether you have to deal with a supplier who did not fulfill their contractual obligation to deliver certain items to your company by a certain date (thus slowing production at your facility and increasing the cost to your business), or a former staff member who violates a non-compete agreement, violations of a written contract can have a provable and direct negative effect on your business.

You want to take these issues seriously and resolve them as soon as possible. However, going to court is not the only way to resolve a business dispute. There are three other ways in which you may be able to address a serious issue or breach of contract.

Sometimes, an official notice of the issue will resolve it

Confusion is often at the root of many business disputes. One person may not realize what obligations they have to someone else. For example, if the content of your business contracts is highly individualized for your business, the other party may not understand the contract in full and may not even read it before signing it. That could mean that they disappoint your expectations without intending to do so.

Once you know for certain that an action or inaction leaves another party in violation of a business contract, sending them formal communication advising them of the issue can sometimes be all that you need to do in order to resolve the issue. Having a business attorney draft a letter referencing the contract and the failure of the other party to uphold their part of the deal could prompt them to quickly resolve the issue to avoid legal consequences.

Mediation can help you work together to resolve the issue

If you are in a dispute with someone with whom you will likely need to maintain a professional relationship moving forward, you certainly don’t want to use scorched-earth tactics in addressing disputes. Mediation could be a great way to compromise and find a solution that works for both of you.

A neutral third-party mediator will help guide you toward compromise, while your individual attorneys will make sure that neither of you agrees to anything that would diminish your rights or leave you exceptionally vulnerable.

Mediation can help you address previous miscommunications and clarify expectations, therefore helping to solidify your relationship. Unfortunately, mediation doesn’t work unless both parties are willing to meet somewhere in the middle.

Arbitration can also help keep you out of court

In certain situations, either because you are both too emotional about the dispute or because you can’t find a way to compromise on your own, mediation may not be the right solution. In fact, some contracts will specifically and explicitly require arbitration as the way to handle disputes.

Like mediation, arbitration involves working with a neutral third party. However, instead of having the authority to set your own compromise and solution, arbitration places that authority with the neutral third-party. Arbitration can be a great and fair way to resolve a conflict in certain circumstances when you can’t think of a solution on your own.

Many people will find that one of these three options can lead to the quick and successful resolution of business disputes. Knowing all of your options will help you make more informed decisions about how to resolve mounting tensions.

FindLaw Network
Distinguished TM AV | LexisNexis* Martindale-Hubbell* | Peer Review Rated | For Ethical standards And Legal Ability
Texas Lawyer | Litigator of the Week
Texas Bar Foundation | Sustaining Life Fellow