How to Handle Business Disputes
Business disputes can arise from a wide variety of factors, from personal and personality conflicts to financial issues. Some can even lead to lawsuits for breach of contract. While this is not always the case, it does occur from time to time. For example, a small business may refuse to pay a contractor for work that was completed late or of poor quality. In these cases, the parties often wind up telling their story to a judge.
A business dispute can also arise from unfair competition or deceptive trade practices. Other common types of business disputes include insurance coverage disputes between business and individual policyholders. Claims for breach of contract can also arise from the refusal of a business to purchase real estate. Likewise, defrauded investors may file claims in state and federal courts. In addition, business disputes can result from construction fraud, which involves the development of a new product or service.
In the event of a business dispute, it is critical that the business hire an attorney as early as possible. These attorneys are well-versed in business litigation and are experienced in addressing complex issues. They are knowledgeable in contract disputes, shareholder disputes, and fraud allegations. Depending on the case, they may be able to mitigate the company’s liability and ensure its continuation.
Business disputes can be a serious distraction for business owners, consuming valuable resources and time. Mediation can provide a fast resolution while avoiding expensive, protracted litigation. Mediation can often resolve business conflicts within a matter of days or hours, while litigation can take years. Mediation also costs a fraction of what it would cost to litigate the matter in court. Litigation can involve costly attorney fees, expert witnesses, and the potential for an appeal.
Even though a business owner can reduce the risk of disputes, they may face a business dispute due to a breach of contract or a failure to follow proper governance procedures. If the dispute is serious, a business may be forced to dissolve. If this happens, legal steps will have to be taken to ensure proper governance procedures are followed and applicable laws are followed. Furthermore, if a business hires a professional who breaks a professional standard, they may be liable for breach of duty of care.
Arbitration is another option for resolving disputes. Unlike litigation, arbitration involves a third-party arbitrator, who acts as a private judge. Often, the arbitrator is an expert in the area of the dispute, which helps him or her understand the complexities of the case. In addition, arbitration is also lower cost, has a faster time frame, and almost always results in a final decision.
Some businesses also use contracts to resolve disputes. These documents often cover various aspects of business, such as vendor and supplier relationships, employment relationships, mergers and acquisitions, shareholder agreements, and franchise agreements. When a business engages in a transaction with another, the parties enter into a contract that is legally binding. In such cases, a business attorney may be necessary to help resolve the matter.