subject: Resolving Business Disputes [print this page] Solving business disputes between the business owner and their partners, vendors or customers require different tactics.
Kinds of business disputes
Breach of contract
Buyer and seller contracts and failure to pay
Collection of outstanding debts and collateral foreclosure
There are four options to choose from in order to resolve or settle business disputes.
Direct negotiation
This is the least costly and easiest way to resolve a conflict. The important basics here to know are what one wants, why, and how much one cares for the future relationship with the other person. Then find out how the situation is from another persons views or perspective. Questions, listening and observations come into place. During the negotiation, draft an agreement that will be a win-win situation for both parties. It involves planning, communicating and negotiating.
Mediation
Both parties usually disagree with a neutral third party who mediates between the two other parties involved. The mediation discussions and materials arent admissible in court.
Benefits of Mediation:
The process solves many disputes but doesnt take a long time compared to litigation. It is less taxing and is not publicized unlike litigation.
Usually, most mediation sessions takes one or two days long.
Mediation is definitely cheaper than litigation.
Mediation allows the parties to deal directly with each other, rather than relying on attorneys.
Drawbacks of Mediation:
Since the mediation is not binding, the parties should be committed their agreement. It can be frustrating and sometimes waste of time if the dispute is not resolved in the end.
Mediators should be good enough to avoid defective resolution and of course, waste of time and money.
Arbitration
A neutral arbitrator comes into the picture in the event of a conflict to examine the evidence, listen to both parties and provide a binding decision.
Arbitration is past-oriented, and requires a certain amount of fact-finding.
It requires more time and money compared to mediation. According to the American Arbitration Association, there are about 85 [percent] of mediations [resulting] in a settlement. If the parties cannot agree through mediation, they can proceed to arbitration.
Litigation
The judge decides which party is right or wrong. He bases his decision or judgment on facts and the law.
But this has two drawbacks for the owner of the business. It may have a huge impact on the future relationship of the parties involved and it is more expensive and time consuming. This happens usually when the other three are not applicable to the business dispute.
