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What Are Business Disputes?

Business disputes are an inevitable and unavoidable cost of running a business. Typically a business dispute arises between businesses when they disagree over the terms of a contract that binds both parties, but a business dispute can occur in any number of ways.

What Are Common Business Disputes?

Business disputes can arise from any type of arrangement, but there are certain types of conflict that are more common than others.

Businesses that employ or work with contractors, purchasers, suppliers, or business partners often have contract disputes. Perhaps one party does not believe she was paid the contract price, one party was not delivered the goods or service she was promised, or delivery was outside of the agreed upon timeframe. Whatever the case, contract disagreements make up many business disputes.

Businesses that deliver goods or services to customers can have disputes with their customers regarding whether the goods or services were delivered or up to the standard expected. Businesses typically provide implied warranties that products are functional and operational. When the products are not, or if the products actually harm the consumer, claims against the business are often filed.

Employment claims are often filed relating to businesses, especially relating to their hiring and firing practices. Businesses cannot discriminate or harass its employees, and those that do expose themselves to business claims.

How Can I Prevent a Business Dispute?

While a business can’t insulate itself from all liability, it can limit the possibility of business disputes. Businesses that institute policies and procedures that govern their day-to-day interactions with employees and transactions with other businesses reduce the possibility of disputes. For example, a business that uses standard, industry approved forms with boilerplate language for all their business dealings are less likely to lead to disputes regarding their contract dealings.

Businesses should have employment policies for hiring and firing employees. A skilled employment attorney should help the business draft these policies so they are consistent with current employment laws.

For businesses that have customers, obtaining waivers or making sure all products clearly and visibly have applicable product warnings can help avoid liability.

How Can I Resolve Business Disputes?

If your business is unable to prevent claims, you may want to rely on small claims court for resolving outstanding bills, debts, or employment issues when damages fall within the small claims’ limits.

There are often Alternative Dispute Resolution (“ADR”) clauses in business contracts which require any disputes relating to the contract be resolved through binding arbitration or seek mediation before filing suit.

Arbitration is a process for resolving a dispute between two parties outside of the court system but is similar to a trial in that both parties argue their case to the “arbitrator.” The arbitrator listens to the disputing parties’ problems and arguments then decides on a resolution.

Mediation is a type of negotiation between multiple parties facilitated by a neutral third-party (the mediator). Mediation is unlike arbitration in that the mediator does not make a decision regarding the parties and the resolution; instead, the mediator’s sole responsibility is to try to help the parties come to a resolution on their own.

If the parties cannot resolve their dispute outside of court, one party may have to file suit against the other.

Do I Need an Attorney to Resolve My Business Dispute?

Business disputes can be very complicated, time-consuming and difficult to resolve. A business attorney can help you resolve your business dispute, whether through binding arbitration, mediation, or litigation, and can help resolve your case favorably.

Photo of page author Erin Chan Adams

, LegalMatch Legal Writer

Last Modified: 06-30-2017 09:22 AM PDT

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