what is a business dispute

A business dispute is just what it sounds like: a dispute involving a business. The most common business disputes often involve a breach of contract and are between a business and:

  • Clients or customers 
  • Vendors or suppliers
  • Employees
  • Business partners
  • An insurance company

A business dispute can be minor with the parties able to work together to resolve the issue through negotiation or some form of alternate dispute resolution process. Other times, the disputes are more serious and require court intervention for resolution. In this scenario it’s best to have a business dispute attorney guide you through the proper legal action to take. 

Unfortunately, business disputes often affect the running of the business which suffers losses as the litigation gets drawn out all the while the business is at risk of losing money since the business owners and managers are involved in the litigation. In addition to the stress of litigation which affects their ability to concentrate on the business, they have to spend time helping their attorneys prepare for litigation.

Many contracts have terms about how any disputes will be resolved such as through mediation or arbitration. If so, that contract term must be followed. If not specified in the contract, there are still contract dispute resolutions that may be less costly to the business than litigation. You may want to find a solution that allows the business to resume its daily routines fairly quickly.

Ways to Resolve Business Disputes: Negotiation

Whether the parties can informally settle their legal matters generally depends on how severe the dispute is, how seriously the businesses are affected by the dispute, and the willingness of the parties to meet and discuss their problem.

Negotiation is the most efficient and economical way of solving a dispute, but precautions need to be taken seriously. A new contract will likely be necessary, and it must thoroughly cover every aspect of each party’s understanding of their rights and obligations. Business dispute attorneys should be consulted before any final resolution is made and to draft the new settlement agreement.

Ways to Resolve Business Disputes: Mediation

Mediation involves the parties to the dispute meeting with a neutral third party who speaks to and listens to each party. After listening to both sides of the dispute, the mediator works with the parties to guide them to a resolution. They can meet with the mediator with or without the presence of their business dispute attorneys.

If they meet without their attorneys being present, it is advisable that they have their attorneys available for consultation during the mediation session. Although the mediator may educate the parties about what the law is, and explain the legal consequences of making certain decisions, the mediator does not offer legal advice to either party.

Two major advantages to the mediation process are that it is both private and confidential. There is no airing of “dirty laundry” in the open courtroom. If the parties are unable to reach a resolution agreement, the mediator may not be called as a witness if the case goes to trial.

Ways to Resolve Business Disputes: Arbitration

Arbitration is often specified in contracts as the way disputes will be resolved. Arbitration is like a miniature trial. The parties agree upon who will be the neutral arbitrator. The arbitrator acts like a judge and allows all parties to present evidence including testimony from witnesses or affidavits and demonstrative evidence to support their side.

The neutral arbitrator then decides in favor of one of the parties. Generally, the parties agree to binding arbitration which means they must abide by the decision of the arbitrator. If they have agreed to nonbinding arbitration, the losing party may appeal to the court and ask for a review of the arbitrator’s decision.

Ways to Resolve Business Disputes: Litigation

If the parties are unable to informally resolve your dispute, or mediation or arbitration are not tried or are not successful, the next step is to proceed to traditional litigation. This means the parties will go through the discovery process where they exchange documents.

The attorneys prepare for trial which often means deposing witnesses, choosing which witnesses to present at trial, selecting a jury, presenting witnesses, cross-examining witnesses presented by the opposition, settling on jury instructions with the opposing party and the judge, and preparing a closing argument.

The jury will decide in favor of one party based on the preponderance of the evidence. The losing party generally has a right to appeal the decision to a higher court.

To Resolve Your Business Dispute, You Need the Assistance of a Commercial Litigator

Business litigation is complex. The very future of your business may be at stake. Reduce the risk by working with an experienced business dispute litigator like the ones you will find at The Ferraro Law Firm. We use all our resources to ensure you have the most robust representation possible. Contact us or call 888-554-2030 to schedule a free consultation. We will evaluate your case and determine if and how we can help.