How to Avoid a Commercial Dispute

A commercial dispute can majorly impact a business's operations, employee morale, and ability to provide great products and services. Not only is a commercial dispute and subsequent litigation a time-consuming process, it's also exceedingly costly and stressful for all business owners. However, it's good to know that litigation or legal proceedings aren't the only avenue out of a commercial dispute. In many cases, businesses don't want to take an issue to court and would rather settle the issue on their own, with a business and not their lawyer. That said, if you're a business, it's imperative to have a framework in place that reduces your risk of a commercial dispute. Here are a few ways to avoid a commercial dispute.

Get Everything in Writing

One of the most obvious places to start is ensuring that all agreements are in writing. Of course, agreements can be made verbally, but for legal reasons it's best to have everything in writing. Either have a lawyer draft up agreements on your behalf which you will sign, along with the other party. With these documents, you'll be provided a layer of protection should anything go wrong in the future.

Understand Industry-specific Risks

Secondly, it's important to be realistic in understanding issues that cause dispute in your industry. If there's a process, type of partnership or agreement that often ends in a major dispute or legal battle, then forgo getting into this type of agreement. To add, if you're set on a partnership or an agreement that often ends in a dispute—work to get your documentation in line to ensure these risks are minimized. Cover all outcomes and requirements in writing and have all parties sign and agree, and you'll be ensuring a reduced risk of a dispute or litigation.

Get Professional Advice

If you're unable to determine the level of risk on your own, reach out to dispute resolution lawyers to do the work for you. They'll be your right-hand man in determining risk, drafting documents and making sure you're as protected as possible given there's an issue in the future. Reaching out to business lawyers such as LegalVision will put you in the right place from the outset so you're able to continue business without the worry of an impending lawsuit. It's also good to note that initial legal fees for advice and documentation preparation will be far cheaper than litigation, so it's an investment you can't afford not to make.

Reach Out to the Other Party

In a lot of cases, disputes can be settled exceedingly easily by offering up the time to talk through a problem. It's no secret that good communication solves a myriad of problems in business, and this holds true for commercial disputes. If you're having a problem with a business partner, supplier or even B2B partners, a short, direct phone call might solve a number of your issues. Our biggest tip here is to offer avenues or 'wiggle' room for a dispute to resolve itself. In a dispute, being too firm or unwilling to make a sacrifice won't get the ball rolling, so go into your call with an open mind and be ready to make a new deal.

Making a Compromise

As mentioned above, it's imperative to be ready to compromise. If you and the other party have an issue, there needs to be a level of give and take to get the problem under control. Sometimes a compromise may seem a lot bigger than it is, especially in the moment, though you must ask yourself a few questions. Will this compromise:

Solve the dispute
Affect your bottom line in the long term
Reduce the risk of litigation
Improve relations with the party

A lot of the time, a small compromise will hit your finances in the short term, though it will be far less than the cost of going to court. It's not uncommon for businesses to go bankrupt while fighting a legal battle, and this is something a small compromise can prevent.

Training the Team in Understanding Liability

Finally, it's essential that your staff know their role in the business and understand that their actions reflect that of the business. Whether your workforce knows it or not, you are liable for their actions as an employer, and this can cause problems. Train your staff in understanding how to mitigate risk and perform operations in a way that reduces the chances of backlash from customers or business partners. With well-trained staff, you will be reducing the chances of a commercial dispute at the employee level.